******FOR IMMEDIATE RELEASE******
Housing crisis authorities LoanSafe.org and YouWalkAway.com, through their new website AfterForeclosure.com, have partnered to offer an exclusive view into the “boomerang” buyer demographic. With over 140,000 members and close to 500,000 posts, LoanSafe.org quickly emerged as a heavyweight in consumer advocacy during the foreclosure crisis. The unique free forum allowed homeowners to connect with each other and with professionals in attempts to gain relief from housing distress. Unfortunately, in many cases homeowners were unable to escape their underwater properties and eventually entered foreclosure.
YouWalkAway.com assisted over 8,000 of those who ultimately went through the daunting process of foreclosure. Direct access to “strategic defaulters” and their financially strapped counterparts made YouWalkAway.com a media favorite for interviews and comments during the foreclosure crisis. Many clients were eager express opinions about their situation and, eventually, their desire to purchase again once it was over. In response, YouWalkAway.com established AfterForeclosure.com to help those most affected by the housing crisis take charge of their financial future.
Based on a poll of their combined members, LoanSafe.org and AfterForeclosure.com are confident that these potential buyers, growing rapidly in both numbers and desire to rejoin the housing market, will make 2014 the year of the “boomerang” buyer.
Changes in lending guidelines and population shifts make these buyers essential to the recovery of the housing market. According to CoreLogic’s latest report, 4.8 million foreclosures have been completed since September of 2008. This figure does not include short sales, bankruptcies, loan modifications, deeds in lieu of foreclosure and other mortgage-related disqualifying events. Jon Maddux, Co-founder of AfterForeclosure.com says: “Alienating this large and growing pool of potential buyers does not bode well for the market in an environment where natural housing advancement has been largely disrupted.” College students are graduating laden with student debt and limited employment options, baby boomers are aging in elevated numbers and those who waited on the sidelines during the crisis already purchased during the small opportune window between crisis and recovery. Maddux continues: “There are literally millions of ex-homeowners who may be qualified to buy a home again, but are unaware of the help that is readily available to them through existing and new loan programs.” Clearly the word needs to spread.
Insightful Survey Data
According to an exclusive poll of LoanSafe.org and AfterForeclosure.com’s members:
- 79% of those who lost their homes during the crisis are interested in buying again.
- 41% report that their income is higher than when they first purchased and 24% report that it is the same.
- 63% report that their other debt obligations are lower (30% said “significantly lower”) and 22% report it being the same.
- 46% report the desire to purchase in a lower price range and 29% report wishing to purchase within the same price range.
“Boomerang” buyers are investing more into the purchase of a new property than in the past: survey responses indicate that they aren’t just putting down the minimum required. Over 50% stated that they plan to make a down payment of 10% or more as part of their next home purchase. It can be argued that the 0% down payment programs of the past made it easier for homeowners to walk away from properties they were essentially renting from the bank. Higher down payments suggest that “After Foreclosure” buyers are in for the long haul and don’t intend to make the same mistakes the second time around.
Survey responses also suggest that their desire to purchase again stems from static aspirations, such as setting down roots and investing in their own future, versus fluctuating factors like low prices and interest rates. In the past, rapidly rising prices led many to believe that they’d get “priced out” of the housing market altogether, leading to hasty purchases that may not have happened under less duress. “Boomerang” buys are for the right reasons.
Almost in acknowledgement of the importance of opening doors to this pool of buyers, the Federal Housing Administration recently implemented the “Back to Work” program. This program allows the purchase of a new property as soon as twelve months following a foreclosure or short sale provided that the borrower can prove that their prior default was the result of a financial hardship. “Financial hardship” is strictly defined as an employer-driven loss of at least 20% in income for six months or more. Although the program is definitely a step in the right direction, it leaves those who were self-employed and those whose default was caused by a need for relocation, increased expenses or loss of rental income all out in the cold. However, the worst violation by far is the lack of awareness. Of those polled, 81% have never heard of the program.