Walking Away, And What It Leaves Behind
The Wide and Lasting Impact of Quitting a Mortgage
Benjamin McNelley said he loathed the idea of walking away from the mortgage on his four-bedroom, two-bath house in Fauquier County.
The former Prince William County prison guard said he worried about what the decision might mean for his credit rating and whether he might still be on the hook for any outstanding debt.
But when both his father and his stepfather fell ill last summer in South Carolina, McNelley said, he had no choice but to quit his job and move. By then, the house he had bought brand-new and then refinanced twice during the boom years was worth far less than his mortgage. Selling the property proved difficult. He grew anxious.
With property values plummeting, real estate experts say American mortgage holders are increasingly walking away from properties — effectively choosing to have their lenders foreclose on them as a way out of the obligation — particularly when they owe more than their homes are worth. The practice is known simply as walking away or as “jingle mail,” referring to when a homeowner mails the keys back to a lender.
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