Millions of former homeowners experienced a foreclosure or shortsale over the last 9 years.  Eventually these borrowers will return to the housing market.  Participants in the 4th quarter Survey of Mortgage originators survey were asked if there was a change in volume of formerly distressed sellers seeking mortgage credit.  Relative to 2013, half of respondents indicated an increase in potential return buyers seeking credit.

FHA and GSEs

 This result suggests a continuation of the growing trend of return buyers.  Over the 12-month period from July of 2013 to June of 2014, 8% of home buyers were previously distressed sellers.  This share was an increase from 6% in the prior period.