Foreclosed Home Owners may get “Second Chance”

The Federal Housing Administration is giving some former home owners another shot at home ownership. The FHA sent a letter to mortgage lenders stating that it would offer mortgage insurance to borrowers who once filed for bankruptcy, or who lost their homes through foreclosure or short sale during the recession.

Still, potential borrowers must show they can meet all other FHA requirements and that they are no longer financially constrained. Borrowers also will have to undergo housing counseling and FHA is requiring lenders to verify that at least a year has passed since the foreclosure or “economic event” that caused the foreclosure or bankruptcy.

“FHA recognizes the hardships faced by these borrowers, and realizes that their credit histories may not fully reflect their true ability or propensity to repay a mortgage,” according to the letter FHA sent to lenders.

Source: “FHA offers mortgage backing to the once bankrupt,” HousingWire (8/16/2013)

Foreclosures Contribute to Rental Boom

Foreclosed home owners are contributing to a boom in the rental market. Nearly half of property managers recently surveyed — or 47 percent — say they’re seeing an increase in applicants moving to rental units from foreclosed properties.

But foreclosed home owners may not find big deals in the rental market. As vacancies shrink, many property managers say they have increased prices on their rental units in the last year, according to a new survey of 1,252 property managers across the country by TransUnion, which provides rental screening solutions to both large property management companies and independent landlords.

“The majority of respondents said that they are not having problems finding residents even with the increases,” says Mike Mauseth, vice president in TransUnion’s rental screening business unit.

Rentals are in high demand: Nearly 90 percent of survey respondents report having a 10 percent or less vacancy rate.

Despite the boom in the rental market, property managers say that “finding reliable tenants at an optimal price point is paramount for this industry,” Mauseth says. “A reliable tenant ensures property managers are both solvent and profitable. Conversely, an unreliable tenant can cost property managers thousands of dollars in lost rent and property damages.”

Source: “TransUnion National Rental Survey Finds Large Property Managers Able to Raise Rates and Attract Reliable Tenants,” TransUnion (June 24, 2011) 

Other articles relating to the Sacramento and Placerville, California regions at: www.sierraproperties.com

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