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'Underwater' loans fall 15% on Long Island, CoreLogic shows

The share of Long Islanders who owe more

The share of Long Islanders who owe more than their home’s value has fallen, a new CoreLogic report shows. Credit: iStock

The share of Long Islanders who owe more than their home's value has fallen, a new report shows.
In Nassau and Suffolk counties, 42,539 homeowners -- 7.8 percent of those with outstanding mortgages -- were "underwater" on their loans in the July-through-September period, CoreLogic reported Tuesday.

That's down from the third quarter of 2012, when 49,949 of local homeowners -- or 9.25 percent of those with mortgages -- owed more than their homes were worth.

The emergence of thousands of local homeowners from so-called negative equity comes as home values continue to climb.

"Sellers finally have the opportunity to get out from under," said Bethany Marten, broker and owner of Home Buyers Resource Center in Baldwin.

Marten said she's been seeing fewer short sales -- in which a home is sold for less than the outstanding mortgage, with the bank's approval -- and foreclosure sales, and more market-rate transactions.

"Housing values have stabilized and they're on the rise now, so people are accruing a little more equity in their homes," she said.

The median sale price in Nassau County was $418,000 last month, up 5.8 percent from the previous November, according to a report released this week by the Multiple Listing Service of Long Island. In Suffolk County, the median sale price was $318,500, an increase of 1.8 percent from a year before.

Last year's sales figures reflect the immediate aftermath of superstorm Sandy. The Oct. 29, 2012, storm delayed or canceled many transactions in November 2012.

Long Islanders are less likely than homeowners nationwide to be underwater on their mortgages.

However, the country as a whole is making a stronger recovery from negative equity.

Nationwide, nearly 6.4 million homes, or 13 percent of all homes with mortgages, were still in negative equity at the end of the third quarter of 2013, CoreLogic reported. That's down from nearly 10.6 million homes -- or almost 22 percent of those with mortgages -- a year earlier.

"We should see a further rebound in consumer confidence and economic growth in 2014 as more homeowners escape the negative equity trap," Anand Nallathambi, president and CEO of CoreLogic, said in a statement.

CoreLogic tracks data on more than 85 percent of mortgages in the United States.

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