More than 11.3 million homeowners - nearly one fourth of all Americans with a mortgage - owe more on their loan than their home is now worth.

The number increased by about 620,000 from the third quarter.

Once a mortgage is under water, owners cannot easily sell their homes or refinance their loan.

These underwater mortgages are concentrated in California, Florida, Nevada, Arizona, Michigan and Georgia.

In Nevada, 70 per cent of mortgages were underwater.

In Washington State, nearly a quarter million homeowners are upside down on their mortgages - approximately 15.9% of homes.

The rise in negative equity is closely tied to increases in foreclosure activity.

Once a homeowner owes 25 per cent more than the house is worth, foreclosure rates rise sharply.