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40 REPORT: FALLING NEGATIVE EQUITY RATE NEARING SINGLE DIGITS e third quarter of 2014 saw more than a quarter of a million American homes return to positive equity, leaving about one in 10 still un- derwater, CoreLogic said in its Q 3 2014 Equity Report released ursday. According to the company's latest estimates, an additional 273,000 United States homes recov- ered to a positive equity position in Q 3, bringing the total number of mortgaged homes with equity to approximately 44.6 million—about 90 percent of all mortgaged properties in the nation. As home values rise and borrowers continue to gain equity, CoreLogic's analysis indicates that nearly 5.1 million properties are still upside down on their mortgage. at figure represents about 10.3 percent of all residential properties with a mortgage compared to about 13.3 percent the year prior. "Negative equity continued to decrease in the third quarter as did the level of homes mired in the foreclosure process. is should hopefully translate into less friction in the housing market as we move forward," said Anand Nallath- ambi, CoreLogic president and CEO. "Better fundamentals supporting homeownership in the face of higher rents should attract more first-time homebuyers to the market this year and next." With home prices expected to appreciate about 5 percent in the next year, CoreLogic econ- omist Sam Khater predicts the national negative equity rate should fall another 2 percentage points to roughly 8 percent—"still above average, but approaching the pre-crisis level." e bulk of home equity recovered in the last few years has been at the high end of the housing market, CoreLogic said. e company's report shows 94 percent of homes valued at more than $200,000 are in positive equity, while 85 percent of homes below that threshold are in the same position. Declines in negative equity in the third quar- ter were concentrated in a handful of states, with Nevada, Georgia, Michigan, and Florida seeing some of the biggest improvements. However, those states are still experiencing higher than average levels of underwater mortgages. e problem is worst in Nevada and Florida, which both topped the list of states with the highest negative equity rates (at 25.4 percent and 23.8 percent, respectively). Furthermore, out of the nearly 45 mil- lion mortgage properties that are above water, CoreLogic estimates that 9.4 million (19 percent) have less than 20 percent equity, while 1.3 million (close to 3 percent) have less than 5 percent equity. ese under-equitied and near-negative equitied properties still present a challenge to the housing market, as those borrowers are likely to have a difficult time refinancing or selling their home. ey're also at risk of slipping back under- water should home prices see a surprise reversal. BANKRUPTCY FILINGS END UP AND DOWN YEAR WITH SLIGHT INCREASE Bankruptcy filings in the United States finished an up and down year with a slight month-over-month increase in December, but were down overall year-to-date, according to AACER bankruptcy data reported by Epiq Systems, Inc. e number of bankruptcy filings na- tionwide crept up from 62,417 in November to 63,090 in December, a 1 percent increase; however, there were four more filing days in December than there were in November (22 compared to 18). e slight increase comes just a month after experiencing a large decline from nearly 79,000 in October. e highest total for any month in 2014 was in March, when 91,280 bankruptcies were filed. For the entire year of 2014, there were 910,090 bankruptcies filed in the United States, which is down from 1.03 million filed for all of 2013 (a decline of 12 percent). at number has been steadily declining since hitting a peak of 1.56 million for 2010, which was at the peak of the foreclosure crisis following the housing market collapse in 2008. Tennessee led all states in bankruptcy filings per capita in 2014, with 6.10 filings for every 1,000 people. e state with the second most was Alabama (5.28 for every 1,000) and third was Georgia (5.24 for every 1,000). e national average for the entire year of 2014 was 2.93 filings for every 1,000. e state with the most total bankruptcy filings for 2014 was California, with 99,689. Still, the Golden State was below the national average in bankruptcy filings per capita at 2.7 for every 1,000, the 27th highest total among states. Epiq Systems is a leading global provider of technology-enabled solutions for elec- tronic discovery, bankruptcy and class action administration. Top legal professionals de- pend on us for deep subject-matter expertise and years of firsthand experience working on many of the largest, most high-profile and complex client engagements. Epiq Systems has locations in the United States, Europe and Asia.

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