Remaking the Dream
As they come back to the market, formerly foreclosed buyers will
look to you for guidance. By Beaty Reynolds and Paula Hess
They’ve been on the sidelines for a while now, living in rental apartments or their in-laws’ spare bedroom. While some who lost their home to foreclosure over the past half-dozen years have decided that home ownership is not the right path to pursue, another group has been patiently waiting—and planning—for another chance. This contingent of potential buyers has been fo- cused on rebuilding their credit, saving up for a down payment, and watching the interest rates descend to record lows while rents creep upward. A fall 2012 report by the Federal Reserve Bank of San Francisco found that 30 percent of borrowers who defaulted in 2001 took out another mortgage within 10 years. So even though the odds remain steep for those involved in more than 4 million fore- closures since 2007, you can expect to see more and more of such consumers reaching out for your help. It’s incumbent on you to help these potential buyers determine whether they’re truly capable of getting back in the market. Do you know where to begin? Blanca Byrne, ;;;, broker-associate at Keller Wil- liams Premier Properties of Miami, says the No. 1 hurdle, even for those who have gotten their personal finances back on track, is access to the mortgage mar- ket. “Many of these buyers have not recuperated from long-term job loss, loss of business income, or the loss of all their savings and retirement accounts. In some cases, buyers may be ready to purchase and have the down payment money saved. They may be able to af- ford monthly payments. But they can’t qualify for the loan needed to make the purchase.” That said, practitioners are finding that a fore- closure doesn’t necessarily dampen a former home owner’s enthusiasm for returning to the market. “While some rebound buyers are discouraged, many more remain eager to jump back into home owner- ship. They miss the mortgage interest deductions. They still think and feel like home owners and want a place to call their own—not just pay rent to a land- lord,” says Aaron Lewis, ;;;, associate broker and REO specialist with Prudential California Realty in Turlock, Calif.