COSTA MESA, Calif. – Oct. 28, 2016 – With the economy rebounding and the average national credit score on the rise, many consumers are coming back from harder times, dusting themselves off and re-entering the mortgage market.
Foreclosures, short sales and bankruptcies remain on a credit report for seven years, which means those black marks will fall off the credit files of 2.5 million consumers between June 2016 and June 2017. And most will then qualify for another mortgage.
Experian's latest analysis finds that 68 percent of these rebounding consumers are scoring in the near-prime-or-higher credit segments.
The study takes a close look at these potential borrowers and the consumers who foreclosed or short-sold between 2007 and 2010 and have since opened a new mortgage. According to Experian, these "boomerang borrowers" generally show responsible credit behaviors, have improving credit scores and are current on their debts. Overall, the short-sale ex-owners are rebounding at a higher rate than those who went through foreclosure.
"With millions of borrowers potentially coming back into the housing market, the trends that we're seeing are promising for both the mortgage seeker and the lender," says Michele Raneri, vice president of analytics and new business development at Experian.
"In the coming years, boomerang borrowers will be a critical segment of the real estate market," Raneri predicts. "While many of these borrowers have gone through a very difficult time, it is encouraging to see them taking control of their finances with better credit scores and all-around better credit management."
The VantageScore credit scores of the boomerang buyers have climbed significantly since their foreclosures and short sales, even surpassing the scores they had prior to the negative event:
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Original Article Found: http://www.floridarealtors.org/NewsAndEvents/article.cfm?p=3&id=344425
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