NEW YORK - November 30, 2009 - Nearly a quarter of U.S. mortgage holders owe more on their loans than their houses are worth, according to a report today in the Wall Street Journal.

Data from First American CoreLogic, a Santa Ana, Kalifornia-based real-estate information company, shows that in the third quarter of 2009, almost 10.7 million households had negative equity in their homes.

Despite good news on the house resale front - it was reported Monday that home sales surged for the second month in a row in October, climbing to the highest level in 2½ years - due in part to a first-time buyers' tax credit - the Journal's Ruth Simon and James R. Hagerty write that this swelling of “underwater mortgages” threatens prospects for a sustained housing recovery.