After Foreclosure or Bankruptcy, More Americans Are Buying Homes Again

July 26, 2012 (Press-News.org) After Foreclosure or Bankruptcy, More Americans Are Buying Homes Again

A growing number of Americans are qualifying for home mortgages and re-entering the housing market just a few years after losing a previous home to foreclosure, Reuters reported recently. Many of these buyers lost their homes in the Great Recession, and some feel they are being given a second chance -- much sooner than they expected, in some cases.

Since 2007, there have been more than 4 million foreclosures in the US, and that number is expected to reach 6 million by 2014, according to RealtyTrac, a foreclosure tracking firm. Although there is no hard data available on the number of people purchasing homes after a recent foreclosure, bankruptcy or short sale, Reuters reported that its interviews with more than 30 consumers and professionals in the housing market suggest a growing trend.

With average home prices hovering around two-thirds what they were at their peak in 2006, many of today's homebuyers have found the silver lining of the same sluggish housing market that recently cost them their homes: an escape from rising rental costs, and affordable opportunity for a fresh start.

Rebuilding Credit After Bankruptcy or Foreclosure

In most cases, Reuters reported, the buyers who have had success obtaining a new mortgage after a recent bankruptcyor foreclosure are those who have worked hard to rebuild their credit scores. Bankruptcy itself is considered a negative credit event and will remain on a person's credit report for seven years. However, after filing for bankruptcy, consumers can start improving their credit score right away by reducing debt, paying bills on time and using credit wisely.

With time and dedication, this process creates a record of responsible money management that will demonstrate to potential lenders that the consumer can be trusted to repay a loan after a previous bankruptcy or foreclosure. Thus, despite the initial credit hit, bankruptcy can provide an opportunity to break the cycle of constant late payments and eroding credit scores that often accompany unmanageable debt. For more information about bankruptcy, and to discuss whether it might be right for you, discuss your situation with an experienced bankruptcy attorney.

Article provided by Alford & Bertrand, LLC
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