About $5 billion worth of mortgages will be loaned out this year to those who have recently been through foreclosure, short sale or bankruptcy according to the Wall Street Journal.

Smaller, non-bank Lenders have moved into this market because they claim that many people in these situations are still credit worthy. These lenders claim they are looking for several things to determine if the borrower is eligible for a mortgage.

1. Enough income to pay the monthly payments on the mortgage.
2. Cash for a high down payment, often 25% or more.
3. Are the potential borrowers paying their bills on time?
4. Was the previous financial problem due to a one-time event such as a job loss?
5. A FICO score around 620 or more (on a scale with an 850 maximum).

The bad news is that if you meet all these criteria and are awarded a mortgage, the interest is likely to be from 5% to 10%