THE SEVEN YEAR ITCH OR THE “BOOMERANG BUYERS”

THE SEVEN YEAR ITCH OR THE “BOOMERANG BUYERS”
 
Oh, no, no…. I’m not talking about the famous and classic Marilyn Monroe movie from 1955 but rather about current US laws of forgiving after seven years being in the doghouse for doing bad things. As you
know everybody deserves a second chance. (Try to explain that to your wife after forgetting to take out the trash one evening) But seriously, even if you had a bankruptcy the chances are that after seven years all the records (with a few exceptions like federal taxes) related to that bankruptcy will be erased from your record.

The “Great Recession” of 2008 has effected millions of homeowners. Many were 60 days or more past due on their mortgage loan, losing their mortgage through foreclosure, short sale or other non-satisfactory closure, or had a loan modification, etc. Borrowers must often wait for years, generally seven years following a short sale or foreclosure to qualify for a mortgage again. But for those who have repaired their credit, built up their credit score again many of these former homeowners likely will want a second chance at home ownership.
 
It’s been a little over seven years since the beginning of the mortgage crisis in 2008 and this is significant because as I mentioned many derogatory items, such as foreclosures and short sales can prevent consumers for qualifying for a new mortgage for approximately seven years. Enter “The seven year itch” and the “Boomerang buyers”
 
A “Boomerang buyer” is a former home owner who experienced foreclosure or other negative impacts in the past but become eligible to re-enter the mortgage market after the “penalty years.” They are the ones feeling “The seven year itch” to become home owners again. Realtors are experiencing these “Boomerang buyers” coming back to the market in droves. Based on a recent report by the National Associations of Realtors, within five years the number of “Boomerang buyers” wanting to become home owners again could swell to over 2 million, providing a significant pressure on the single family dwelling market. Add to the situation that the Federal Housing Finance Agency’s new policy will permit many foreclosed home owners to purchase the homes back that they once had lost at fair market value, you can foresee the boom in the housing market.
So, what is the moral of the story? The American Dream of owning a home, providing stability for the family, is alive again.
 
Yes, “I’m on my way
 
I’m on my way
Home sweet home…” (Motley Crue 1985)

Trackback from your site.

Leave a comment

You must be logged in to post a comment.