Homeowners Facing Foreclosure Have Little Hope

More than 22,000 Utah homeowners facing foreclosure, according to the Salt Lake Tribune's analysis of RealtyTrac data.

Since July 2008, more than 18,000 families across the state have received default notices, 4,720 of those were filed during 2010.

"They come to us on the worst day of their lives," Ryan Carver, director of housing counseing at the AAA Fair Credit of Salt Lake City told the Tribune. "Most people are living at the edge of their means, and all it takes is a slight hiccup and you have an equivalent of World War III going on in your personal finances."

Credit became too liquid in Utah during the mid-2000s, causing buyers with credit scores as low as 560 to obtain a home mortgage. Now, top banks such as Bank of America and Wells Fargo, along with loan servicing companies, are beginning to foreclose properties.

Additionally, the housing market abruptly halted in the summer of 2007, during a period when many homeowners were hoping to refinance their adjustable rate mortgages (ARMs) in anticipation of climbing home values. However, home values plummeted, leaving homeowners unable to refinance their ARMs and consequently pushing their personal budgets to the brink in order to keep their homes.

Because of the housing crash, lenders are being more cautious with whom they lend to. The Federal Housing Administration (FHA) has made their loans more difficult to receive. According to the FHA, buyers must now obtain at least 3.5 percent of their own money for a down payment and have at least a 620 credit score.

With lenders tightening up their requirements, it should lead to better housing conditions in the future.

"There should be fewer foreclosures," Al Bingham projected, a Salt Lake City mortgage lender.