The number of homeowners whose mortgages are in negative equity is estimated to have fallen by 60 per cent in June from the previous quarter. The Hong Kong Monetary Authority said yesterday its survey of loans in which the outstanding amount exceeded the value of the property indicated the number dropped to 3,767 at the end of June, from 9,553 three months earlier. It was the second successive quarterly decline. In December, 10,949 mortgage loans were in negative equity, compared to 105,697 in June 2003 at the height of the Sars epidemic. The most recent survey also indicated that just 0.8 per cent of mortgaged homes were worth less than borrowers paid for them. This was a decline of 1.2 percentage points from the previous quarter, and the lowest level since last September. The total value of residential mortgages in negative equity fell by three-quarters, to HK$8.1 billion, over this period. The Monetary Authority estimated that the unsecured portion of such loans declined to HK$600 million in June, from HK$2.1 billion in March and HK$2.7 billion in December. The loan-to-value ratio edged down to 108 per cent from 111 per cent in the same period. The three-month delinquency ratio for negative-equity loans - loans unpaid for more than three months against the total outstanding - rose to 0.17 per cent from 0.12 per cent at the end of March. The authority explained that the amount overdue had declined but not as quickly as the total in negative equity, pushing the ratio up.