For sale: Jobless rate adds to foreclosure woes

(Deseret News) With the number of existing homes sold in Utah recently falling to the lowest level in 15 years, it's no surprise that some people who are trying to sell properties are becoming desperate — so desperate that about one of every six houses listed for sale is priced for less than was originally paid for it.

According to data compiled by the Salt Lake Board of Realtors, 17 percent of residential property listed for sale or under contract is a short sale — approximately double the amount of one year ago.

In real estate, a short sale occurs when a lender allows a customer to sell a home at fair-market value and pay off the loan for less than the amount owed on the loan.

"These are not just upper-end homes," Dave Anderton, Board of Realtors spokesman, told the Deseret News. "Roughly 75 percent of the 1,401 short sales listed … are prices below $300,000. Only 7 percent are priced above $500,000."

In Utah, 8.42 percent of homeowners with a mortgage are either delinquent or in foreclosure, Anderton said. Nationally, just over 12 percent of homeowners are behind in their payments, he added.

Rick Bentley, sales manager and associate broker for Coldwell Banker Residential Brokerage, said another issue contributing to the rise in short sales is the faulty loan practices employed by lenders during the housing boom.

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