According to NPR, at the end of 2009, 30% of US homes were worth less than their mortgage. i.e. they were in 'negative equity'.

This number is expected to rise to about 50% by the summer of 2010, which raises the spectre of a truly huge number of foreclosures----something the banks are already trying to stall so as to not force onto their books masses of realized losses.

This tidal wave of non-performing loans is not only going to hurt bank profitability, it will continue to drive the unprecedented number of bank closings in 2009 to new heights. Some, such as Karl Case of Case Shiller fame, say this could lead to a double dip recession.

Meanwhile many homeowners continue to explore strategic default as an option.