During the housing crisis back in 2009, a record-breaking number of Americans lost their homes to foreclosure. The Federal Reserve Bank of New York reported that the number of consumers with a new foreclosure peaked at about 566,000 in the second quarter of 2009. According to the three major consumer credit report providers, Experian Plc, Equinox Inc. and TransUnion, foreclosures and short sales typically roll off a person’s credit report after seven years. Therefore, those who were affected by the housing crisis are finally getting a clean slate this year.
What Do These Numbers Mean?
These improving credit scores mean that a new influx of people will now once again have the ability to apply for loans. In addition to home purchases, these consumers may be incentivized to borrow more in general, which could be a big boost for the US economy. With better access to credit, there may be more applicants for credit cards, auto loans, or other types of debt that would stimulate consumer spending.
Still, a study by TransUnion last year estimated that about 2.2 million Americans experienced an even more severe impact from the housing crisis that could remain on their credit report through 2019. This is because many people who experienced foreclosure not only lost their homes, but also struggled to pay their other bills. As a result, these people took a larger hit to their credit score, which may stay on their record for a longer time.
Just because the housing crisis is over, it doesn’t mean that foreclosures are a thing of the past. Many Americans still find themselves in overwhelming debt that can lead to financial trouble. If you are struggling to make mortgage payments, a Miami foreclosure defense attorney can help. Call the expert team at Graham Legal today to have all of your foreclosure questions answered.