From the SD Union-Tribune:
http://www.utsandiego.com/news/2015/jun/05/foreclosure-shortsale-boomerang-buyers-real-estate/?
An excerpt:
When Chad Sanfillipo got the keys to his house in Ramona last year, he had come full circle in the real estate market.
After losing his home to a short sale during the crash of the housing market, Sanfillipo was once again an owner.
“It felt so exciting to be able to buy again, to have something I own,” said Sanfillipo, 45, who rented for a couple of years before a bank would lend him money again. “There’s no landlord or rent check. I get to say what I get to do with my house.”
Sanfillipo, a systems engineer, is one of roughly 116,000 San Diego County residents who had either a short sale or foreclosure between 2006 and 2014, before and after the Great Recession, according to CoreLogic, a real estate data company.
The good news for Sanfillipo and others who lost their homes during the downturn is that there’s ultimately forgiveness in the lending market. Each month, thousands of San Diegans who went through short sales or foreclosures are completing waiting periods that render them eligible to once again apply for government-backed loans. In the worst case, some must wait seven years, but others can get new loans in just one, depending on whether they go through the Department of Veterans Affairs, Federal Housing Administration, Fannie Mae or Freddie Mac.
People who lost their homes during the recession but own again are called boomerang buyers, and they’re becoming a larger part of the market.
Boomerang buying is becoming a nationwide movement. The National Association of Realtors says that 9.3 million homeowners underwent foreclosures between 2006 and 2014. Already, 1 million of them purchased homes again, and an additional 1.5 million will become eligible over the next five years.
http://www.utsandiego.com/news/2015/jun/05/foreclosure-shortsale-boomerang-buyers-real-estate/?
And my full-circle RE story, JtR: Apologies for length but I will share in two consecutive posts if it’s OK with you.
1. Next-door neighbor bought home in AZ for $250K during housing downturn. Value plummeted to $60K and he walked away. Bank foreclosed. Less than 3 years later-in early 2013, he moved to different state and is sub for local builder That builder built the guy and his family (3 kids, wife and other relative) a 3,000sf+ home + 700sf garage for cost + 10% ($297K+).
Yet, because of new Fannie Mae regulations enacted after the housing crash, someone named “Susie” and:
1. 27+ years of stellar credit history (Four mortgages, two car loans, and everything paid in full and on time, never paid interest on any credit card, and a FICO in the”perfect range”.
I’ve been pre-approved for the biggest mortgage in my life (Doubt I will use entire amount as I may build or buy an existing home):
A. Due to Fannie Mae new regulations, I need to put 25% down payment on new mortgage to get premium rate of 4% fixed for 30-years.ONLY because I am retired and my assets are investments w/ monthly income derived from social security and dividends. Since one of my kids graduated from a stellar CA college back in 2012, I’m able to comfortably live on that income without touching any of my investments.
This loan will be serviced by my favorite CU that I’ve been with for more than 4 years since moving from my beloved CA (I was born there). It will never be sold.
*Continued in next post*
*CONTINUED* Or:
B. 20% down payment–again with favorite CU, but because of “risk” (since they hold it on their books), the 30-year fixed loan will be 1/2% higher. Right now, that equals 4.5%.
C. My credit union has a new exclusive ARM product. I’ve never had one before as we always went traditional 30-year fixed and always 20% DP. 2.99% fixed for 5 years, and no refinancing fees. 2% cap in interest rate every 5 years. Most it can go up (Year 5: 4.99%); (Year 10: 6.99%) and (Year 15: 7.99%).
Certainly getting more info on Monday: 2.99% rate, always serviced by them, and $2,400 origination fee on closing costs waived. If I choose this, I will throw every available penny @ the 2.99% rate for a minimum of 5 years.
Q: Why do friends wonder why I’m a tad grumpy lately? Lack of sleep, for sure, but the real reason is I think I have become the poster child for the Twilight Zone of the new real estate regulations in America today where irresponsibility is rewarded and responsibility of decades is not…
Thanks for listening, beloved bubbleinfo community:
Very interesting, Susie! How much grief is the credit union giving you to qualify, compared to an average bank? The process with my bank is beyond insane. They screw up paperwork, and the process has to begin again. It’s as if they don’t really want to go through with it…
@daytrip
No grief–except for one CU lady who use to work for (evil) Wells Fargo. She’s a CU mortgage loan officer, and it was like the Twilight Zone sitting in her office for a four-minute meeting. She told me “new regulations” meant I had too much debt-to-income which is only my mortgage. I doubt she really looked at my assets/retirement accounts either. But once I got in touch w/ a new mortgage guy at the same CU, everything changed. He said she was “not accurate” in her assessment of my situation.
I’ll be honest, I was not at my best when I left her office. I’m now a widow but exclaimed: “We’ve been responsible our whole lives, but this is f’ing crazy!” I then abruptly left her office, as she stood behind her desk apologizing. As I drove home I was so upset, I had tears in my eyes. Once home, I immediately called JtR.
Yes, I felt bad how I exited that meeting so I went back to my CU a week later. The lady happened to be w/ another client so I wrote her a note of apology for my choice of words. I also told her that I had been pre-approved and for what amount by a mortgage guy who worked at the CU’s downtown branch.
Update: So today I’m going back to the CU to find out more about their exclusive 2.99% ARM product. I had called a favorite ex-branch manager–who now oversees all of the CU branches. He took the time to explain more about ARM. It’s a relief that there wouldn’t be any refinancing costs in 5 years when the rate re-adjusts. With a 2.99% rate for 60 months, I can really throw some $ at lowering the mortgage amount owed.
IMO, banks have become too big to fail, and also too-big to care. That’s why I’m working with my CU who’ve I’ve had a stellar relationship with for 4+ years. Bonus: all the tellers know my name when I come in.
Daytrip, if your bank is inept during the mortgage process, ask yourself this Q: What will they be like servicing your loan? I would encourage you to look for a local credit union instead as they usually have lower mortgage rates and much better customer service. Mine certainly does.
So what have I learned in the last month during this real estate adventure?
1. “You can’t call it an adventure unless something goes wrong.”
2. I’m still not happy about “new regulations” on 25% DP for investment/retirement account assets, but alas, it is what it is.
3. JtR is absolutely right: Get good help! Even though this is my 5th time, selling a present home and buying in today’s environment–whether an existing home, new construction or building–is NOT for the faint of heart. I only wish Jim was allowed to work in the state I reside in now. Why anyone would choose any other agent in NSDC is beyond me.
Thanks Susie!
We’d like to follow your ‘adventure’ with building a new house!
Hi Jim!
I’ll let you know what transpires. Lots to ponder today. I found a gorgeous existing home but it’s a bit too much in price and square footage for me. May look at a few lots today. Later this week, I have a meeting scheduled w/ a very respected builder to talk about specifics. Will talk to a couple other builders too.
If I ever make an offer on the existing home, and it’s not accepted, I’ll just have the builder of that home build me the same floor plan with less SF and certain updates that I don’t care about.
I love real estate! *Grin* If there is such a thing as reincarnation, I’ll either come back as a RE flipper or maybe I can get a job with the extraordinary Klinge Realty’s newest phenom, Kayla…