From the NYT:
New research from TransUnion, the credit information service, predicts that some 1.5 million homeowners who were forced out of the mortgage market after the housing bust will have recovered sufficiently to re-enter the market sometime between now and 2017.
But creditworthiness alone does not a buyer make. Other studies suggest that the fallout from the financial crisis is still a hindrance for many Americans, and that the national homeownership rate will continue to fall in coming years.
The TransUnion study, released on Wednesday, tracked the credit trajectory of the roughly seven million homeowners who had been “negatively impacted” by the economic downturn as of the end of 2009. That category includes homeowners who were at least 60 days delinquent on a mortgage, had lost a home to foreclosure or short sale, or had obtained a modification to a distressed loan.
Borrowers who suffer such a major credit event are usually ineligible for another loan backed by Fannie Mae, the Federal Housing Administration or other government entities until after waiting periods of two to seven years have passed.
TransUnion found that, as of the end of 2014, 1.2 million credit-weakened borrowers had recovered to a level at which they would meet Fannie Mae’s underwriting guidelines. This meant they had a minimum FICO score of 620 and no unpaid judgments or liens pending, and were beyond a required loan waiting period.
As for how many more borrowers are expected to recover in coming years, TransUnion predicts 700,000 this year, 300,000 in 2016, and a half million in 2017.
Compared with first-time buyers, this population “presumably has a higher desire and interest in getting a mortgage because they’ve had one before,” he noted.