Some of the thousands of area homeowners who lost their houses during the foreclosure crisis have started to return as homebuyers.
They're being drawn back by prices that can be half what they paid in the boom and interest rates near record lows.
These so-called rebound buyers are the first of what's expected to become a wave of former homeowners re-entering the market in coming years.
The first few trickling back are those who lost their houses early in the real estate bust, in 2007 or 2008, giving them time to repair their finances and buy under today's much more favorable conditions.
"This is the leading edge you're seeing right now," said John Hughes, a broker with Guidant Realty in Rocklin who has helped a number of foreclosed homeowners buy new houses.
Among them is Paresh Patel, a mortgage executive who went through a bankruptcy and foreclosure during the housing crash.
Patel and his wife owed $529,000 on a house they bought during the boom years. But its value fell to less than $399,000 even as Patel's income dried up.
Major state and federal programs to help homeowners hadn't kicked in yet, and there was little they could do in terms of refinancing or lowering their payments.
"We had to just walk away," Patel said.
The bank foreclosed in 2008.
For three years the couple rented and cut back on expenses packing lunches and eliminating car payments Patel said.
Then, in the summer of 2011, they closed on a new 2,700-square-foot house in Rocklin for $330,000. It was nearly three years to the day after their foreclosure.
The timing was no accident. Three years is the minimum time it takes for foreclosed homeowners to qualify for a loan backed by the Federal Housing Administration.
With the FHA loan they needed just a 3.5 percent down payment and were able to take advantage of government incentives to buy a newly built home, complete with rooftop solar panels, Patel said.
They used only $3,000 of their own money, and their mortgage payment of $1,400 a month is $300 less than what they had been paying in rent for a smaller home, he said. They even built up equity this year as home prices rose.
"It was actually a really good transaction," Patel said.
John Easterbrook, a mortgage banker in Fair Oaks, said the Patels' experience is similar to that of others he's worked with.
Many think they have to wait years until a foreclosure is off their record and they can buy a new house, he said. But buyers can qualify for an FHA loan three years after foreclosure, and some can get a VA loan after only two years, he said. For conventional loans, the waiting period is usually seven years.
Another factor, he said, is that some families who have been through the trauma of foreclosure often in combination with a bankruptcy have wiped out a lot of debt in the process.
They tend to spend less, borrow little and save more, putting them in a better financial position.
"You really lay low, and you typically pay mostly in cash," Easterbrook said. "Many borrowers who have been through that have been very frugal over the last couple years."
Timing is another key.
University of the Pacific economist Jeffrey Michael said those who lost their homes to foreclosure early on are luckier in some ways. They may now have the chance to buy again, whereas those who stayed and kept making payments could end up missing out on the lowest rates and prices.
So far, only a small portion of those caught up in the housing crisis have been able to make comebacks, but Michael said more displaced homeowners may start entering the market next year, with the numbers increasing in following years.
Many aren't soured on homeownership, he said. They enjoyed owning their own homes. They just got burned by high prices and big, exotic mortgages.
"It was the mortgage that was toxic, not the house," Michael said.
Now if those same buyers can find a new home "without the burden of an unsustainable mortgage, it would be a different transaction," he said.
Even for those whose credit has been repaired, getting a loan with today's tight underwriting standards remains a hurdle, Michael said.
The lack of housing inventory is another problem. With investors and first-time buyers competing for homes in the lower price brackets and very few houses for sale "good luck finding a competitively priced existing home," Michael said.