By Les Christie @CNNMoney
Borrowers who lost homes to foreclosure during the housing bust are starting to buy again.
Since the housing bubble burst, 4.8 million borrowers have lost their homes to foreclosure, and another 2.2 million gave them up in short sales, according to RealtyTrac. While many are still struggling to recover financially, a growing number are starting to bounce back — and they are looking for a new place to call home.
Susan Edwards and her husband, Dave, lost their Palmdale, Calif., home in 2010 after Susan’s severe arthritis made it impossible for her to work her medical device sales job.
The medical bills soon piled up and the couple could no longer afford their $2,300 monthly mortgage payment. In addition, their home’s value had plunged 40% below the $325,000 mortgage balance.
“We were living under such pressure,” she said. “We looked at the numbers and knew we had to default.”
After the foreclosure, Susan’s credit score had taken a 70-point hit; Dave’s score fell even further.
By paying all of the bills on time, they nursed their credit scores back to health. And in December, two years after they lost their old home, the couple was able to buy a new homewith a loan backed by the Veteran’s Administration. VA-insured loans can be obtained just two years after a foreclosure, according to the Mike Frueh, director of the VA’s Loan Guaranty Program.continue reading »