Buying again, 3 years after foreclosure

'Boomerang buyers' are returning to the housing market, getting new mortgages 3 years after foreclosures or short sales.

By Teresa at MSN Real Estate Oct 22, 2012 2:09PM

Model house and money on scale. © SuperStockThe "boomerang buyers" are back in the housing market.


We’re not referring to those young people who are living in your basement and are still looking for a job. We’re talking about people who lost their home to foreclosure several years ago and are now able to buy again.


How long you have to wait to buy again after a foreclosure or a short sale depends on a number of factors. In general, the higher your credit score was before your financial setback, the longer it will take to recover.

But, using government-backed Federal Housing Administration and Department of Veterans Affairs mortgages, some of those who lost their home are finding they can own again in as little as three years or, in some cases, less.


The FHA loans cost more than conventional loans, but they don’t require credit scores to be as high. Plus, the FHA requires only a 3.5% down payment, compared with 20% or more with conventional lenders.

"Most of the loans that are getting done are for people who have really rebuilt their credit," Frank Donnelly, president of the Mortgage Bankers Association of Metropolitan Washington, D.C., told Reuters. "They have to prove it was something like a job loss that caused this and not chronic delinquency."


April Del Rosario and her husband paid $315,00 in 2006 for a two-bedroom condo near San Diego, even though the $2,600 mortgage payment was a stretch. After their adjustable rate rose, making the payment even higher, and Del Rosario became pregnant, they let the condo go into foreclosure in 2009.

"We were really young and stupid," she told The Wall Street Journal. "All of a sudden, our already really expensive mortgage was going to go up. I was pregnant and everything was just bad timing on our part."


Three years later, the couple, who now have a son, were approved for a $280,000 mortgage on a three-bedroom new home south of San Diego. Even paying $300 a month for mortgage insurance, their payment is still less than they paid before, about $2,400. "We're trying to be really conservative,” Del Rosario told The WSJ.


Readers who left comments on the WSJ article were split over whether they thought that people who defaulted on their loan should be able to get a mortgage again so soon. One reader wrote:

"For people, like me, who live in states still suffering from foreclosure fallout, it's hard to feel happy for these homebuyers. We bought a house in 2007 that is now worth 40% less than what we paid. Neighbors in the exact same "house-boat" as us walked away from their home in 2009, as many in our community did. According to this article, these neighbors could come right back in 2012 and re-buy their old home at its new, much lower price -- not a bad tradeoff for three years of "paying their dues." Like my husband said, "Being accountable and ethical has never cost us this much and made us look this stupid."

What do you think? How long should people have to wait after a foreclosure or short sale to get another mortgage?


You can buy again the next day with our portfolio "2nd Chance" loan. There's no waiting period after a Short-Sale or Foreclosure to qualify. The requirements are pretty simple - you have to have 20% down and a 660 minimum mid FICO score. Call me at (925) 381 6577 visit or email for more info . AVAILABLE in AZ, CA, CO, DC, FL, HI, IL, MD, MT, NV, NJ, NY, NC, OR, SC, VA, and WA.
Mar 19, 2014 2:14PM

Less is more when it comes to waiting times after a Short Sale or a Foreclosure!


It is unfortunate, uncomfortable and a stressful situation to have lost a home to a Short Sale or Foreclosure. For those families impacted are now Renters or living with Family or Friends to have a roof over their head. It can be depressing to them in knowing that they have to wait for years to achieve a home of their own again.


I personally think it is unfair for consumers to have to wait years until they can purchase or refinance a home. I mean they have already been hit hard and now a long waiting period seems somewhat counterproductive. But the positive is that it does give them time to rebuild, budget and plan for the future, which is necessary for all Homeowners to do. 


If you (like me) do not have the patience to wait and you know that you can afford your new home, and then the question is........ Why Wait? 

Oh I forgot, I Have a Waiting Period that I must adhere to. 


We know for sure Home Sales prices are going up. I would guess that Interest rates have more of chance of going up rather than going down, as we are in historical lows right now.


If you have been told that you have to wait 2 to 7 years to purchase a home (depending on your unique situation) Then depending on who you spoke to, what event you had in the past, you most likely were given the correct information as it pertains specifically to Fannie Mae, Freddie Mac or FHA set Guidelines. Each lender has to Follow those guidelines and some lenders may have more stringent guidelines that they impose because of their investors develop overlays that superseded the standard Guidelines. 

If you are getting mixed information on your waiting periods, Let me know...


Ok that was a lot of words and I could have just said simply that "waiting to purchase can cost a lot of money".

What I mean by that is, if it is required that you have to Wait until years go by, then you might miss your buying power position in the home size or neighborhood you want or need as Home prices are on the rise and who knows, maybe interest rates will also rise? (I hope not)


Am I repeating myself? 

Yes I am, as Housing prices are on the Rise and Interest rates are still in historical lows - it is time to get prepared to plan out your future home purchase as it just might closer than you think.


Are you saying that there is a Solid Solution for us and we can avoid the Waiting period?

Yes, Now there is a 2nd chance solution for those impacted families to achieve again the pride of homeownership. Consumers DO NOT have to wait at all to purchase or refinance after having a Foreclosure or Short Sale. You can return to the Housing Market now!

This helps the community and the local economy to grow as these consumers are now back in to a home with a new life and positive outlook toward their future. 

It is simply amazing to see and feel the renewed energy and reaction when these families are handed the keys to their new home.

I believe knowledge is power and having the right information will assist you in making intelligent decisions for your families financial future.

If you would like accurate information that pertain to your unique situation and waiting period and more information on the 2nd Chance option, Please feel free to call me.

Michael Evans


Jul 21, 2013 5:15AM

This coming January will be 5 years since our official default date and we have not heard squat from the banks , as our home we left sits and rots and depreciates everything around it. We move into an overpriced rental (really no choice...cheapest one we could find for a family of 5) due to ...both our jobs are here. We are making just enough to make our essential bills, but not near enough to fix our credit. We tried everything to keep our home...every program out there denied us and mediation was a total flop!  We do not even have the opportunity yet to even try to repair our credit because of where w e live and where our jobs are. Three years after foreclosure is fair, but at the rate our banks are going...we have to wait first for them to officially foreclose, which could be 5, 6, 7 or more years...and then and only then does the 3 year clock start in all reality we could be waiting 8,9,10 years before we can officially purchase again!!!  WE have more than taken the brunt of all our mistakes...financially and emotionally...this farce with the banks is just downright cruel and unjust punishment...especially after THEY were bailed out!!! Who helped us at all?!! There are millions more homes just like ours sitting out there that haven’t even hit the market yet and why....because if we made such a stink and ever forced the banks to get moving...the economy would tank again!!! But why should we have to take all the responsibility? If the banks do not officially foreclose within 2 years...they should be fined and the previous homeowner’s poor credit should be erased and restored to a 700 credit score so they could move on with their lives whether, by no fault of their own, the banks have foreclosed officially or not!!! We are STILL being manipulated by the banks and it has got to stop!!! We paid our price; whereas they were bailed is their time to start paying the piper!

I believe if the government wants to really re-start the economy they ought to issue a government mandate - call it law or something - that everyone whose credit was destroyed during this great recession (depression ?) receives amnesty and their credit is restored to what it was when the recession started in early 2008 or late 2007 (whenever it was that it started).. And, or course, the credit agencies (all of them) would have to reset everyones credit.
Nov 17, 2012 8:49AM
Economic insanity is the norm for this society; the government has no business of guaranteeing any loans; talk about inviting fraud. If your going to insist on do it any way the government should collect the interest payment as well. If we had simply made $150,000 starter home loans instead of the $300,000 plus mini mansion loans we made we would not have this problem, but mass greed has made us a foolish nation. and there is no one in charge with the courage to tell the truth or do the right things. 
Nov 17, 2012 8:33AM
My advice to anyone who is holding on to their property (especially those who have been under water for an extended period of time and wish to downsize) is: do the short sale, take the loss and forget about the purchase of another home through any lender.....screw the banks! We purchased our house in 2007 for $230K and sold it in 2011 for $145K. To build the same house today would cost $300K. Yes, we got screwed and that is why I will never again purchase a house on a foundation wall. Instead, we purchased a medium priced travel trailer (3 slide-outs) and hit the road. Our kids are grown and no longer living with us. We own two pieces of property in Nevada and and clear. All of us should be enjoying life after 30+ years of working for "the man." We started our travel journey in August, 2011 and are very happy.....being able to move the RV to any location. The cost of renting a space in an RV park ranges from $250 to $600 plus electricity. Most folks who stay in RV parks are nice people and it is great to be living close to nature...."away from the madness."
Nov 17, 2012 6:42AM
We've been accountable for our home and paid our mortgage and we've had our house on the market for almost 3 years now! We've lowered our price 3 times and can lower no more or we'll have to "bring money to the table" to sell. We are trying to downsize since our family is now only the 2 of us. We can't... we can't finish planning retirement... being  the responsible one has never been like punishment before but it seems it now! If those people are truly able to buy, that would be good news for us except there's still all those foreclosure and short sales out there that have kept us from selling. Am I thrilled to hear the market is recovering? I should be, but I don't see it happening where I live.
Nov 17, 2012 4:30AM
Oh hell no! Stop government programs funded by taxpayer dollars for people who have not earned the privledge and/or who have no skin in the game. VA yes! FHA Fannie & Freddie NO!
Nov 17, 2012 3:24AM
Because of all the mortgage fraud perpetrated by the lenders who granted loans to anyone and everyone, whether they could afford them or not, I believe people should get a second chance.  I know a mortgage banker who rubber stamped approvals just so she could win trips.  It was disgusting to see her go off to europe, islands, vegas, etc. when I knew what she was doing was risky to people's lives. 
Nov 17, 2012 2:49AM
Perhaps some are  returning///I have sent e-mails to 2 different brokerages requesting information and as of yet( nearly 2 weeks now) have not received any replies...guess I dont have enough money for them to make it worthwhile. 
Nov 16, 2012 4:16PM

I think there should b forgiveness out there for ppl that want to try to rebuild their lives after such a tragic situation.  If they show themselves able to purchase they deserve a second chance.  Where is the bail out for the american families that the big bank etc got ??

Nov 16, 2012 4:04PM

Thinking of buying a home? There used to be one main thing to do in buying a home and that is making the contract contingent on an acceptable home inspection from a licensed Home Inspector. In addition, The new thing to do is make the purchase of a Foreclosed or Short Sale property contingent on an independent Appraisal from an Appraiser you employ. Pay the fee yourself and don’t employ the same Appraiser the lender uses. The fee should be in the $400 - $500 range but it could save you many thousands by not paying an inflated price for the home. I’ve noted many cases where homes were sold for much more than their appraised market value. (example: $180,000 for a home appraised for $150,000). You’re upside down as soon as you close. Use as much caution in buying a home as you would if you were stupid enough to text while driving. Don’t get fooled again!

Certified Residential Appraiser

Since 1983 (recently Retired)

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