Foreclosure filings in Utah are up 73% from October of 2007 to the same month this year. With this statistical fact dangling in front of us all, many home owners are wondering: Of foreclosure or default, which is the lesser of two evils?
With the pressures to make a monthly payment getting ever harder to satisfy, many home owners are simply sending jingle mail, or letters with their house keys in them to the banks. Doing so effectively defaults on your loan, and can damage your credit permanently, affecting your ability to purchase another home, rent an apartment, a car, or even get a job.
On the other hand, foreclosure also damages your credit score, making it harder to do the same things.
So what is the difference? Permanency. Defaulting on your home’s mortgage payment will leave a permanent stain on your credit rating, while foreclosure will wash out over time.
But with the number of foreclosures so high, many banks are taking action to help home owners keep their homes. Before you make any final decisions, be sure to approach your bank for advice on how to avoid foreclosure or default on your payments. One bank, Citigroup has already pledged to not start or complete any foreclosure sale if the home owners are doing their best to stay there.
Additionally, defaulting on a mortgage payment could lead lenders to seek legal consequences such as garnishment of wages or liens on properties you may own in the future. If you are facing possible foreclosure or default, you can find more information and advice about this subject from an article on KSL.com.
1 Comment
November 21, 2008 at 10:37 am
That percentage is way too high! Right now is a great time to buy. Foreclosure has got to be hard thing for many people but a blessing for others. I was able to purchase a 2 bedroom condo because it was on foreclosure. I feel really bad for the people that got kicked out, but for me it was a great deal.