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1.5 Million Homeowners Could Re-Enter Housing Market in Next 3 Years

According to a new study from TransUnion, more than 1.5 million homebuyers negatively impacted by the financial crisis could potentially re-enter the mortgage market in the next three years. This population of consumers negatively impacted by the financial crisis – commonly known as boomerang buyers – was defined by TransUnion as being 60+ days delinquent on a mortgage loan, having lost a mortgage through foreclosure, short sale or other non-satisfactory closure, or having a mortgage loan modification.

coupleTransUnion’s study found that approximately 700,000 boomerang buyers might be able to re-enter the housing market in 2015. Over the next five years, TransUnion anticipates 2.2 million boomerang buyers could re-enter the market.

The study analyzed the overall U.S. credit-active population at the end of 2006 (the end of the mortgage Bubble), the end of 2009 (the end of the Burst) and in 2014 to determine consumers’ ability to re-enter the mortgage market.

“Based on our study findings, the Burst had a significant and dramatic impact on many consumers’ ability to re-enter the mortgage market after suffering through the downturn,” says Joe Mellman, vice president and head of TransUnion’s mortgage group. “It’s been over seven years since the beginning of the mortgage crisis; this is significant because many derogatory items, such as foreclosures and short sales can prevent consumers from qualifying for a new mortgage for a period of time. As consumers responsibly manage their credit and pass these milestones, we anticipate a tide of newly mortgage-eligible consumers entering the market.”

TransUnion analyzed every consumer it could track between 2006 and 2014, which came to 180 million consumers. During the mortgage Bubble in 2006, 43 percent of that population, or 78 million consumers, had a mortgage. 42 percent of the recovered consumers currently have a mortgage, while 58 percent of the recovered consumers have not yet re-entered the mortgage market.

“As boomerang buyers who experienced foreclosures or other negative impacts become eligible to re-enter the mortgage market, they may not immediately do so if they are not aware they are eligible again, or feel daunted by their prior experience,” Mellman says. “Lenders can help consumers ease this transition with credit education programs addressing consumer eligibility, and help them better understand their borrowing options.”


Credit Score Impact

The study also looked at how big of an impact the mortgage crisis had on consumer credit scores. Between the Bubble and the Burst, 39 million consumers dropped at least one credit score tier. As of 2014, 16 million of these consumers had recovered sufficiently to reach at least the risk tier they were in before the Burst.

Despite the significant impact on consumer credit scores, a marked improvement in scores has also been observed for certain credit score risk tiers. The study found that 7 million more consumers have moved into prime or better risk categories (VantageScore® 3.0 credit score of 661 and above) between the Burst in 2009 and the close of 2014. Additionally, 8 million consumers left the subprime risk tier (VantageScore® 3.0 credit score of 600 or below) to enter higher risk tiers during the same timeframe.

“An important question lenders face is when to re-engage with consumers who have been challenged managing credit in the past. Despite the negative impact of the mortgage crisis on many consumers, we’re seeing promising recovery as consumers shift to lower risk tiers,” says Ezra Becker, vice president of research and consulting in TransUnion’s financial services business unit. While some lenders may be hesitant to offer loans to these impacted consumers, our data show these consumers are becoming better credit risks. Our study puts a framework around the re-engagement question relative to the mortgage crisis, and that’s good news for both lenders and consumers alike.”

 

For more information about the study, visit www.transunioninsights.com/boomerang.

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Putting Off Procrastination in 5 Easy Steps

By Rebecca Chandler

online-surveysWe all procrastinate from time to time.  We start a project and then get distracted by an email, a social media post, or an off-topic conversation.  It happens.   You may be doing it now.

Most of the time, we put off things because they seem overwhelming.  Solving a complex problem at work.  Preparing a home to go on the market.   Writing a blog post on procrastination. 😉  But these tasks are often a piece of a bigger goal and by putting them off, we delay accomplishing the larger objective.  Here are some strategies that may help you tackle procrastination and advance your goals.

  1. Make an audacious, big, big goal that will inspire you. For example, someone who wants to sell their home may have to paint, clean out closets, make minor repairs, and stage their home for showings.  None of these sound particularly enjoyable.  However, if the big, audacious goal is to move into a beautiful new home, embrace a simpler lifestyle, or relocate to a new exciting area, keeping that big goal in mind will make painting and cleaning out clutter more tolerable.  Each paint stroke or organized closet is a step toward that bigger goal.
  2. Break the work into smaller, easily completed steps. Write them down. Sometimes the reason we procrastinate is because the tasks ahead of us seem overwhelming. “There is so much to do to prepare my home for sale, I don’t know where to start.”   Start by making a list of the tasks to be completed, and then break those tasks down even further.

Cleaning out all closets, drawers and storage areas – (a big task)

  • Get boxes for carting donations to charity.
  • Get trash bags for garbage.
  • Create a staging area where to pile donations.
  • Take one room at a time. Complete one before moving on to the next.
  • Drop off donations on way to other errands.
  • Call waste management vendor and schedule a special pickup for larger items.

By breaking a larger task down into smaller ones, they don’t seem so overwhelming.  Picking up boxes and trash bags are steps that can be accomplished in a few minutes, not hours.   Clearing some floor space in the garage to pile the donations will not take all day.  Start with one room (or one closet or drawer). You can make major progress in a short amount of time.

  1. Allocate time for work and time for play. Mark Twain said “Eat a live frog first thing in the morning and nothing worse will happen to you the rest of the day,”  suggesting you face the most unpleasant tasks first.   Do you really want to eat a live frog for breakfast?  I don’t.  I’m not a morning person and no amount of coffee is going to make me productive at 6 a.m.  But, you probably know the time of day in which you are most productive.  Block out time on your calendar, uninterrupted, to devote to your “live frog.”  Treat it like an important meeting and don’t reschedule it.   Michael McDevitt, Cofounder and CEO of Tandem Legal Group, wrote in his article, “For Entrepreneurial Success, Eat A Live Frog Every Morning”, that he devotes 2 hours per day to tackling his unpleasant to-do list (although not first thing in the morning).  During those 2 hours, everything else can wait.

Conversely, block out time in which you are not going to work.  Saturday afternoon, watch the football game with friends.  Tuesday, have lunch with a friend.  Giving yourself a break, without guilt, will give you a boost of motivation during your productive times.

  1. Set deadlines. Realistic deadlines.  If you know that you have nine closets, then cleaning out one per day during the week and four on the weekend will allow you to accomplish your goal in a week.   Split the work between two people and the time required is cut in half.  Seeing the end in sight makes the work less daunting.

 

  1. Check things off the list and reward your accomplishments. Finish cleaning out a closet?  Relax in a hot bath with a book or go for a walk in the park.  Finish cleaning out all your closets?  Go to a movie you’ve wanted to see.  Ending an unpleasant task with a pleasant one will keep you motivated.

In conclusion, don’t delay!  Try these steps today!

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3 Steps for WINNING Local Traffic to YOUR Website

By Rebecca Chandler

This is the second in a series of conversations around practical tips to building your personal brand locally.

happy trophyWinning a Google war with a listing aggregate site with 20 million or so unique users is probably a long shot, but you CAN win more local buyer and seller traffic to your website by following these 3 steps.

Step 1 – Start with a good website. What should that include?

  • An IDX feed that puts the entire MLS on your site. That way, home shoppers won’t need to shop other websites once they’ve gotten used to yours. All the data is there.
  • Make sure your website displays well on a tablet and a phone. More and more consumers are using their tablets and phones to shop for homes – especially on the weekends when they are out looking. If the visitor has to “pinch and stretch” the screen or can’t navigate the tiny buttons, even if they find your site, they will leave your site – forever.

Step 2 – Go to where your prospects are and connect with them, physically. No, I don’t mean a group hug. (Where was your mind?) Instead, make sure they bump into your web address, not just virtually, but on the real streets of your real town. Here’s how.

  • Look for the places your ideal prospect lives, eats, works, shops and plays. Look for opportunities to advertise to reach them in those places. Use local advertising, local real estate magazines, direct mail, open house flyers, yard signs. Take out an ad in the high school football program. Sponsor an event and get your name and web address in the program. Bus stops. Billboards. You get the picture. Go where they are. Physically.

Step 3 – Be bold. Use text codes. Big brands like AMC, Costco, Kohl’s, Office Depot, Sonic and others are now using text codes to drive traffic and reminders to their clients. They place specific codes around the stores and in their ad campaigns to drive traffic to their mobile sites and apps – and ultimately sales. How do you do it?

  • Use a service like LocalSmartMobile offered by The Real Estate Book® to assign a specific code to every listing. Put that code on all advertising for that listing with a strong call to action. “To see inside this home, text T312634 to 85377.” When the consumer does, they will receive a text with a link to that property – on YOUR website (and you get a text with their phone number so you can follow up right away).
  • Use GPS enabled yard signs with text codes. LocalSmartMobile includes a yard sign with the call to action – “Text HOMES to 85377.” When the consumer does, they get a link to that listing on YOUR website, and you get a text with their phone number – so you can follow up while they are standing in front of the home.
  • Use a vanity code (Try texting SUPER to 85377) to drive traffic to YOUR mobile business card and website. Consumers can save your contact information and then go to your website to search for homes.

Taking these 3 steps will help you win more local traffic – on the real streets of your real town.

Want to learn more? Click here to watch a 2 minute video or contact your local Real Estate Book representative.

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