Study: Foreclosed Homeowners Shun Mortgages for Renting
Losing a home to foreclosure has left such a bad taste with some former homeowners that they have lost much of their will and desire to go through the underwriting process to get approved for a new home loan — even though years may have gone by since the foreclosure episode.
“I’ve seen people spend five or six months working with a mortgage officer only to be denied a loan. They are tired. You can see it on their faces,” said Dan Sullivan, a foreclosure prevention specialist at Action Housing, Downtown. “They find a comfort zone in renting.
“Once the shock of the foreclosure and the move is over, they feel at ease with their current situation,” he said. “They are happy with their landlords, and renting allows more freedom and less stress for them. I had one client say to me, ‘I’ll never own a rake again.’”
Data released Monday by the Urban Institute’s Housing Finance Policy Center based in Washington, D.C., suggest that the country is still digging its way out of the housing crash and that people who lost homes to foreclosure are still licking their wounds.
The center found 19 million renters now were at one point homeowners in the past 16 years. Additionally, 96 million renters have not had a mortgage in the past 16 years.