Former home owners who once walked away from their homes in a move called “strategic default” are back on the market, eager to buy a home again.
Nearly 80 percent of strategic defaulters say they want to buy a home again within the next 12 months, according to a survey by YouWalkAway.com, a web site that helps borrowers in the legal pitfalls of strategic default.
The market potential for these comeback home owners could be huge: The number of eligible home buyers who have a foreclosure on their record will reach 1.5 million by the first quarter of 2014, according to data by Moody’s analytics.
Borrowers who defaulted on their mortgage during the recent recession may fare better at qualifying for a loan again than those who defaulted on multiple credit accounts and auto loans too, according to a study by TransUnion conducted in 2011.
“There appears to be a pocket of opportunity among mortgage-only defaulters that is not the result of excess liquidity, but rather the unique circumstances of the recent recession,” says Steve Chaouki, group vice president in TransUnion’s financial services business unit. “This new market segment that the recession created is an important one for lenders to understand. They have the potential, today, to be stronger and more reliable customers.”
Still, some comeback home owners will have to wait. For example, the Federal Housing Administration requires home owners who faced a foreclosure to wait three years before they can buy again while Fannie Mae and Freddie Mac require up to seven years for a strategic defaulter to wait to apply for a mortgage again.
The author of this article is: realtormag.realtor.org
See the original post at: http://realtormag.realtor.org/daily-news/2013/02/25/foreclosed-home-owners-seek-second-chance
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