Is 2014 the Year of the Boomerang Buyer?
Here’s some good news for foreclosure victims. They could still keep their American dream of owning a home alive. And they could live that dream sooner rather than later.
Housing experts are now talking up recent changes that would allow foreclosure sufferers to become homeowners sooner than they are anticipating. In fact, that could happen as early as this year, possibly making 2014 the year of the “boomerang buyer.”
According to reports, revisions to Federal Housing Administration guidelines and technical updates to Fannie Mae loan approval systems over the last six months have now made it possible for foreclosure victims to buy again a year after they lost their homes to the foreclosure process. In the past, defaulters had to wait an extensive period of time before they could qualify for loans. The new changes would bring a huge relief to millions of people.
Founders of AfterForeclosure.com said that millions of borrowers nationwide, who are otherwise banned from the loan process, will be able to qualify for a mortgage this year. Mortgage Broker Skip McDonough told the Palm Beach Post that he is working with clients who defaulted on their loans during the housing bust.
“The old-fashioned way of doing it was a seven-year waiting period,” said McDonough, president of Family Mortgage. “That’s changed, and people who don’t believe they can qualify are qualifying.”
The boomerang buyers would be an important driver of the housing market recovery process as other factors recede into the background, McDonough and Jon Maddux, co-founder of AfterForeclosure.com, told the paper. Investors, who were the main drivers of the recovery process, are expected to slow down their buying this year as housing prices start to climb. But the boomerang buyers may keep the market stimulated.
“People who are primed to buy are the ones who qualify on all levels but had a short sale or foreclosure on their record,” Maddux told the Palm Beach Post. “The refinance boom is over and lenders are looking for a way to capture more business.”
Of course, the eligibility of boomerang buyers will depend on whether they defaulted on their mortgage obligations because of a financial event during the economic downturn, which caused them to lose their home. Also, the short sale or foreclosure should be the only red flag on what would otherwise be a squeaky clean credit report, the paper reported.
Tahoe Sees Return of Luxury Market
Last year, the housing recovery was in full swing in Lake Tahoe, but even better news is that the luxury market fared extremely well.
According to the Sacramento Business Journal, sales of homes over $1 million rose by 42 percent compared to a year-ago period. Condominium sales also rose by 62 percent, with units selling for more than $500,000, the paper said. People who were otherwise cautious because of the economy are now buying again, according to Susan Low, senior vice president and corporate broker at Chase International.
“The Nevada side did better than the California side, and that’s driven by Proposition 30,” she said, referring to the higher taxes on wealthy California residents that went into effect a year ago.
“But I also think there were a lot of people who were on the fence for quite some time,” she said. “They realized last year that we’d achieved the bottom of the market, and they’d better jump in now.”
Condos as well as homes performed well in almost every region around the lake when compared to the previous year, the report said.
Read More: realestate.com