It has been over seven years since the beginning of the mortgage crisis! While many were once hit by such derogatory items as foreclosures and short sales, preventing them from easily qualifying for a mortgage, they’re now going to start seeing the negative impact of these items to subside and credit scores to once again rise.
In fact, in between the end of 2006 mortgage bubble and the end of 2009 Burst, 39 million consumers dropped at least one credit score tier. However, as derogatory items are diminishing and consumers are making smarter and more responsible financial decisions, credit scores are increasing and consumers are becoming less of a financial risk. As of 2014, 16 million have recovered to reach their initial tier and 7 million have moved into a prime or better credit score category.
The question remains though, when will lenders re-engage with consumers who have had credit challenges? It’s anticipated that in the next three years, 1.5 million consumers can re-enter the housing market as they become mortgage-eligible. Yet, consumers may not immediately do so if they’re not aware that they’re eligible again and/or they’re stressed based on previous experiences.
All the more important to really promote credit education programs and mortgage eligibility options to consumers to help ease the transition into home ownership again.