Thursday, February 12, 2009

You've Got (Jingle) Mail

No, it's not a Christmas card. Robert Franco at Source of Title recently posted about jingle mail. I have to admit I'd never heard the term before. It was coined to describe homeowners who walk away from their homes and mail the key back to their mortgage company. With the feeling that they're out of options, many homeowners in financial despair who owe more than their property is worth are choosing to simply allow their lenders to foreclose on them. But that choice comes with repercussions. A foreclosure causes serious long term damage to credit scores, which can affect your ability to rent an apartment, purchase a vehicle, affect your insurance rates, hinder your ability to purchase another home in the future, etc. And what many don't realize is that lenders may still have legal recourse for pursuing the mortgage balance. You may not be walking away from a thing.

Moody's estimates that about 12 million Americans (about 1 in 5 mortgage holders) are currently upside down on their mortgage.


Andy Johnson said...

This trend makes me sick. Just because their "investment" is down, people walk away and let someone else deal with the loss?!? Just ride it out and your home will bounce back. Walk away and it may be a long time before you get in another.

Alex Y. said...

And there's really no point in walking away when you may still be on the hook.