Credit tracker TransUnion estimates that 700,000 homeowners whose credit was scarred by missed payments, foreclosures or other negative events during the financial crisis could re-enter the mortgage market this year.
The number of these "boomerang buyers" will increase, TransUnion said, with potentially 2.2 million borrowers, previously shut out of the housing markets, able to apply for home loans over the next five years.
Other analysts and industry players said tight lending standards imposed by many lenders after the mortgage meltdown -- tougher than those dictated by big mortgage financiers
For whatever reason, fewer than half of consumers whose credit has recovered from damage during the crisis have become homeowners again, TransUnion said in its report, to be released Wednesday.
"As boomerang buyers … 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," said Joe Mellman, TransUnion's vice president for mortgages.
TransUnion said its study analyzed the credit ups and downs of 180 million consumers between 2006 and 2014.
Consumers recovering from negative impacts during the financial crisis were defined by TransUnion as being 60 or more days delinquent on a mortgage loan, having a mortgage loan modification or having lost a mortgage through foreclosure or short sale.
Mellman noted that penalties for derogatory items vary. For example, four years must pass after a short sale and seven after a foreclosure before consumers can re-apply for conventional home loans.