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Foreclosures thin ranks of underwater borrowers

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The homeownership rate could fall below 60 percent if homeowners who are deeply underwater end up losing their homes, a new report from mortgage data aggregator CoreLogic suggests.Some 10.78 million homeowners were "underwater" during the third quarter, meaning they owed more on their mortgages than their homes were worth. About 22.5 percent of all homeowners with mortgages had negative equity.That's a slight decline from the 10.97 million homeowners who CoreLogic estimates were underwater in the second quarter, but the improvement was driven primarily by foreclosures rather than rising home values. So far this year, the ranks of underwater homeowners have thinned by about 500,000, CoreLogic said. But price declines in some markets could bring to an end or even reverse recent improvements in negative equity.Many underwater homeowners will eventually lose their homes, and in the meantime may behave more like renters, failing to maintain their properties because they have no s...