Homeowners: once bitten, twice shy?
On behalf of Jamie L. Gingold, PC, GingoldBankruptcyLaw.com (Formerly practicing with Gingold & Gingold LLC) posted in Foreclosure on Wednesday, May 6, 2015.
Losing a home in foreclosure can be an extremely upsetting experience for any homeowner in Atlanta. Unfortunately, it is an experience that far too many people have had in the past decade thanks to the volatile housing market and troubling loan practices. Because of these factors, millions of people went through foreclosure in the past 10 years.
Now, economists and real estate professionals are worried that many of these same people will not return to the market, even when they are eligible and well-positioned to do so. In fact, the National Association of Realtors estimates that as many as two-thirds of people who lost their home in the last 10 years will not buy another house.
There are a few reasons for this estimate. To being with, going through foreclosure can be extraordinarily upsetting. Many people who have had to go through this experience would never want to go through it again, so they feel it’s safer to just never buy another house.
Another reason that people who have lost a previous home may not buy again stems from the extremely rigid standards in regards to lending, meaning that they may not qualify for a loan. Finally, because foreclosure can do such serious damage to a person’s credit score, it can take several years before a person can rebuild their credit up to a satisfactory level to make them eligible for a mortgage. By that time, a person may no longer be interested in purchasing a home and instead choose less permanent housing options.
It certainly makes sense that people want to be more cautious when it comes to spending and taking out loans after they have gone through a process as complicated and frustrating as a foreclosure. However, there are ways to avoid foreclosure in the future that can prove to allay some homeowners’ concerns. Reviewing financial obligations, debt relief options as well as loan documents with an attorney can help people understand what they need to do to protect themselves, their homes and their financial future.
Source: The Wall Street Journal, “Many Who Lost Homes to Foreclosure in Last Decade Won’t Return — NAR,” Laura Kusisto, April 20, 2015
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