Did you know more than five million American families endured foreclosure on homes between 2007 and 2014?

Likewise, are you aware that most negative credit events only remain on your credit report for seven years?Foreclosure can be survived.

Foreclosure is defined as, “A situation in which a homeowner is unable to make full principal and interest payments on his/her mortgage, which allows the lender to seize the property, evict the home owner and sell the home, as stipulated in the mortgage contract.”

Some survivors of foreclosure from the days of the financial crisis are discovering that they now qualify for mortgages.

We opened this topic in our previous blog, and even gave this group of finance seekers a special name:  They are called the “Boomerang Buyers.”  We invite you to check out that blog for some statistical background about them.

Life after Foreclosure

Many of those who lost their homes due to the financial crisis, have become financially stable with good credit scores and strong employment records.  These survivors are just beginning to realize that it is possible that they could again secure financing for a home.

As we mentioned in Part One, these buyers could give our economy quite a boost as time progresses.  “The dark shadow of the foreclosure crisis is finally beginning to fade,” says Mark Zandi, chief economist at Moody’s Analytics, a unit of Moody’s Corp.  “That should be a positive for single-family housing and, by extension, for the broader economy.”

Financial Recovery and FICO

If you have survived a foreclosure, cleaned up your credit and maintained a good job, chances are you have revitalized your credit and recovered your ability to attain a mortgage.  Let’s look at a few recent statistics:

Fair Isaac Corp., the developer of the famous FICO credit scores, “estimates that there were 910,000 consumers whose credit reports showed they had foreclosure proceedings begin on their homes between October 2007 and October 2008.”  Now here is the amazing fact:  “Of those, some 264,400 had no evidence of the event on their credit reports by last October.  That number will rise by up to 645,600 by the end of this year, according to FICO.”

Buying Power after Foreclosure

Can those who create a good FICO score after the seven-year mark actually qualify for home loans and lower interest rates?  At Palm State Mortgage, we do not want to give you a false impression.  You will not find every lender eager to trust you again.

On the one hand, “After being hit with mortgage-related penalties, many large banks, such as Bank of America Corp. and J.P. Morgan Chase & Co., decided to pull back sharply on mortgage lending and put in place tough credit requirements that excluded all but the safest borrowers.”

They prefer not only high credit scores but unblemished credit history, and they shut out some foreclosed-on borrowers.

On the other hand, “Some of those banks, such as Wells Fargo & Co. and SunTrust Banks Inc., have lately said that they would start easing credit access.”Secure your nest with Palm State Mortgage

Likewise, many smaller lenders which weren’t penalized have begun allowing Boomerang Buyers to attain home loans.

Palm State Mortgage is foreseeing a surge in the home mortgage industry due to these survivors.

Although, we saw “Originations for home purchases declined 13% last year to $638 billion,” we are also seeing a changing trend in recent months:

“Anthony Hsieh, chief executive of loanDepot LLC, one of the biggest FHA lenders, said that one out of four of the company’s current FHA borrowers has had either a foreclosure or bankruptcy in the last seven years.”

What To Know:  Foreclosure, Mortgages and FICO

FICO credit goes from 300 to 850.  You probably already know that most mortgage lenders desire a 620 to 660 score to approve applicants.

“Some 12% of the people—or about 109,000—who had foreclosure proceedings tacked onto their credit reports between October 2007 and October 2008 had a FICO credit score of at least 680 by October 2014.”

That number means that a lot of families worked very hard over a number of years to re-build their financial profiles.

They have kept meticulously current with payments in other financial situations and they have earned the right to enter the mortgage market in good standing again.

As Palm State Mortgage Company said in Part I, we welcome financially stable Boomerang Buyers who survived foreclosure to the world of house hunting and home mortgage buying.  We have the resources to help you find the perfect mortgage situation with a good lender and the best possible fees in the happy climate of our improving economy.