A new survey from First American CoreLogic, a real estate data company, has concluded that nearly a quarter of all homes with mortgages are worth less than what is owed on the loans.

According to the data, which were first reported in the New York Times, nearly 10 million homeowners are either at negative equity or zero equity. The four states with the highest number of homes that are underwater: California, Florida, Nevada, and Arizona.

None of this would come as a surprise to some acquaintances of mine, who like millions of Americans find themselves in a leaking boat in the middle of a lake without a paddle.

He was a real estate developer of high-end homes in Arizona when that market crashed. He lost his job and a six-figure cash investment in the process. The cash came from a home equity loan on his primary residence, which put his primary residence at risk.

While he was employed, he and his wife had no trouble making their monthly payments. But once he lost his job, making the payments on their first and second mortgages with only her self-employed income became impossible.

They were turned down for a refinance because their income isn’t enough to support the loan payments. Their house is now worth substantially less than what they owe, which would make it impossible to sell. And while they’ve gone back to their bank and asked for a relief under the new mortgage edicts from Washington, they – like so many others – don’t appear to qualify.

If you can’t sell your home because it’s not worth enough to cover the mortgages and you can’t refinance because the bank says you don’t have enough income to make it work, what can you do?

One of the answers is to hand over the keys to the lender. In my acquaintance’s case, that would mean the second lender would be completely wiped out and the primary lender would take back a house that’s worth substantially less than what is owed.

But returning the keys to the lender only adds to the pile of foreclosures that need to be cleared out before we can find a floor to the housing recession.

Recently, more lenders agreed to pitch in to refinance mortgages so that they are affordable to the inhabitants. Fannie Mae and Freddie Mac announced that they would modify mortgages of those who are three months behind on their mortgage. Sheila Bair, who heads up the FDIC, doesn’t think the proposal goes far enough.

But how far is far enough? Modifying mortgages means investors who bought these loans will take a huge hit. Fair enough, since they bought a bad investment. But it may make them reticent to buy mortgages in the future or lend out other cash. Lenders will take a huge hit, although some of this might work out in the long run and it will be less than if they have to foreclose on an extra 2 million homeowners.

And so the credit crisis continues.

Where we are now is a place where everyone loses: Homeowners who are facing foreclosure; homeowners who are able to make their payments just fine, but whose house is worth less than the mortgage on it; homeowners who are trying to sell but can’t because there is a glut of foreclosed homes listed for sale in their neighborhood; higher-than-desired mortgage interest rates because investors have concerns about whether Fannie Mae and Freddie Mac will be backed by the Uncle Sam in the years ahead; lenders who don’t want to make loans; businesses that can’t find the financing they need to make payroll; and, a period of recession and rising unemployment, which means more homeowners who can’t make their mortgage payments and will ultimately face foreclosure.

We have to break the cycle.