Is it better to walk away from your mortgage?

Interesting NPR Talk Of The Nation program about people walking away from their mortgages. We’re continuing to see upside down home values in Utah so we can expect to see more Owners in this situation here in Utah.  What do I think it would take for most families to consider walking away from their home and allowing the bank to have their house?  Well, if you’re 25% upside down or more on a home that was valued at $500,000 in 2006, and is now valued at $350,000 then you are  probably looking at 10 years before your home reaches back up to a $500,000 value.   In the high value or hardest hit areas; like Herriman, Riverton, Saratoga Springs, Lehi, and Eagle Mountain in Utah county the depreciation can be as high as 60%.   If you purchased or refinanced for 100% in 2006 or 2007 you probably are 25% to 30% upside down on you home.   I definitely see people walking away when even a short sale can’t get approved.  The real estate community is very active in listing short sales but the banks, especially the 2nd mortgage holders,  are not cooperating.  I currently have 3 short sales where the 2nd mortgages are causing a foreclosure because they want too much money for their payoff or they just wait too long for the first mortgage holder to make up their minds.

I have one friend that walked away from his home.  Well, he is actually still living in the home even though it was foreclosed on 6 months ago.  The bank never contacted him.  He lives in the earth slide area of North Salt Lake.  Continue reading Will they Walk Away from Mortgage in Salt Lake