A foreclosure might mean you have lost ownership of your first home, but that does not mean the end of it all. While going through a short sale or foreclosure can ruin your credit, reports state that it is still possible to bounce back and buy a new home despite this record. What kinds of instances make it easier for buyers to get a new home after foreclosure?
Foreclosure takes place when a homeowner defaults on his or her payments and the lender gets all the rights to take the property back. Such instance was prevalent during the financial crisis, wherein a lot of homeowners lost their homes because they were unable to pay the monthly mortgage.
While it can truly be disheartening to apply for a new mortgage once again after failing at the first try, Realtor.com notes that certain instances can still allow buyers to bounce back after foreclosure. The publication states that interested buyers must prove to the lenders that they went through an unforeseen circumstance.
Circumstances such as death, divorce or job loss can be stated as the reason for defaulting on your monthly mortgage payments, which eventually resulted in foreclosure. The publication notes that as long as you can prove to the bank or lender that the situation was beyond your control and hopefully, they will be able to look into your case deeper and see if you qualify for a mortgage again.
The Wall Street Journal notes, however, that several hurdles still remain in place for those who underwent foreclosures in the past. According to the publication, several lenders are still wary of taking in applications from homeowners with a previous record of short sale or foreclosure.
"I'll ask, 'You don't even want to try to explain the special circumstances?' and they say no, they won't do anything with it," recounted Mr. Gerry Duva.
Duva shared that he lost his home in a short sale in 2013 after losing his job. Duva admitted that he has already tried applying for a mortgage with six lenders, but all six were not interested in hearing him out.
