Millions of former homeowners experienced a foreclosure or shortsale over the last 9 years. Eventually these borrowers will return to the housing market. Participants in the 4th quarter Survey of Mortgage originators survey were asked if there was a change in volume of formerly distressed sellers seeking mortgage credit. Relative to 2013, half of respondents indicated an increase in potential return buyers seeking credit.
This result suggests a continuation of the growing trend of return buyers. Over the 12-month period from July of 2013 to June of 2014, 8% of home buyers were previously distressed sellers. This share was an increase from 6% in the prior period.