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45 June 2025 J O U R N A L June 2025 » The need for a permanent partial claim option is urgent. We applaud the passage of this important bill, which gives the VA permanent authority to create a partial claims program that aligns with the loss mitigation options offered to borrowers across other federal housing agencies. We will continue to work with a bipartisan group of senators to get similar legislation passed as soon as possible. Thousands of struggling veteran homeowners risk foreclosure without this swift legislative action and subsequent implementation of a VA partial claim program." From 2021-2022, the VA had a sep- arate hardship assistance program in which delinquent borrowers could put a past-due balance at the end of the loan. This approach, known as the "partial claim," was similar to one offered by the Federal Housing Administration (FHA). A partial claim allows veteran borrowers to bring their loan current and resume their former payments. The borrower repays the deferred amount to VA when the loan pays off at 0% interest. SHARE OF 'EQUITY-RICH' HOMES SLIPS AS UNDERWATER RATES RISE A ccording to the Q1 2025 U.S. Home Equity & Underwater Report published by ATTOM, roughly 46.2% of the nation's mortgaged residential properties were deemed equity-rich in Q1, which means that the total estimated loan balances secured by those properties did not exceed half of their estimated market value. "Home equity rates are near their highest points in recent years and the dip we've seen early this year in the propor- tion of equity-rich homes shouldn't cause too much concern," said Rob Barber, CEO of ATTOM. "In each of the two previous years, the first quarter marked the lowest point of the year before the proportion of equity-rich homes shot back up in the second quarter." After peaking at 49.2% in Q2 of last year, the percentage of equity-rich homes has decreased every quarter since falling from 47.7% in Q4 2024. Still, the rate is about double what it was in Q1 2020 and remains historically high. In Q1 2025, the percentage of homes that are seriously underwater—that is, whose total estimated balance of loans secured by the property is at least 25% greater than its estimated market val- ue—rose from 2.5% in Q4 2024 to 2.8%. Increasing & Decreasing Trends in Equity-Rich Homes — U.S. Most of the nation saw a decline in the percentage of homes with high eq- uity. Between the fourth quarter of 2024 and the first quarter of 2025, the rate decreased in 47 states and the District of Columbia. As a reminder that this decline occurs amid a historically robust housing market, it was still higher in 33 states and Washington, D.C., than it was at the same time last year. The states with the largest annual increase in the proportion of equity-rich homes were: 1. Connecticut (up from 42.2% in Q1 2024 to 48% in Q1 2025) 2. New York (up from 49.1% to 54.1%) 3. New Jersey (up from 47.1% to 52.1%) 4. Rhode Island (up from 55% to 59.8%) 5. Kentucky (up from 28.7% to 33.3%) Approximately 47 states had a quarterly decline in equity-rich rates, but most states saw annual increases. The biggest annual decreases in equity-rich homes were in: 1. Florida (down from 54.4% in Q1 2024 to 49.3% in Q1 2025) 2. Utah (down from 54% to 50.7%) 3. Arizona (down from 52.9% to 49.8%) 4. Washington (down from 54.2% to 51.3%) 5. Colorado (down from 48.4% to 45.8% Underwater Mortgages Pose Challenges for U.S. Homeowners Since early 2023, the percentage of mortgaged homes deemed substantially "Home equity rates are near their highest points in recent years and the dip we've seen early this year in the proportion of equity- rich homes shouldn't cause too much concern." —Rob Barber, CEO of ATTOM