Lenders aren’t humming Jingle Bells when they talk about Jingle Mail. In an article today, CNN reports that so many people have turned their keys in and walked away from their mortgage that they have a new term for it: Jingle Mail. With the decrease in home values and increasing interest rates, many are making the decision to cut their losses and turn those keys back into their lender.CNN reports that
“The trend of walking away is most pronounced among real estate investors, according to Jay Brinkman, an economist with the Mortgage Bankers Association (MBA).
But families are doing it too. “If they have to stretch to make mortgage payments for a home that will not recover its value, then yes, they may walk away,” he said.
Often they chose hybrid adjustable rate mortgages (ARMs) that came with low initial payments. After a few years, interest rates on these loans reset higher. But buyers thought they could count on the increased value of their homes to refinance into affordable, fixed-rate loans.”
CNN also states that there are some who are choosing to pay consumer debts, such as credit cards and auto loans while letting their mortgages fall behind and some who can afford to pay are choosing foreclosure due to the declining value.
You can read the complete article here.
Other Recent Mortgage News:
Effect of Raising the Fannie Mae/Freddie Mac Loan Limits
Legislative Update on FHA Loan Limits
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