Foreclosure Situation In Utah Worsening:

June 16th, 2008

The foreclosure situation in Utah is grim and worsening. Thousands are stumbling in mortgage payments although the number of loans in trouble is less than the national average. Of 431,570 mortgages in Utah, 3.81% are 30 days lagging behind during the first quarter of 2008. This is an increase from 3.05% during the same period in 2007, according to reports released by Mortgage Bankers Association. The delinquency rate of Utah is much less than what it was in 2003 – 5.3%. It is the country’s 11th lowest rank. Across America the delinquency rate during the first quarter of this year increased from 4.84% in 2007 to 6.35%.

In Utah nearly 16,400 loans are well behind the due date – this is a 32% jump from the figures of last year during the same period when out of 407,362 house mortgage loans 12,424 were lagging behind a month or more. The statistics indicate the pressure of inflation on Utah families. In many instances past loans are just beginning to reset to higher niches. Many in the housing industry have found themselves without jobs or work. Food prices are increasing together with fuel and health care. This combination has caused many to default and once that starts the debts keep piling up.

The Association of Community Organizations for Reform Now is engaged in counseling in Salt Lake City. Most of those contacting the group complain of rising medical costs preventing them from meeting mortgage dues. Jeff Thredold, economist from Utah opines that the economy of Utah is just not strong enough to absorb these shocks. This has led to increase in delinquencies since the previous year. The state continues to create jobs but the pace is relatively slower. The downhill roll is clearly perceptible.

Delinquencies are the first warnings of impending foreclosures. Once foreclosure starts usually the house is lost. Many delinquencies end up in foreclosures but not all. A few years ago there was a strong demand for houses. But today these very regions are dotted with foreclosed units. Because of the tumbling real estate market the borrowers can neither refinance nor sell their units to get back financial stability. The values of houses have fallen so low that often it is less than the loan due. Thus many in Utah faced with foreclosures do not think it is worth the while to struggle for the houses – they are just handing over the keys and walking away.