2.5M Foreclosed Owners May Qualify For A Loan

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In a recent article posted by Florida Realtors, 2.5M foreclosed owners may qualify for a loan...READ ON.

According to Florida Realtors - With the economy rebounding and the average national credit score on the rise, many consumers are coming back from harder times, dusting themselves off and re-entering the mortgage market. Foreclosures, short sales and bankruptcies remain on a credit report for seven years, which means those black marks will fall off the credit files of 2.5 million consumers between June 2016 and June 2017. And most will then qualify for another mortgage.

Experian's latest analysis finds that 68 percent of these rebounding consumers are scoring in the near-prime-or-higher credit segments.

The study takes a close look at these potential borrowers and the consumers who foreclosed or short-sold between 2007 and 2010 and have since opened a new mortgage. According to Experian, these "boomerang borrowers" generally show responsible credit behaviors, have improving credit scores and are current on their debts. Overall, the short-sale ex-owners are rebounding at a higher rate than those who went through foreclosure.

Report highlights:

  • Nearly 29% of those who short-sold between 2007 and 2010 have a new mortgage
  • Just 1.5% of the short-sale group is delinquent on their mortgage – below the national average of 2.8%
  • The average for this group's auto loan delinquency is 1.2%, compared with the national average of 2.2%; for bankcards it's 3% compared to the national rate of 4.3%
  • More than 12% of those who went through foreclosure have since opened new mortgages and show positive signs when it comes to credit management
  • Just 3% of the past-foreclosure group is delinquent on a mortgage
  • The past-foreclosure people are also just below the national average when it comes to delinquency rates, at 1.9% on auto loans; bankcard delinquency rates are a little higher at 4.1%