Long after the global financial crisis subsides and the U.S. economy is again creating jobs, many former homeowners may find it hard to convince lenders to give them the time of day.
Bankruptcies and foreclosures are leaving lasting scars on millions of borrowers’ credit reports, and many will be unable to obtain a mortgage for years to come. Even those who hang onto their homes are seeing their credit dinged after missing payments on their mortgage, car loan, or credit cards.
A heavy toll
According to data gathered by the HOPE NOW alliance of loan servicers, lenders started foreclosure proceedings on about 6.1 million homes from July 2007 through the end of 2009. During that time, loan servicers completed 2.2 million foreclosure sales (figures for the final month of 2009 are estimated).