This is GREAT NEWS for Investors, interested in buying and flipping foreclosed homes throughout the USA.In an effort to help stabilize housing prices more quickly and thus unload some of the foreclosures that are flooding low income communities, the mortgage insurer extended a waiver of its anti-flipping regulations through 2012!
The waiver, which was initially issued in 2010 and set to expire in December, suspends regulations that prohibit the agency from insuring mortgages used to purchase homes that are bought and resold in less than 90 Days.
Read the DETAILS Below:
The Federal Housing Administration is extending for another year its temporary waiver of anti-flipping regulations, initially introduced in 2010 to facilitate the turnaround of foreclosed properties in hard hit communities.In most cases, FHA ordinarily prohibits insuring a mortgage on a home owned by the seller for less than 90 days. In 2010, FHA temporarily waived this regulation through January 31, 2011, and later extended that waiver through the remainder of 2011. Now that has been extended to the end of 2012. Great News for Investors!"This extension is intended to accelerate the resale of foreclosed properties in neighborhoods struggling to
overcome the possible effects of abandonment and blight," said Acting FHA Commissioner Carol J. Galante. "FHA remains a critical source of mortgage financing and stability and we must make every effort to promote recovery in every responsible way we can."
However, the waiver contains strict conditions and guidelines to prevent "predatory" property flipping - when properties are quickly resold at inflated prices to unsuspecting borrowers.
Waiver went in Effect Feb. 1, 2010
Since the waiver first went into effect on Feb. 1, 2010, the FHA has insured nearly 42,000 mortgages worth more than $7 billion on properties resold within 90 days of acquisition.FHA research has found that flipping these properties to prospective homeowners often takes less than 90 days. Without the waiver, sellers must consider holding costs and taking on the risk of vandalism associated with allowing a property to sit vacant over a 90-day period of time.
The waiver continues to be limited to sales meeting the following conditions:
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 apply only if the lender meets specific conditions, and documents the justification for the increase in value; andThe waiver is limited to forward mortgages, and does not apply to the Home Equity Conversion Mortgage (HECM) for purchase program.