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Boomerang Buyers Get Second Chance, Metamora MI.

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Real Estate Broker/Owner

Boomerang Buyers Get Second Chance, this article from RealtorMag talks about former homeowners that are credit ready to step back into home ownership...

donald horne, realtorAbout 7.2 million homes have been lost to foreclosure or short sale since the housing crash began, according to housing data from Black Knight Financial Services. That has forced millions of former home owners into renting, as they work to rebuild their credit.

But a government program launched last summer by the Federal Housing Administration is helping these former home owners step back into home ownership in as little as a year after a foreclosure or short sale. The FHA’s Back to Work program allows them to qualify for low interest rates with a minimum of a 3.5 percent down payment. Applicants must show that the main culprit behind losing their home was that they lost at least 20 percent of their household income for at least six months. They also must show they’ve worked to repair their credit for at least a year.

Lenders are reporting an uptick in boomerang buyers coming in to explore financing opportunities for a home purchase.

"We see a lot of boomerang buyers,” says Matt Weaver, a lender with PMAC Lending Services in Florida. “I'd say about 20 percent of my current clientele has either suffered a short sale or a foreclosure in the past and are now re-buying back into the marketplace."

But while opportunities to apply for a home loan are increasing, some are hesitant to step back in, housing analysts say.

"Based on the fact that the home ownership rate isn't rising again and demand for single-family rentals is historically high, the comeback buyer is not a significant phenomenon in the market," says Mark Fleming, chief economist at CoreLogic. "Given the duration of the recovery, it's likely that many of the initially foreclosed borrowers have repaired their credit and are now creditworthy, but the scale at which they will enter the market is not sufficient to significantly influence demand."
source: realtor magazine, daily real estate news, cnbc

Donald Horne, Team Success Listing
Associate Broker for Coldwell Banker Shooltz Realty
DonaldHorne.Realtor@gmail.com
810-338-0628

Comments(1)

Inna Ivchenko
Barcode Properties - Encino, CA
Realtor® • GRI • HAFA • PSC Calabasas CA

Those who lost their homes to foreclosures or short sales 2007-2013 are projected to make about 10% of all home purchases in 2014-2015 and even more in 2016.

As of August 16 Fannie Mae requires a 4 year waiting period after a short sale( the buydown LTV's have been eliminated), yet, you can still do a loan after 2 years with verified extenuating circumstances.

Sep 07, 2014 06:47 PM