Here's a ranking Atlanta wishes it didn't dominate.  According to a study recently released by CoreLogic, the metro Atlanta area is third in the nation for the percentage of homeowners who are underwater on their mortgages (35%).  This means they owe more on their home than it is now worth.  This can be caused by a decrease in the home's value, and increase in mortgage debt, or a combination of the two.

Keep in mind this ranking is for the metropolitan area, not the city of Atlanta itself.  The two metros ahead of Atlanta are Boise, ID (36%) and Greeley, CO (38%).  The most underwater city in the nation is, unsurprisingly, Las Vegas (66%), followed by Stockton, CA (56%), and and Phoenix, AZ (55%).  The nation as a whole has 10.9 million underwater residential properties, which amounts to 22.7% of our owner occupied housing stock.  While this doesn't sound like good news, it is down from 23.1%  in the fourth quarter of 2010.  As that number decreases, a significant weight will be lifted on the recovery of the US housing market.

In August 2010, the federal government announced updates to a program offered by the Department of Housing and Urban Development  intended to assist homeowners who are underwater on their mortgages.  Homeowners can arrange a new FHA-insured mortgage if they meet certain qualifications.  Among these, the borrower must be current on his/her existing mortgage, which must be non-FHA, and the lenders must agree to write off at least 10% of the unpaid principal of the first mortgage.  Official guidelines can be found here.