Valley residents recover from foreclosure to buy houses again

The Fresno BeeJanuary 26, 2013 

Valley residents who lost their houses in the housing bust are buying homes again -- and more are expected to join them.

Despite fears that they couldn't buy a house again for seven years after a foreclosure or short sale, some families are back in the market after just three years.

For those residents, it was a matter of living frugally to repair their credit and save for a down payment in a market where houses cost half of what they went for six years ago.

"What seemed impossible for us and what we thought was going to be a seven-year wait was really three years," said Clovis homeowner Alexsandra Aceves, who lost her Valencia house to foreclosure in 2009.

"It was a blessing that we find ourselves homeowners today," she said.

Aceves is among the first of what housing experts say will be a steady stream of people re-entering the home-buying market this year after experiencing a foreclosure or short sale through 2009, when foreclosures hit their peak.

While no one appears to collect data on how many people are buying after foreclosure, lenders and real estate agents say they are seeing more such people coming through their doors.

Their desire to become homeowners again is aided by cheap home prices and low mortgage interest rates, experts say.

Homeowners can qualify for a mortgage loan backed by the Federal Housing Administration in as little as three years after a foreclosure, said Lisa Sasaki, sales manager for Academy Mortgage in Fresno.

All a homeowner has to do is pay down their debt and keep up with the payments on credit cards and car loans, she said.

A foreclosure is not, " 'Oh my gosh, it's the end of the world,' " Sasaki said. "If they maintain their credit, everything will be fine so when that three-year period is up they can buy a home. It's not impossible."

A new start in Clovis

The Aceves family heard horror stories about life after foreclosure, including a long wait before they could buy another home. Other fears also got the best of them, such as whether it was a good idea to start over with a 30-year mortgage at their ages, their late 40s and 50s.

But the road back to homeownership was easier than they thought.

In 2004, Aceves and her husband, Salvador, bought a four-bedroom, two-bathroom home in Valencia for $450,000. Five years later, Salvador Aceves -- the family's breadwinner -- lost his job as a pressroom foreman at a local newspaper and the family no longer could make the monthly mortgage payments.

After months of unsuccessfully trying to get help from their lender, the Aceves family walked away from their home and rented an apartment nearby. They returned to the house regularly for six months to cut the lawn and to make sure the house was in a good condition for the bank when it finally took over, Alexsandra said.

When money got really tight, the couple moved their family to Clovis, where Alexsandra Aceves has family and where the cost of living was less. Alexsandra Aceves got a job in human resources and Salvador Aceves found a job in heating, ventilation and air conditioning.

For three years, the couple and their four children lived in a two-bedroom apartment. They drove their smaller, economical car more often than their gas-guzzling sport utility vehicle and cut back on entertainment and restaurant outings.

Last year, the Aceves contacted a Realtor to look at what the housing market had to offer. They found out they had to wait only six more months before they could qualify to buy again -- three years to the date of their foreclosure.

In May, the couple bought a three-bedroom, two-bathroom house in Clovis for $150,000.

"It is smaller than what I had before, but it's beautiful and it fits us," Alexsandra Aceves said. "You don't look for the luxury things anymore. You look for a house that's going to fit you and where the price point is right so that when we're older, it's still feasible for us to make the payments."

Have a plan

The key to buying a home again after losing one is to have a plan, said their real estate agent, Lysha Payseno of Keller Williams, who is working with other clients in the same situation.

"The first thing I say is, 'Let's get in front of a lender and let's see what the game plan is,' " Payseno said. "It's better to get on track and know what you have to do."

Lenders are looking at three criteria before they approve a loan: credit, work history and debt.

"Credit heals with time and responsible decision making," said Elias Del Gado, a loan officer with First Cal Mortgage in Fresno.

Rebound buyers are considered first-time homebuyers, which allows them to qualify for an FHA loan that requires a credit score of about 620, a 3.5% down payment, and can be obtained after only a three-year wait, Del Gado said.

A conventional loan, which requires a 20% down payment, has a seven-year wait period after a foreclosure, he said.

Lenders also make sure that a buyer has been working for two years and has little debt.

In Visalia, a green light

For Brian and Eileen Johnson of Visalia, buying a house again was just a matter of waiting.

The Johnsons moved from South Dakota to Visalia in 2005 and bought a three-bedroom home for $305,000. In 2009, Eileen Johnson lost her teaching job, making it difficult for the couple to keep up with the nearly $2,000 monthly mortgage payment.

They sold their home in a short sale -- for less than they owed the lender -- and then rented an apartment for a year before renting a house.

Brian Johnson said they met with a real estate agent two years after their short sale to see how soon they could buy again. They were told to wait one more year.

"We just waited until the green light was back on and we could resubmit" an offer on a house, Johnson said.

In December, they closed on a 1,600-square-foot, three-bedroom home on a cul-de-sac close to the church where Johnson is a pastor. The cost: about $150,000.

"With the interest rates being at 3.25%, we were crazy not to buy," Johnson said.

The reporter can be reached at (559)441-6495, blee@fresnobee.com or @bonhialee on Twitter.

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