The real estate market turndown of the past five or six years hit the industry hard, and as the market now moves into recovery, an overlooked segment of homeowners affected by it is also bouncing back. The so-called boomerang buyers, people whose mortgages were foreclosed upon during the dark days, are now re-entering the market, and this is good news for Elmhurst.

Natalie Lohrenz, director of development and counseling for the Credit Counseling Service, says that there are primarily two types of foreclosed homeowners: people who had a bad loan that they couldn’t afford; and people whose overall finances got pummeled. The first group couldn’t meet their mortgage obligations but were able to keep the rest of their finances in order and continued paying their bills. The second group, who most likely went through a divorce or job loss, ended up with nothing, and their credit scores suffered the most.

Boomerang buyers have different wait time requirements before they can expect to get back into homeownership – it depends upon their particular situations and the types of mortgages they had. For individuals who were foreclosed upon, the wait can be anywhere from one to seven years. If it was an FHA loan with extenuating circumstances, such as an illness or the death of a wage earner, the wait may be just one or two years. For individuals who had a Fannie Mae or Freddie Mac loan, the wait can be up to seven years.

For homeowners who went through short sales, the type of mortgage at the time of short sale is considered along with how much is available now for a down payment. For example, a short sale on a Fannie Mae or Freddie Mac loan with a current down payment of 20 percent requires only a two-year wait. After a short sale on an FHA loan, the wait is three years, but after a short sale on a Freddie Mae or Freddie Mac loan with a current down payment of less than 10 percent, count on waiting up to seven years.

In mid-February, the Orange County Register published a surprisingly uplifting story about an area homeowner who went through a short sale and is now not only getting back into the market, but has also salvaged her credit rating. You can read it here.

For up-to-date, accurate information about your real estate options, your best source is a professional realtor. Here at The Gracik Makinney Group, we’re committed to providing not only the best information, but also the best service possible. Stop by the office at 190 North York Street here in Elmhurst, or give us a call at 630-441-5570, and let’s talk about what choices are available to you.