Millions of Spenders Are Ready to Come Back From the Mortgage Crisis

THE BLOOMBERG REPORT

The article, Millions of Spenders Are Ready to Come Back From the Mortgage Crisis, from www.bloomberg.com, reports that the number of people joining the rolls of those knocked from homeownership peaked seven years ago, so those blotches to their histories are starting to roll off the books right about now. The resulting improvement in credit scores means more Americans will find themselves with the ability and means to once again apply for loans, and not just for home purchases. “Improving credit scores might entice households to start borrowing more in general,” said Ralph McLaughlin, chief economist at real estate search engine Trulia. And what better time than now, when interest rates are so low. Negative events such as short sales, when a home is sold for less than what’s owed on it, and foreclosures generally roll off a person’s credit report after seven years, according to the three major providers of consumer credit scores and reports: Experian Plc, Equifax Inc. and TransUnion. With that anniversary fast approaching, better access to credit may be on the way for many. The obvious effect will be in stronger demand for homes, which may also translate into higher spending on durable goods such as appliances and furnishings, said Oubina. Consumers may also feel more comfortable applying for new credit cards, auto loans or other types of debt. A TransUnion study last year estimated that of the approximately 7 million consumers who were negatively impacted as the housing bubble burst -– including those who were either severely delinquent on their mortgages, negotiated a short sale or went into foreclosure — only 1.2 million had recovered enough by December 2014 to meet Fannie Mae selling guidelines. Based on their credit histories, the agency estimated that 2.2 million more could meet those criteria through 2019.

Here is the link to the entire article: http://www.bloomberg.com/news/articles/2016-07-07/america-s-post-foreclosure-consumers-are-ready-to-rejoin-economy