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Utah's foreclosure rate jumped almost 73 percent from October of this year, compared to October last year. This state is now ranked 13th in the nation for foreclosures.
Those numbers led one KSL viewer to ask whether, in some cases, is it simply better to walk away and let the bank take over? Tonight, we asked the experts that question.
Those we spoke with say the consequences of essentially defaulting on your mortgage are pretty severe. That is, if you don't mind being cut off from any kind of credit for a while.
Subprime mortgages, A.R.M.s, small down payments, no down payments; those were the days of easy credit. Critics argue lenders set themselves up for part of the mortgage crisis. Even if you agree with that, experts say that a mortgage still needs to be paid every month.
"Walking away from your home will permanently injure your credit; a bankruptcy will go away after a while," explained Francine Giani, executive director of the Utah Department of Commerce.
Giani says walking away is almost like limping. You'll have credit so damaged you can't find a place to rent, can't get auto insurance, and in some cases can't even find a job. That's because many companies run credit checks on prospective employees.
"Walking away from a home doesn't take away from the fact that you own the home and you've walked away from it," Giani said.
Some homeowners may feel that's their only choice. They send the lender "jingle mail," house keys rather than a house payment. But Giani says there are places to go for help.
One stop may be the bank itself. Some of the nation's largest banks are taking steps to help homeowners stay in their homes. Citigroup just announced it will not start or complete a foreclosure sale on any borrower who is trying hard to stay put.
"I think that many people will find that banks today are doing as much as they can to try and keep people in their homes," Giani said.
Here are some other things to remember if you're thinking about walking away from your mortgage: Mortgage companies, through some legal jostling, can actually garnish your wages until you pay what you owe. They can even put liens on any property you may own in the future.
E-mail: lprichard@ksl.com
E-mail: tcallan@ksl.com
