Of the 1.5 million residential mortgages in the Bay State, 16.1 percent owe more than their house is worth, according to a fourth-quarter 2011 report from California-based CoreLogic.

The report shows a worsening from the fourth quarter of 2010, when 15.3 percent of Bay State homeowners were paying mortgages on underwater homes.

The latest report shows another 3.6 percent of Massachusetts homes with mortgages were nearing negative equity status during the fourth quarter. Negative equity, often referred to as "underwater," means that borrowers owe more on their mortgages than their homes are worth.

But the commonwealth’s numbers are still better than the nation as a whole, which has 22.8 percent of homeowners paying mortgages on underwater properties. The national number is an improvement over the 23.1 percent reported during the fourth quarter of 2010.

"Due to the seasonal declines in home prices and slowing foreclosure pipeline which is depressing home prices, the negative equity share rose in late 2011, said Mark Fleming, chief economist with CoreLogic. "The negative equity share is back to the same level as Q3 2009, which is when we began reporting negative equity using this methodology.

"The high level of negative equity and the inability to pay is the ‘double trigger’ of default, and the reason we have such a significant foreclosure pipeline," he added. "While the economic recovery will reduce the propensity of the inability to pay trigger, negative equity will take an extended period of time to improve, and if there is a hiccup in the economy recovery, it could mean a rise in foreclosures."

Nevada had the highest negative equity percentage with 61 percent of all of its mortgaged properties underwater, followed by Arizona (48 percent), Florida (44 percent), Michigan (35 percent) and Georgia (33 percent). This is the second consecutive quarter that Georgia was in the top five, surpassing California (30 percent) which previously had been in the top five since tracking began in 2009. The top five states combined have an average negative equity share of 44.3 percent, while the remaining states have a combined average negative equity share of 15.3 percent.