Implementing The Transition Into Successful Homeownership

However, hope might be on the horizon for the victims of the mortgage disaster of 2007/2008. Home buyers who were foreclosed upon years ago, or boomerang buyers, are beginning to be eligible to buy homes again. While some feel hope after feeling bamboozled by lenders and Fannie Mae and Freddie Mac, some feel anxious and fearful of the thought of buying again. Yet there are lessons that have been learned by the mortgage meltdown. Fannie Mae and Freddie Mac provided a lesson for the

There are some programs to help such as the Federal Housing Administration that gives people a second chance with a foreclosure or short sale of a home. Low interest rates and low down payments, it gives people another chance to become a homeowner again. The potential buyer still needs to cleanup their credit to make themselves worthy of another chance. Many of the former owners are renting, but still have desires and hopes of getting back into a home soon. This helps the housing market from the boomerang buyers, because they are moving out of rental units and back into homes.

There are three aspects to the damage done to homeowners in the recent foreclosure crisis. First, their credit ratings were damaged. Second, their personal financial situations were damaged. And, third, their investment confidence was damaged. All three aspects of homeowners’ post-foreclosure stress disorder have to be addressed before boomerang buyers will be ready to return to the mortgage market.

Prior to the 2008 economic depression, obtaining a mortgage was relatively simple for home buyers. However, many of those mortgages had provisions that made it difficult for borrowers to repay their mortgages (“Dodd-Frank,” n.d.). As a result, many homeowners lost their homes when they were unable to repay their mortgages, which led to the real estate crisis. In 2010 the Mortgage Reform and Anti-Predatory Lending Act, also known as the Dodd-Frank Act, was enacted to reform how mortgage servicers vetted borrowers and to eliminate the use of predatory loan practices (Cheeseman, 2013, p. 485). Under the Dodd-Frank Act, creditors must establish borrower’s credit history, income and expected income, debt-to-income ratio, and other factors before

Foreclosure has become an outbreak affecting the entire United States of America. Realtytrac just reported in the month of April 2011 that one in every 593 housing units received a foreclosure filing. (N1) That statistic is for just one month! Some states such as Arizona, California, Florida, Michigan and Nevada continue to be plagued with an influx of homes falling victim to foreclosure or some other form of default. Each home that is a casualty to a foreclosure, short sale or even bankruptcy was collateral for the lender holding the promissory note. The consequences tend to come at a cost for the lender selling the property but a deal for the buying investor. The costs incurred and the losses experienced by the

In 2008 the real estate market crashed because of the Graham-Leach-Bliley Act and Commodities Futures Modernization Act, which led to shady mortgage lending or “liar loans” (Hartman). The loans primarily approved for lower income and middle class borrowers with little income or no job income verification, which lead to many buyers purchasing homes they could not afford because everyone wants a piece of the American dream; homeownership. Because of “reckless lending to lower- and middle-income borrowers who could not afford to repay their loans many of the home buyers lost everything when the market collapsed” (Tankersley 3). Homeowners often continued to live in their houses for months or years without paying any

Following the 2006-2008 housing market crash, 4.8 million of homeowners lost their most valuable assessment to foreclosure, and another 2.8 milliongave up their homes in short sales. These former homeowners that are reentering the housing market after losing their homes during the housing market financial crisis are now part of a wave of “boomerang buyers.” According to Real Estate experts, boomerang buyers who are returning to the market were at least 10 percent of all United States home purchases during 2014. More important, this trend is expected to increase in 2015 and 2016 as more boomerang buyers become eligible for new options to get their dream homes again. The unquestionable fact is that a great majority of boomerang buyers are hardworking, honest people that got caught in the middle of one of the biggest housing crisis that occurred in the last 100 years. Fortunately, those housing crisis’ victims are beginning to see the light at the end of the tunnel since several options are becoming available to them in order to get back into home ownership. Among these options, I like to explore some available avenues for those boomerang borrowers to include the rent to own option, Veterans Affairs backed loans, and owners financing option.

A few years ago our country went into a foreclosure crisis. Millions of families lost their homes when the housing market crashed but now they are back. These buyers returning to the market are boomerang buyers. Currently there are now 729,000 household that were foreclosed during the bust that are now eligible for a mortgage. There are multiple strategies for buying a house after a foreclosure. In all of these strategies the families must be determined and hard working. The first is the rent to own option.

Too many Americans have fallen victim to the crisis that has become the norm for our citizens these days. Lenders no longer want to work with individuals who have gone through the foreclosure process and for many it is not only their homes they lose. Some have lost their jobs and/or families, others fall into a deep depression and worst of all some have taken their own lives.

Why would these Boomerang Buyers want to jump back into homeownership and at what cost would they “buy” another home? It’s understood that the American Dream of homeownership runs deep in the American belief system. Even people who have experienced foreclosure in the past, still dream of owning another home of their own even BEFORE they move from the foreclosed home. Why is this so important to Americans? The answer is partly based on marketing and myths that have been around for many years. The ability for one to create a pathway back to homeownership is varied and like many things, has potholes along the road. From predatory lenders to landlords who participate in rent to own or owner financing

Brooklyn, NY – December 30, 2009 Foreclosures continue to rise drastically across the United States due to the recession, and have effected, and continue to affect thousands of families and individuals every day. One aspect we must take into consideration is that most people are not informed of what foreclosure means, or the process, even those who are homeowners. I believe that one step to preventing foreclosure is to educate first-time homebuyers. In addition, first-time homebuyer programs should not only assist potential buyers with financially preparing them to buy a home, but to keep the home once

Seeing other people reactions towards foreclosure helps me to develop a meaningful value of life and how to appreciate it everyday of my life. As I see what is going on around me I came up with three plans that can be executed to help all people who are dealing with foreclosure issues. This can become a major factor for the economy. One is called Own A Home , Financially Fit, and Bills To Kill. These are guaranteed plans that will help any individual that feels that they are not financially secured to become a homeowner. The Own A Home program is designed for aspiring homeowner in which they

Buying a home is unlike any other purchase in a consumer’s life. The investment is a major decision, both for an individual’s future and their finances, and gathering the courage to make it is challenging under any circumstances--much less after an extreme financial crisis. But there are many viable solutions to the challenges that “boomerang buyers” are facing today, including (but not limited to) the option of renting-to-own. These strategies enable people who were once “foreclosure victims” to reenter the world of home ownership comfortably, taking gradual steps toward their ultimate goal of buying a new house. This is an essential component of the American dream, and one that everyone should be entitled to pursue.

These newly educated buyers have learned a few ways to come back stronger than ever and stay on top thanks to their shortcomings from the past. One of such ways is by a federal program called “The back to work program”, which helps out those who lost their homes due to the crash. This program is federally insured and offers buyers the second chance they need in as little as 12 months after a foreclosure or bankruptcy. The buyer must be able to prove that there was at least a 20% loss in income before the action took place as well. Although many if the victims are afraid to get back into the game, they are finding more and better ways than ever before.

Due to the recession, many households became financially burdened. As the economy suffered many people faced job loss or at the very least a decrease in income, therefore, leading to many foreclosures. Because of the impact a foreclosure has on one’s credit score, these individuals are not able to qualify for a new loan on another house. Fortunately there are other options in buying a house besides qualifying for a loan such as owner finance and rent-to-own.