According to a report released by First American CoreLogic, a research firm, in December over 8.3 million U.S. mortgages were underwater. Three months prior to that, it had been 18%, before rising to 20%. This shows that one out of five mortgages are underwater. The term underwater is used to describe situations where borrowers owe more on their loan then the value of the home the loan was taken out for. This is due to the crash of the housing market and prior teaser loans given to borrowers. The senior economist for CoreLogic, Sam Khater, commented further on these developments, saying that "As of December, home prices are declining in 75% of all metro markets, up from a third of those markets last March,".

CoreLogic also reported that almost 2.2 million more homeowners are within 5% of negative territory, making them ideal candidates for Obama´s foreclosure prevention plan. The plan would allow borrowers with loan-to-value ratios at 80%-105% (near to slightly underwater) to refinance their loans and have lower regular mortgage payments. Those who are more underwater, could qualify for a loam modification that would reduce their payments to 31% of their gross income.

Overall, California has had the most damage with their homeowners losing $1.2 trillion in home values. It is also highest in the amount of underwater borrowers, this figure totaling at 1.9 million. Behind California are Florida, Texas, Michigan, and Ohio. Together, the five states make up over 50% of the nation´s negative equity mortgages.

While bargain hunters are once again on the buying lookout, Khater does not feel that this is enough of a good sign for the market, "The supply must be whittled down more before prices can begin to stabilize,".