Though the U.S. housing market is showing signs of life, there are still an estimated 11 million houses in the U.S. where the homeowner owes more than the house is currently worth. These underwater mortgages represent around one in four of every residential loan made domestically. It could be a number of years before homeowners see the value of their homes again exceed the loan balances.

SEE: Mortgage Options For Underwater Homeowners

Many homeowners continue to pay their monthly mortgage invoices. Over the 30-year period that many of these loans run for, most will likely see home values rise above the initial purchase price. Refinancing is also becoming increasingly easier thanks to record-low interest rates and government programs that make it easier to refinance loans. Reducing the rate or paying off a loan early can literally save hundreds of thousands of dollars on house payments over the duration of a traditional 30-year fixed rate mortgage.

Can't Make Payments
Unfortunately, there are just as many individuals who are unable to make ends meet and pay their monthly loan balance. There are a number of reasons people are unable to pay their mortgages. Unemployment rates continue to hover above 8%, which is double the levels of a decade ago. Without a job and income, paying off debt and simply making ends meet has become difficult for many. Other people were simply investors and never intended to make a long-term commitment to the homes they purchased. Instead, they had anticipated that rapid home value appreciation would let them cash out with substantial equity, even if they couldn't afford the loan balance.

For these parties, the best places to have taken out a mortgage are states that allow for non-recourse loans. These loans mean the lender can only pursue the collateral that was put up at the time the loan was taken out. Collateral will include the actual home, the value of which has deflated substantially, plus any initial equity that was put up in the form of a down payment.

Recourse Loans
This contrasts with recourse loans where a lender can also pursue an individual's overall assets, or assets that were not put down as collateral when the original loan was taken out. For homeowners that have lost their jobs and have few outside assets, the difference between both loan types is of little consequence. For investors that may have had a significant amount of other assets, states that support recourse loans are likely to make it very difficult to walk away from an underwater mortgage.

There are an estimated 12 states that offer non-recourse loans. These include Alaska, Arizona, California, Connecticut, Florida, Idaho, Minnesota, North Carolina, North Dakota, Texas, Utah and Washington. It may come as little surprise that the worst-hit states like Arizona, Nevada, Florida and California are on the non-recourse list. There may be other factors at play, including how available subprime loans were at the time of the housing bubble, but the fact could be that speculators understood they had little liability outside any initial collateral put down as part of the mortgage loan.

The Bottom Line
On the flip side, some of the worst hit states have among the most affordable home values these days. Many pockets of the market, including parts of California and Florida, have also largely recovered. For those that can't make ends meet, walking away from a mortgage may be one of the only viable methods to get back on their feet. For the speculators that gambled on future house price appreciation, those in non-recourse states may have lucked out.

SEE: Top 6 Mortgage Mistakes

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