You’re not alone. Many former homeowners are now ready to get back into the market after having previous properties foreclosed upon. According to a recent Wall Street Journal article, real-estate agents, mortgage brokers and home builders all say a significant number of new buyers are families and individuals who went through foreclosure as recently as three years ago, the time period that buyers who defaulted on a mortgage must typically wait before becoming eligible for a mortgage backed by the Federal Housing Administration.
“It’s more than incremental business, that’s for sure,” adds Dan Klinger, president of K. Hovnanian American Mortgage, the mortgage arm of builder Hovnanian Enterprises Inc. With growing interest from these formerly delinquent buyers, K. Hovnanian provides its sales staff with a flier with industry guidelines listing the mortgage-eligibility rules for all types of derogatory events, from foreclosure to bankruptcy filings. “The industry is saying, ‘Pay your dues and then get back into the market,’ ” Mr. Klinger says.
Many are happy to. However, the second time around will be different for most “boomerang” homeowners. Instead of rushing to buy in order to avoid being priced out of a rapidly evolving market, many are now seeing home buying as just that. Home buying, not investing. Neighborhoods, school districts, family growth, retirement, and anything that can affect a family’s long-term financial situation are being taken into consideration now more than in the past. The boom and bust have definitely left their mark, but it appears to be fading as the market recovers and time allows the foreclosure fiasco of the past to dissipate from memory.
Yes, suffering a foreclosure was a humbling experience.
But as it turns out it was not the end of the world. After fearing our lives would not return to normal for at least 7 years, I’m happy to report we’re better than normal just 3 years later. Our standard of living has remained the same but we spend and invest much more cautiously now. We’re no longer chasing financial freedom. We learned a big lesson and as a result are a lot smarter about how and where we invest now.Tweet