The Next Wave of Boomerang Home Buyers
Having lost their homes to foreclosure, bankruptcy or short sale boomerang home buyers are now ready to take on a new mortgage loan.
Boomerang home buyers are those who have lost their homes to exceptional circumstances and have been able to mend their credit and financial hardship proving that they are ready to buy again. Boomerang buyers may have to wait for a specific amount of time before they are given back the privilege of being able to buy again, depending on the mortgage product’s underwriting guidelines.
According to RealtyTrac’s (the leading provider of comprehensive housing data and analytic for the real estate and financial services industries) most recent update on foreclosure and short sale, there are currently 7.3 million boomerang home buyers of whom have already fulfilled the seven year waiting period. Seven years may be a long time, but this is the most logical time frame that most mortgage programs expect a homeowner can use to repair their credit scores and overcome their financial burdens.
Lenders are preparing themselves for this new wave of buyers and so are home builders. Since October 2014, home builders have been reaching out to these home buyers, by informing them of the eligibility guidelines of mortgage programs that they may now be eligible for based on their particular situation through a handout of informational material.
Every mortgage program has their own eligibility requirements and can vary when it comes to buying again after a foreclosure, short sale, or bankruptcy. For instance, the FHA, VA, Freddie Mac, and Fannie Mae has a wait period anywhere between two to four years to make a purchase on a mortgage. However, it is easier said than done for some of these home buyers, due to more time needed to bring their credit scores back up or even just having the record of a foreclosure, short sale, or bankruptcy be wiped off their credit history. This can sometimes interfere with the approval of a mortgage loan application.
Should everything play out the way we expect it to, the areas with the most foreclosure properties would receive the most impact from this next wave of boomerang home buyers.
Based on percentage of total housing units, here are the areas with the highest amount of boomerang home buyers:
Jessica Lucas
