Great news for ‘Boomerang’ Buyers – former home owners who have gone through a short sale, foreclosure, or bankruptcy in the past few years and are looking to buy again. Just Wednesday, HUD announced :
“As a result of the recent recession many borrowers who experienced unemployment or other severe reductions in income, were unable to make their monthly mortgage payments, and ultimately lost their homes to a pre-foreclosure sale, deed-in-lieu, or foreclosure. Some borrowers were forced to file for bankruptcy to discharge or restructure their debts. Because of these recent recession-related periods of financial difficulty, borrowers’ credit has been negatively affected. FHA recognizes the hardships faced by these borrowers, and realizes that their credit histories may not fully reflect their true ability or propensity to repay a mortgage.”
The “Back to Work – Extenuating Circumstances” program is designed to help Boomerang buyers who have experienced short sale, foreclosure, bankruptcy, loan modification, or other derogatory credit event, can now qualify in 12 months after the event. This provision waives the three year waiting period FHA had in place prior to this announcement and the program is here through September 2016! FHA is allowing for the consideration of borrowers who have experienced an Economic Event and can document that:
• Certain credit impairments were the result of a Loss of Employment or a significant loss of Household Income beyond the borrower’s control.
• The borrower has demonstrated full recovery from the event.
• The borrower has completed housing counseling.
According to an article I read today, ‘boomerang buyers are predicted to account for nearly one in every five home sales in the metro San Diego area this year—double the projected U.S. rate.’ With the market picking up and with buyers that had experienced an unfortunate circumstance during the housing collapse, there is now great hope. This is an enormous step for our real estate market as well as for our nations economy. If you have any questions about the possibility of using this new program, please do not hesitate to reach out to us.
– Abe Woody, Managing Negoitator, ShhortSale.com