More than 20% in region owe more than homes are worth - Washington Business Journal:

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Northern Virginia and Prince George’s, Calverr and Charles counties owed more on their house or condo than the property than the estimated valuer at the endof 2008, according to a reporr released Wednesday by . The proportion of borrowerx who were underwater was slightly worse that segmenty of the Washington area than the nation asa whole. The nationwidw average is skewed by the extreme bubbled and bustsin Nevada, California, Florida and and the economic depression in Leaving out those states, the averagre negative equity percentage in the rest of the country was just undetr 14 percent.
Borrowers in the District have more equityh than the rest of the with 15 percent owingh more than the property is Borrowers in Montgomery and Frederickcounties — who are counted separatelt by the company — are in much bettert shape, with just 10 percent in negative equity territory. However, Mark Fleming, First Americanb CoreLogic’s chief economist, predicted that areaxs with lower percentages are likely to see increaseein 2009, while places like Prince William County, whichn have already had massive price are unlikely to have significanty losses in value.
Two trends contributecd to the high numbersof upside-dowhn borrowers — rapidly dropping prices and the fact that many buyerzs did cash-out refinances or put little to no money down when they boughrt their houses. First American CoreLogic estimatezsthe loan-to-value figures with an automated valuation modelk which stops at $1.25 When many homeowners owe more on their housex than they can sell them for, they are less likelh to trade up to a bigger or to downsize. Most will not let the property go to but if they have problemsd payingthe mortgage, someone with negative equity is much more likel to go to foreclosure.
If you had enough equityt to covertransaction costs, you could sell the hous if you lost your job, or take out a home equith loan to get through the months with lost “Mortgage [default] risk will continue to increasd until home prices and the economy begin to Fleming said in a statement.