On the heels of yesterdays “Home Affordable Modification” initiative, a study was released by American CoreLogic that states one in five U.S. mortgage borrowers are upside down in their loan. In other words, they owe more than the house is worth.

Since their peak in July 2006, home prices have declined 19.3% on a cumulative basis and are sitting at the lowest price levels since May 2004.  In December 2008, housing prices fell 11.1% nationally compared to December of the previous year. On a year-over-year basis, the total value of residential properties dropped from $21.5 trillion in December 2007 to $19.1 trillion in December 2008.

The CoreLogic study also states that 8.31 million U.S. properties were worth less than the amount owed against the loan.  Those numbers coclude that negative equity had increased from 18% in September 2008 to 20% in December 2008.

In addition, the study also confirmed that California homeowners have seen the sharpest decline in their home values, where values are down 26.9% from a year ago, followed closely by Nevada (-26.5%), Arizona (-21.1%), Florida (-19.5%), and Rhode Island (-19.0%).

Couple this news with the state of the stock market and the dismal unemployment forcast and we can probably expect these negative numbers to increase for the remainder of 2009 moving into 2010.

For more information on California real estate, click here.