Mountain House, California is the most underwater town in the United States. Unfortunately, that doesn’t mean it’s a good place to go scuba diving. Nearly 90 percent of homeowners in this Central Valley town owe more on their homes than they are worth, the highest percentage in the country. The average homeowner is underwater, as this situation is called, by some $122,000.

This planned community located about 60 miles east of San Francisco has seen home values plummet over the past several years. The first homes sold here were in 2003, just as the real estate boom was reaching its zenith. Many buyers purchased their homes with zero down and interest only loans, believing that home values would continue to rise and they would have a valuable asset. That has not happened, and now banks are taking over more of the homes.

In the third quarter of 2008, according to research, banks took over 101 properties in the zip code that includes Mountain House.

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