FHA Relaxes Anti-Flipping Rule Starting February 1, 2010
HUD steps it up
Earlier this month, the Housing and Urban Development Department which oversees the Federal Housing Administration stepped up their effort to curb the foreclosure crisis by vowing to speed up the resale of foreclosures. This week comes the announcement making it official that from February 1, 2010 through February 1, 2011, the FHA is lifting the rule that prohibits insuring a mortgage on a home owned by the seller for under 90 days. This rule has been informally called the “anti-flipping rule.”
The change was made to speed up sales of renovated homes in communities with too many bank-owned and foreclosed homes, said FHA Commissioner David H. Stevens.
3 birds, 1 stone
“Call it three birds with one stone: The federal government hopes to help low-down-payment home buyers, investors who fix up foreclosures, and communities burdened with too many bank-owned and foreclosed homes — all with one potentially far-reaching policy change,” noted Kenneth R. Harney of the Washington Post.
Harney continued, “The end game usually went like this: Find a hapless purchaser for the flipped house who would apply for a low-down-payment FHA loan. Typically, that buyer defaulted quickly — leaving the FHA with a foreclosed house on its books and a loss to its insurance funds.”
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This article published on Thursday, February 4th, 2010 at 12:01 am | Contact the editor
Topics: Real Estate
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AGBeat Editor-in-Chief: Lani, named one of Real Estate’s 100 Most Influential, as well as 12 Most Influential Women in Real Estate, is a business writer hailing from the great state of Texas in the city of Austin. As a digital native, Lani is immersed not only in advanced technologies and new media, but is also a stats nerd often burried in piles of reports. Lani is a proven leader, thoughtful speaker, and vested partner at AGBeat.
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- Michelle Morris:
RT @BHGrealestate: FHA Relaxes Anti-Flipping Rule Starting February 1, 2010 http://ow.ly/13U3e
- Trish Peters:
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- Kathy Beam:
RT @BHGrealestate: FHA Relaxes Anti-Flipping Rule Starting February 1, 2010 http://ow.ly/13U3e
- Number of U.S. Home Sale Listings Increases in January:
[...] had rises in inventory numbers, but perhaps FHA’s announcement this week that they would relax anti-flipping rules, the U.S. Treasury has vowed to improve the Home Affordable Modification Program and the end of [...]
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- AgentGenius:
#agnow [...] had rises in inventory numbers, but perhaps FHA’s announcement this week that they would relax a… http://bit.ly/9OMuz1
- Travis Foote:
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- Gomer Homingway:
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Benn Rosales
Conal Campbell
Elijah May
Lani Rosales
Tara Steele
Marti Trewe
Charlene Jimenez
From what I hear this new option may not be much help. Apparently it will be a HUGE issue for many banks to change/remove their existing overlaying under-writing guidelines in order to comply. Similarly, the new FHA rule that allows purchasers with lower credit scores to to obtain loans is a waste of time. I can’t find a single local lender who will accept a buyer under 600, most say 620…
Completely agree with Stephanie. Same situation in our neck of the woods. Lenders don’t care what FHA approves or mandates, they have their own guidlines for minimum scores.
Another huge factor is they can remove the 90-day requirement all they want, but if the “fine print” mandates a “seasoning” period if the home is being sold in the same calendar year (longer in some areas) for more than 20% more than the original purchase price, there’s additional hurdles anyway.
Screams as to why HAMP is largely a failure, too.
Navy Chief, Navy Pride
Hey lani~I just wrote a similar post the other day pugetsoundrealestateundressed.neighborhoodsundressed.com/2010/02/02/seattle-real-estate-fha-anti-flipping-rule-waived-for-1-year/ and I have to agree with Stephanie and Joe this is all smoke and mirrors.