Real estate website Zillow reported recently that the number of homeowners underwater has improved slightly in the first quarter of 2012. In the first quarter of last year, 32.4% of borrowers owed more on their mortgages than their homes were worth. The number has slightly improved this year at 31.4%, but it's still more than it was three months earlier. It's likely that underwater homeowner percentages remain high because of foreclosure processing delays. And, as the LA Times noted last week, the high percentage of underwater borrows is bad for the overall market:"Negative equity has created a drag on mobility and home-price appreciation as people have gotten stuck in their homes."

On the bright side, 9 out of 10 borrowers are paying their mortgages on time.

In areas like Los Feliz, Echo Park and Eagle Rock, Zillow data shows 13%, 18%, and 19% respectively at the first quarter of 2012. Other areas in Northeast Los Angeles like Highland Park and Elysian Valley show pretty high percentages of underwater borrowers, with the latter at 33%.

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