Foreclosure ‘Boomerang’ Home Buyers Return

Daily Real Estate News

Families who had once lost their home to foreclosure following the housing crash are now re-emerging and looking to buy again, The Wall Street Journal reports.

As Stuart Miller, chief executive of national homebuilder Lennar Corp., puts it: More people are “coming out of the penalty box.”

Some builders have a growing interest in reaching out to these “boomerang” foreclosure buyers. For example, builders like K. Hovnanian are providing sales staff with fliers that detail mortgage eligibility rules for families who have undergone a foreclosure or bankruptcy.

“The industry is saying, ‘Pay your dues and then get back into the market,’ ” says Dan Klinger, president of K. Hovnanian American Mortgage.

In order to qualify for a mortgage backed by the Federal Housing Administration, families must wait three years or more to apply again following a foreclosure or short sale. Using that benchmark, about 729,000 households that were foreclosed on during the housing crash are now eligible to apply for an FHA mortgage–up from 285,000 a year ago, The Wall Street Journal reports.

Fannie Mae and Freddie Mac require a much longer wait than FHA to qualify for a loan after a foreclosure or short sale, up to seven years.

But just because “boomerang” families are allowed to apply again for financing for a home purchase doesn’t mean they’ll qualify for a loan, housing experts say. These families will still have to show a strong credit score and meet stringent underwriting standards.

Source: “Buyers Back After Foreclosure,” The Wall Street Journal (Oct. 14, 2012)


Michelle Castle provides mortgage loans to all of North Texas and Southern Oklahoma. Call Michelle Castle at (903) 892-1998 if you are looking for a home loan in North Texas and Southern Oklahoma. Click here to visit Michelle’s website and apply for a loan.

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About Michelle Castle

Since 1996 I have had the pleasure of assisting thousands of families find the perfect loan. I understand life is hectic and moving a family can be a stressful experience. I believe it is important to keep my clients informed every step of the way. I am easily accessible so my customers can focus on moving their family into their new home. If you have friends or family that aren't sure if they qualify to buy a new home, send them my way. I would be happy to get them on the path of homeownership. I also enjoy helping families refinance their homes to either get their equity out of their home or do just save money. Allow me to give you the peace of mind families have trusted for years.

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