by M.C. Postins, Demand Media
Losing your home to foreclosure can be a stressful journey. But it doesn’t mean that you’re forever barred from owning a home ever again. Whether you are lent money again to buy a home is really up to individual lenders, who have their own underwriting rules and requirements when it comes to foreclosed homeowners. You can do a few things, however, to enhance your chances of getting another loan.
Timing
The longer you wait to attempt to purchase a home after foreclosure can work in your favor. In many cases, lenders put an emphasis on the past 2 years of your credit history. So, while the foreclosure doesn’t go away from your credit report for 7 years, it becomes less of a factor in your credit score, one of the chief determinants of whether you can finance a new home. A foreclosure can lower your credit score by anywhere from 200 to 300 points for the first 2 years afterward, according to
Mortgage Home Loan.
Credit Score
One way to improve your changes of buying a home after foreclosure is to improve your credit report. Liz Pulliam-Weston, a financial author, writes that you should start repairing your credit soon after your foreclosure with either an installment loan or revolving credit, such as a credit card.
Whatever type of credit you receive, you should make sure that it reports to all three credit bureaus on a monthly basis. By getting credit and making on-time payments, it will raise your credit rating and make it more likely you can acquire financing. The interest rate may still not be that great, since the foreclosure will still be on your report.
If The Home Is Yours
If your home is in foreclosure, be sure to check your state’s foreclosure guidelines. Even after your home is sold at auction, some states offer Right of Redemption, a time period in which you have the right to buy back the home, even though someone else has bought it. In California, right of redemption is a 90-day to 1-year period, depending upon how much the lender received at auction. In either case, you must pay the entire loan, plus late payments, fees and costs, before the period expires, or the auction winner keeps the property.
Type of Mortgage
It matters what type of mortgage you are applying for after foreclosure. For instance, if you are applying for a government-backed mortgage, such as a loan from Freddie Mac, Fannie Mae or a mortgage insured by the Federal Housing Administration, then you cannot apply for a period of 5 years. The waiting period is 2 years if you surrendered your home through a deed in lieu of foreclosure or sold your home in a short sale. If you’re applying for an unconventional mortgage, such as one with a variable interest rate, it’s up to the individual lender.
Down Payment
The amount of your down payment may determine whether you have the capital to buy a home after foreclosure. The down payment is really up to your lender. But, according to CNN Money, some lenders may seek as much as a 30 percent down payment from you if you went through foreclosure, especially if you did little to try and save the home, which lenders consider a walkaway foreclosure. So, if you intend to buy afterward, be aware of what you may need to save for a down payment.
My name is Scott Grebner and I have been helping my clients realize their own personal real estate dreams. Real estate is a relationship-based business that works best when client relationships are built on trust and confidence. My goal is having clients be completely satisfied with the professional and caring service they have received.
The role of technology is rapidly changing how the real-estate market functions in this country today. Gerharter Realtors is embracing these new mediums of communication to better serve our customers. We have created our e-family to better place important information in your hands to help you with your housing needs. As a part of Gerharter Enterprises we have access to a broader range of additional services and resources to better assist you. Visit me at my Web Site, Blog, Facebook, Twitter, You Tube or Pinterest. Please check out our helpful resources on Sellers Tips, Buyers Tips, Foreclosure Tips, and Mortgage Tips. For a personal consultation please visit our Office.
It seems that the dream of past generations was to pay off a mortgage. The dream of today’s young families is to get one. I would love to hear from you, about your Real Estate Dreams and questions.
Email me at scott@gerharterrealtors.com.
Friday, March 29, 2013
Foreclosure victims buying homes again
By Pete Carey
LIVERMORE — R.C. and Stacy Davis lost their condominium to foreclosure in 2009, a bad break that seemed destined to keep them from buying another home for many years.
Yet on Wednesday — only three years after their foreclosure — the couple signed the papers to buy a four-bedroom house in Livermore.
Their avenue to homeownership? A loan backed by the Federal Housing Administration.
“We’re as happy as can be,” Stacy Davis said.
The ability to get an FHA loan so quickly after a foreclosure could be welcome news to thousands of people who lost their homes during the housing bust. In the coming 12 months, about 22,000 Bay Area foreclosures will hit the three-year mark.
While mortgage giants
Fannie Mae and Freddie Mac make people wait seven years after a foreclosure, the FHA will approve loans after three years, providing the buyer has established good credit and the ability to pay the mortgage.
“There’s definitely a movement of folks who have had a foreclosure to re-emerge and re-engage in the market,” said Dustin Hobbs of the California Mortgage Bankers Association. He said brokers around the state have picked up on the trend.
“It helps the housing market,” said Guy Schwartz of CMG Financial in San Ramon, which handled the Davis’ mortgage.
The FHA, which is self-supporting, provides mortgage insurance for loans with low down payments and more flexible household income requirements. The Davis loan came with a 3.5 percent down payment plus required monthly mortgage insurance and a 3.75 percent interest rate on a 30-year loan.
“An FHA loan is a good option for those who can qualify,” said Paul Leonard, California director of the Center for Responsible Lending. And there couldn’t be a better time to try, he said.
“We are at near substantial price corrections,” he noted. That, and low interest rates present “kind of a historic opportunity if people can qualify,” he said.
But it’s not clear whether there’s a flood or a trickle of new borrowers with foreclosures in their recent past.
The FHA said it doesn’t have data on how many of the loans it insures involve people who are buying homes after a foreclosure or short sale.
Wells Fargo, the country’s largest FHA loan originator and servicer, said it doesn’t break out those loans. In the first six months of this year, Wells Fargo has made more than $73 billion in FHA-backed loans compared with $47 billion last year, spokesman Jim Hines said.
Mason McDuffie Mortgage in San Ramon is working with foreclosure victims.
“We are making loans and have made loans to people who have corrected their credit,” said Bill Godfrey of Mason McDuffie. “It’s nice to see.”
The borrowers are “people who waited three years, have a job and qualify,” Godfrey said. “They have their credit, have a job and things are looking better. They may not be perfect … but that’s part of the way to move forward. Clearly there is some thawing in that area.”
Some listing agents complain FHA loans take a lot more time and work. “It’s a hard transaction to complete,” said Bob Barrie of Keller Williams in San Jose. Barrie said he is listing a home next week in Santa Clara, and if there are multiple offers, a buyer with an FHA loan will be at a disadvantage.
The Davis’ journey from foreclosure to new home began in 2005 when they bought a condo in Concord for $262,000 at the peak of the market.
The couple’s interest-only, 100 percent-financed loan was a classic bubble product that became a formula for foreclosure during the housing crash.
To make things worse, the condo was in a rough neighborhood, said Stacy Davis, who is a special-education teacher at Mission San Jose High School in Fremont. Her husband is a senior producer for the Golden State Warriors.
They tried to sell the condo after their daughter was born, but no one wanted to buy it, Stacy Davis said. “We decided we’re going to try to stick this out. We owned it and we would make it work.”
So they remodeled, put in a new kitchen and molding.
Meanwhile, the neighborhood deteriorated. Shopping carts piled up on the sidewalk, she said. Graffiti blossomed on walls.
After their son was born, they tried a short sale and found a buyer. “Within a week, an upstairs bathroom pipe busted open and flooded the whole place — the new kitchen, the molding, all destroyed. So the buyer backed out,” she said.
Their condo in ruins, they moved to a rented house in Dublin and the bank foreclosed. Their credit rating dropped to about 500, but they were able to build it back to about 700.
“Within a year we were getting credit card applications. We didn’t feel like it affected our lives at all,” she said.
The purchase of the house in Livermore completed, the Davis family will begin moving in early next month.
My name is Scott Grebner and I have been helping my clients realize their own personal real estate dreams. Real estate is a relationship-based business that works best when client relationships are built on trust and confidence. My goal is having clients be completely satisfied with the professional and caring service they have received.
The role of technology is rapidly changing how the real-estate market functions in this country today. Gerharter Realtors is embracing these new mediums of communication to better serve our customers. We have created our e-family to better place important information in your hands to help you with your housing needs. As a part of Gerharter Enterprises we have access to a broader range of additional services and resources to better assist you. Visit me at my Web Site, Blog, Facebook, Twitter, You Tube or Pinterest. Please check out our helpful resources on Sellers Tips, Buyers Tips, Foreclosure Tips, and Mortgage Tips. For a personal consultation please visit our Office.
It seems that the dream of past generations was to pay off a mortgage. The dream of today’s young families is to get one. I would love to hear from you, about your Real Estate Dreams and questions.
Email me at scott@gerharterrealtors.com.
LIVERMORE — R.C. and Stacy Davis lost their condominium to foreclosure in 2009, a bad break that seemed destined to keep them from buying another home for many years.
Yet on Wednesday — only three years after their foreclosure — the couple signed the papers to buy a four-bedroom house in Livermore.
Their avenue to homeownership? A loan backed by the Federal Housing Administration.
“We’re as happy as can be,” Stacy Davis said.
The ability to get an FHA loan so quickly after a foreclosure could be welcome news to thousands of people who lost their homes during the housing bust. In the coming 12 months, about 22,000 Bay Area foreclosures will hit the three-year mark.
While mortgage giants
Fannie Mae and Freddie Mac make people wait seven years after a foreclosure, the FHA will approve loans after three years, providing the buyer has established good credit and the ability to pay the mortgage.
“There’s definitely a movement of folks who have had a foreclosure to re-emerge and re-engage in the market,” said Dustin Hobbs of the California Mortgage Bankers Association. He said brokers around the state have picked up on the trend.
“It helps the housing market,” said Guy Schwartz of CMG Financial in San Ramon, which handled the Davis’ mortgage.
The FHA, which is self-supporting, provides mortgage insurance for loans with low down payments and more flexible household income requirements. The Davis loan came with a 3.5 percent down payment plus required monthly mortgage insurance and a 3.75 percent interest rate on a 30-year loan.
“An FHA loan is a good option for those who can qualify,” said Paul Leonard, California director of the Center for Responsible Lending. And there couldn’t be a better time to try, he said.
“We are at near substantial price corrections,” he noted. That, and low interest rates present “kind of a historic opportunity if people can qualify,” he said.
But it’s not clear whether there’s a flood or a trickle of new borrowers with foreclosures in their recent past.
The FHA said it doesn’t have data on how many of the loans it insures involve people who are buying homes after a foreclosure or short sale.
Wells Fargo, the country’s largest FHA loan originator and servicer, said it doesn’t break out those loans. In the first six months of this year, Wells Fargo has made more than $73 billion in FHA-backed loans compared with $47 billion last year, spokesman Jim Hines said.
Mason McDuffie Mortgage in San Ramon is working with foreclosure victims.
“We are making loans and have made loans to people who have corrected their credit,” said Bill Godfrey of Mason McDuffie. “It’s nice to see.”
The borrowers are “people who waited three years, have a job and qualify,” Godfrey said. “They have their credit, have a job and things are looking better. They may not be perfect … but that’s part of the way to move forward. Clearly there is some thawing in that area.”
Some listing agents complain FHA loans take a lot more time and work. “It’s a hard transaction to complete,” said Bob Barrie of Keller Williams in San Jose. Barrie said he is listing a home next week in Santa Clara, and if there are multiple offers, a buyer with an FHA loan will be at a disadvantage.
The Davis’ journey from foreclosure to new home began in 2005 when they bought a condo in Concord for $262,000 at the peak of the market.
The couple’s interest-only, 100 percent-financed loan was a classic bubble product that became a formula for foreclosure during the housing crash.
To make things worse, the condo was in a rough neighborhood, said Stacy Davis, who is a special-education teacher at Mission San Jose High School in Fremont. Her husband is a senior producer for the Golden State Warriors.
They tried to sell the condo after their daughter was born, but no one wanted to buy it, Stacy Davis said. “We decided we’re going to try to stick this out. We owned it and we would make it work.”
So they remodeled, put in a new kitchen and molding.
Meanwhile, the neighborhood deteriorated. Shopping carts piled up on the sidewalk, she said. Graffiti blossomed on walls.
After their son was born, they tried a short sale and found a buyer. “Within a week, an upstairs bathroom pipe busted open and flooded the whole place — the new kitchen, the molding, all destroyed. So the buyer backed out,” she said.
Their condo in ruins, they moved to a rented house in Dublin and the bank foreclosed. Their credit rating dropped to about 500, but they were able to build it back to about 700.
“Within a year we were getting credit card applications. We didn’t feel like it affected our lives at all,” she said.
The purchase of the house in Livermore completed, the Davis family will begin moving in early next month.
My name is Scott Grebner and I have been helping my clients realize their own personal real estate dreams. Real estate is a relationship-based business that works best when client relationships are built on trust and confidence. My goal is having clients be completely satisfied with the professional and caring service they have received.
The role of technology is rapidly changing how the real-estate market functions in this country today. Gerharter Realtors is embracing these new mediums of communication to better serve our customers. We have created our e-family to better place important information in your hands to help you with your housing needs. As a part of Gerharter Enterprises we have access to a broader range of additional services and resources to better assist you. Visit me at my Web Site, Blog, Facebook, Twitter, You Tube or Pinterest. Please check out our helpful resources on Sellers Tips, Buyers Tips, Foreclosure Tips, and Mortgage Tips. For a personal consultation please visit our Office.
It seems that the dream of past generations was to pay off a mortgage. The dream of today’s young families is to get one. I would love to hear from you, about your Real Estate Dreams and questions.
Email me at scott@gerharterrealtors.com.
Boomerang buyers return to market after foreclosure
By Les Christie @CNNMoney
Borrowers who lost homes to foreclosure during the housing bust are starting to buy again.
Since the housing bubble burst, 4.8 million borrowers have lost their homes to foreclosure, and another2.2 million gave them up in short sales, according to RealtyTrac. While many are still struggling to recover financially, a growing number are starting to bounce back — and they are looking for a new place to call home.
Susan Edwards and her husband, Dave, lost their Palmdale, Calif., home in 2010 after Susan’s severe arthritis made it impossible for her to work her medical device sales job.
The medical bills soon piled up and the couple could no longer afford their $2,300 monthly mortgage payment. In addition, their home’s value had plunged 40% below the $325,000 mortgage balance.
“We were living under such pressure,” she said. “We looked at the numbers and knew we had to default.”
After the foreclosure, Susan’s credit score had taken a 70-point hit; Dave’s score fell even further.
By paying all of the bills on time, they nursed their credit scores back to health. And in December, two years after they lost their old home, the couple was able to buy a new homewith a loan backed by the Veteran’s Administration. VA-insured loans can be obtained just two years after a foreclosure, according to the Mike Frueh, director of the VA’s Loan Guaranty Program.
The new house is a lot like the Edwards’ old one, with one big improvement: The mortgage payment is $1,150 a month — roughly half the amount they used to pay.
“[After bankruptcy], foreclosure is one of the things that hits your credit score the hardest,” said Anthony Sprauve, a spokesman for FICO.
Foreclosures and short sales usually knock about 85 to 160 points off a credit score. Scores suffer less if you pay at least the minimum on all your other bills on time and only allow your mortgage payments to go unpaid, said Jon Maddux, the CEO of YouWalkAway.com, which offers advice to defaulting mortgage borrowers.
Once the damage is done, it can take three to seven years for a score to fully recover. But some lenders are willing to work with borrowers earlier than that.
Mortgage giants Fannie Mae and Freddie Mac, for example, require defaulters to wait five years — and have a minimum credit score of 680 and put 10% down — before they can purchase a home again. If they don’t meet that criteria the wait is seven years, at which point the foreclosure is expunged from a person’s credit report.
If defaulters show that extenuating circumstances caused the foreclosure— such as a health issue that prevented them from working,a layoff, a divorce or other one-time event — the wait may be reduced to three years.
The Federal Housing Administration allows banks to issue FHA-insured loans to borrowers three years after a foreclosure or a short sale in which the borrower was in default.
Tony and Ginger Read, who live with their three kids outside of Boise, Idaho, took four yearsto rebuild their credit after they sold their home in a 2008 short sale. Tony had been laid offand the couple had already sold their camper and other valuables in a fruitless effort to keep their home. Eventually, a broker convinced them to sell.
“It was the hardest thing we ever had to do but we couldn’t afford the payments,” said Ginger.
Tony now has a job supervising a sand and water pumping crew for the fracking industry and the couple’s credit score has regained more than half of what it lost.
In January, they were approved for a 4% interest FHA loan on a $280,000 house in Fruitvale, Idaho. They close April 12.
Mike Edgar, the broker who worked with the Reads to sell their home and buy a new one, has worked with several clients to help them repair their credit and, when they’re ready, buy new homes.
In 2012, he worked with 15 “boomerang” buyers, about a quarter of his sales. He expects that numberto double in 2013.
Tim Duy, a business manager in Verrado, Ariz., and his wife Christina, lost their house in April 2011. They’re eager to become homeowners again, but for now they’re concentrating on repairing their credit. The foreclosure, which knocked Duy’scredit score down 200 points to below 600, has since rebounded to 730.
Meanwhile, the couple window shops. “We’re in the penalty box for another year, maybe,” said Duy. “I see houses just what we want selling for $185,000. I would jump all over that if I could.”
My name is Scott Grebner and I have been helping my clients realize their own personal real estate dreams. Real estate is a relationship-based business that works best when client relationships are built on trust and confidence. My goal is having clients be completely satisfied with the professional and caring service they have received.
The role of technology is rapidly changing how the real-estate market functions in this country today. Gerharter Realtors is embracing these new mediums of communication to better serve our customers. We have created our e-family to better place important information in your hands to help you with your housing needs. As a part of Gerharter Enterprises we have access to a broader range of additional services and resources to better assist you. Visit me at my Web Site, Blog, Facebook, Twitter, You Tube or Pinterest. Please check out our helpful resources on Sellers Tips, Buyers Tips, Foreclosure Tips, and Mortgage Tips. For a personal consultation please visit our Office.
It seems that the dream of past generations was to pay off a mortgage. The dream of today’s young families is to get one. I would love to hear from you, about your Real Estate Dreams and questions.
Email me at scott@gerharterrealtors.com.
Borrowers who lost homes to foreclosure during the housing bust are starting to buy again.
Since the housing bubble burst, 4.8 million borrowers have lost their homes to foreclosure, and another2.2 million gave them up in short sales, according to RealtyTrac. While many are still struggling to recover financially, a growing number are starting to bounce back — and they are looking for a new place to call home.
Susan Edwards and her husband, Dave, lost their Palmdale, Calif., home in 2010 after Susan’s severe arthritis made it impossible for her to work her medical device sales job.
The medical bills soon piled up and the couple could no longer afford their $2,300 monthly mortgage payment. In addition, their home’s value had plunged 40% below the $325,000 mortgage balance.
“We were living under such pressure,” she said. “We looked at the numbers and knew we had to default.”
After the foreclosure, Susan’s credit score had taken a 70-point hit; Dave’s score fell even further.
By paying all of the bills on time, they nursed their credit scores back to health. And in December, two years after they lost their old home, the couple was able to buy a new homewith a loan backed by the Veteran’s Administration. VA-insured loans can be obtained just two years after a foreclosure, according to the Mike Frueh, director of the VA’s Loan Guaranty Program.
The new house is a lot like the Edwards’ old one, with one big improvement: The mortgage payment is $1,150 a month — roughly half the amount they used to pay.
“[After bankruptcy], foreclosure is one of the things that hits your credit score the hardest,” said Anthony Sprauve, a spokesman for FICO.
Foreclosures and short sales usually knock about 85 to 160 points off a credit score. Scores suffer less if you pay at least the minimum on all your other bills on time and only allow your mortgage payments to go unpaid, said Jon Maddux, the CEO of YouWalkAway.com, which offers advice to defaulting mortgage borrowers.
Once the damage is done, it can take three to seven years for a score to fully recover. But some lenders are willing to work with borrowers earlier than that.
Mortgage giants Fannie Mae and Freddie Mac, for example, require defaulters to wait five years — and have a minimum credit score of 680 and put 10% down — before they can purchase a home again. If they don’t meet that criteria the wait is seven years, at which point the foreclosure is expunged from a person’s credit report.
If defaulters show that extenuating circumstances caused the foreclosure— such as a health issue that prevented them from working,a layoff, a divorce or other one-time event — the wait may be reduced to three years.
The Federal Housing Administration allows banks to issue FHA-insured loans to borrowers three years after a foreclosure or a short sale in which the borrower was in default.
Tony and Ginger Read, who live with their three kids outside of Boise, Idaho, took four yearsto rebuild their credit after they sold their home in a 2008 short sale. Tony had been laid offand the couple had already sold their camper and other valuables in a fruitless effort to keep their home. Eventually, a broker convinced them to sell.
“It was the hardest thing we ever had to do but we couldn’t afford the payments,” said Ginger.
Tony now has a job supervising a sand and water pumping crew for the fracking industry and the couple’s credit score has regained more than half of what it lost.
In January, they were approved for a 4% interest FHA loan on a $280,000 house in Fruitvale, Idaho. They close April 12.
Mike Edgar, the broker who worked with the Reads to sell their home and buy a new one, has worked with several clients to help them repair their credit and, when they’re ready, buy new homes.
In 2012, he worked with 15 “boomerang” buyers, about a quarter of his sales. He expects that numberto double in 2013.
Tim Duy, a business manager in Verrado, Ariz., and his wife Christina, lost their house in April 2011. They’re eager to become homeowners again, but for now they’re concentrating on repairing their credit. The foreclosure, which knocked Duy’scredit score down 200 points to below 600, has since rebounded to 730.
Meanwhile, the couple window shops. “We’re in the penalty box for another year, maybe,” said Duy. “I see houses just what we want selling for $185,000. I would jump all over that if I could.”
My name is Scott Grebner and I have been helping my clients realize their own personal real estate dreams. Real estate is a relationship-based business that works best when client relationships are built on trust and confidence. My goal is having clients be completely satisfied with the professional and caring service they have received.
The role of technology is rapidly changing how the real-estate market functions in this country today. Gerharter Realtors is embracing these new mediums of communication to better serve our customers. We have created our e-family to better place important information in your hands to help you with your housing needs. As a part of Gerharter Enterprises we have access to a broader range of additional services and resources to better assist you. Visit me at my Web Site, Blog, Facebook, Twitter, You Tube or Pinterest. Please check out our helpful resources on Sellers Tips, Buyers Tips, Foreclosure Tips, and Mortgage Tips. For a personal consultation please visit our Office.
It seems that the dream of past generations was to pay off a mortgage. The dream of today’s young families is to get one. I would love to hear from you, about your Real Estate Dreams and questions.
Email me at scott@gerharterrealtors.com.
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