FHA Approves Anti-Flipping Proposal
FHA Approves Anti-Flipping Proposal
FHA Approves Anti-Flipping Proposal
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January 31, 2011 (Chris Moore)
mortgage-property-flipping
The Federal Housing Authority (FHA) has followed through on its recent proposal of extending the suspension of its “anti-flipping” rule through the remainder of 2011. Since the waiver originally went into effect the FHA has insured more than 21,000 mortgages worth over $3.6 billion on properties resold with 90 days.

FHA regulations typically prohibit insuring a mortgage on a home owned by the seller for less than 90 days, but in February of last year the FHA temporarily waived this regulation as their research had shown that acquiring, rehabilitating, and reselling distressed properties often takes less than 90 days.

By prohibiting the use of FHA mortgage insurance for a subsequent resale within 90 days of acquisition, investors were reluctant to purchase foreclosures due to the higher costs incurred of holding on to the property, especially at a time when nearly half of all homes sold have FHA mortgages.

“As I noted when we first announced this policy change early last year, because of the tightened credit market, FHA-insured mortgage financing is often the only means of financing available to potential homebuyers,” FHA Commissioner David Stevens said. “Today I can report that this policy change has been effective.”

Bruce McBarnette, Esq., president of Summit Connection LLC, said, “Anti-flip rules are useful to protect buyers in an appreciating market where people are more likely to be deceived by a grossly inflated appraisal. In this market, however, with prices still falling in many areas, people are not as likely to be fooled by fraudulent appraisals. Anti-flip rules make it more difficult for investors to buy and renovate homes. This puts a drag on the real estate market at a time when there is a glut of foreclosure homes that have to be bought and fixed up, if we want a rapid economic recovery. There were over 2.8 million foreclosure filings last year, which is an incredibly high number.”

Some of the rules, however, still remain in place to protect FHA mortgage borrowers against some of the other past predatory practices associated with “flipping:”

– All transactions must be arms-length, with no identity of interest between the buyer and seller or other parties participating in the sales transaction.
– In cases in which the sales price of the property is 20 percent or more above the seller’s acquisition cost, the waiver will only apply if the lender meets specific conditions.
– The waiver is limited to forward mortgages, and does not apply to the Home Equity Conversion Mortgage (HECM) for purchase program.

Tags: FHA, flipping, anti-flipping, mortgages, investor, mortgage fraud, appraisals, renovate homes, FHA mortgages, predatory practices

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Helpful Tools
Mortgage
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Estimate your monthly mortgage payment
Auto Loan
Calculator

Determine how much car you can afford before buying
Learn About
Mortgage Loans

Learn about the different types of home loans
15 Year vs 30 Year
Loan Comparison

Compare 15 year and 30 year mortgage loans
Todays Mortgage
Rates

See today's mortgage rates. Shop, compare and save.

January 31, 2011 (Chris Moore)
mortgage-property-flipping
The Federal Housing Authority (FHA) has followed through on its recent proposal of extending the suspension of its “anti-flipping” rule through the remainder of 2011. Since the waiver originally went into effect the FHA has insured more than 21,000 mortgages worth over $3.6 billion on properties resold with 90 days.

FHA regulations typically prohibit insuring a mortgage on a home owned by the seller for less than 90 days, but in February of last year the FHA temporarily waived this regulation as their research had shown that acquiring, rehabilitating, and reselling distressed properties often takes less than 90 days.

By prohibiting the use of FHA mortgage insurance for a subsequent resale within 90 days of acquisition, investors were reluctant to purchase foreclosures due to the higher costs incurred of holding on to the property, especially at a time when nearly half of all homes sold have FHA mortgages.

“As I noted when we first announced this policy change early last year, because of the tightened credit market, FHA-insured mortgage financing is often the only means of financing available to potential homebuyers,” FHA Commissioner David Stevens said. “Today I can report that this policy change has been effective.”

Bruce McBarnette, Esq., president of Summit Connection LLC, said, “Anti-flip rules are useful to protect buyers in an appreciating market where people are more likely to be deceived by a grossly inflated appraisal. In this market, however, with prices still falling in many areas, people are not as likely to be fooled by fraudulent appraisals. Anti-flip rules make it more difficult for investors to buy and renovate homes. This puts a drag on the real estate market at a time when there is a glut of foreclosure homes that have to be bought and fixed up, if we want a rapid economic recovery. There were over 2.8 million foreclosure filings last year, which is an incredibly high number.”

Some of the rules, however, still remain in place to protect FHA mortgage borrowers against some of the other past predatory practices associated with “flipping:”

– All transactions must be arms-length, with no identity of interest between the buyer and seller or other parties participating in the sales transaction.
– In cases in which the sales price of the property is 20 percent or more above the seller’s acquisition cost, the waiver will only apply if the lender meets specific conditions.
– The waiver is limited to forward mortgages, and does not apply to the Home Equity Conversion Mortgage (HECM) for purchase program.

Tags: FHA, flipping, anti-flipping, mortgages, investor, mortgage fraud, appraisals, renovate homes, FHA mortgages, predatory practices

FILL OUT THE FORM
It all starts here. Select the loan product you want to apply for and complete the subsequent questionnaire.
WE VERIFY & TRANSMIT TO LENDERS
Once we receive your completed questionnaire we verify a couple vital pieces of information and direct your information to our network of lenders, all within minutes.
REVIEW YOUR OFFERS
With offers in hand you can now compare rates and costs and get the best possible deal. Comparison shopping made easy. You fill out one form and lenders compete for your business.
CHOOSE YOUR LENDER
Congratulations! With the great learning tools we provide for you at LoanRateNetwork and the offers you have received, you've found the right product and the best rate.
HOW LOANRATENETWORK
LOAN CENTER WORKS
ADVANTAGES OF USING
LOANRATENETWORK
FAST & EASY. DATA ENCRYPTED
Applying to multiple lenders is fast and easy with our one simple questionnaire. Choose the product you’re looking for, take a few moments to answer a few questions and you’re on your way to saving.
NO OBLIGATION. NO HIDDEN FEES
Any of the services on our website are 100% free, there is no obligation to use our services or any hidden fees. We’re not loan brokers so we don’t charge broker fees like other websites.
NO SSN OR CREDIT CHECK
No SSN or credit check is necessary to use our services. We bring lenders to you so they can compete for your business and you save. That information only becomes necessary after you choose a lender.
Helpful Tools

January 31, 2011 (Chris Moore)
mortgage-property-flipping
The Federal Housing Authority (FHA) has followed through on its recent proposal of extending the suspension of its “anti-flipping” rule through the remainder of 2011. Since the waiver originally went into effect the FHA has insured more than 21,000 mortgages worth over $3.6 billion on properties resold with 90 days.

FHA regulations typically prohibit insuring a mortgage on a home owned by the seller for less than 90 days, but in February of last year the FHA temporarily waived this regulation as their research had shown that acquiring, rehabilitating, and reselling distressed properties often takes less than 90 days.

By prohibiting the use of FHA mortgage insurance for a subsequent resale within 90 days of acquisition, investors were reluctant to purchase foreclosures due to the higher costs incurred of holding on to the property, especially at a time when nearly half of all homes sold have FHA mortgages.

“As I noted when we first announced this policy change early last year, because of the tightened credit market, FHA-insured mortgage financing is often the only means of financing available to potential homebuyers,” FHA Commissioner David Stevens said. “Today I can report that this policy change has been effective.”

Bruce McBarnette, Esq., president of Summit Connection LLC, said, “Anti-flip rules are useful to protect buyers in an appreciating market where people are more likely to be deceived by a grossly inflated appraisal. In this market, however, with prices still falling in many areas, people are not as likely to be fooled by fraudulent appraisals. Anti-flip rules make it more difficult for investors to buy and renovate homes. This puts a drag on the real estate market at a time when there is a glut of foreclosure homes that have to be bought and fixed up, if we want a rapid economic recovery. There were over 2.8 million foreclosure filings last year, which is an incredibly high number.”

Some of the rules, however, still remain in place to protect FHA mortgage borrowers against some of the other past predatory practices associated with “flipping:”

– All transactions must be arms-length, with no identity of interest between the buyer and seller or other parties participating in the sales transaction.
– In cases in which the sales price of the property is 20 percent or more above the seller’s acquisition cost, the waiver will only apply if the lender meets specific conditions.
– The waiver is limited to forward mortgages, and does not apply to the Home Equity Conversion Mortgage (HECM) for purchase program.

Tags: FHA, flipping, anti-flipping, mortgages, investor, mortgage fraud, appraisals, renovate homes, FHA mortgages, predatory practices

HOW LOANRATENETWORK
LOAN CENTER WORKS
FILL OUT THE FORM
It all starts here. Select the loan product you want to apply for and complete the subsequent questionnaire.
WE VERIFY & TRANSMIT TO LENDERS
Once we receive your completed questionnaire we verify a couple vital pieces of information and direct your information to our network of lenders, all within minutes.
REVIEW YOUR OFFERS
With offers in hand you can now compare rates and costs and get the best possible deal. Comparison shopping made easy. You fill out one form and lenders compete for your business.
CHOOSE YOUR LENDER
Congratulations! With the great learning tools we provide for you at LoanRateNetwork and the offers you have received, you've found the right product and the best rate.
ADVANTAGES OF USING
LOANRATENETWORK
FAST & EASY. DATA ENCRYPTED
Applying to multiple lenders is fast and easy with our one simple questionnaire. Choose the product you’re looking for, take a few moments to answer a few questions and you’re on your way to saving.
NO OBLIGATION. NO HIDDEN FEES
Any of the services on our website are 100% free, there is no obligation to use our services or any hidden fees. We’re not loan brokers so we don’t charge broker fees like other websites.
NO SSN OR CREDIT
CHECK
No SSN or credit check is necessary to use our services. We bring lenders to you so they can compete for your business and you save. That information only becomes necessary after you choose a lender.