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2010-02-02 18:30:21
FHA suspends anti-flipping rules

 To boost sales of foreclosures, FHA suspends anti-flipping rules

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.

The Federal Housing Administration is revising its long-standing anti-flipping rules starting Feb. 1 and just might score a hit with all three target groups. For years, the FHA has had a strict prohibition: It wouldn't insure a mortgage on a house if the seller had owned it for less than 90 days. The ban was a reaction to fraudulent quick flips of houses that inflated their values far beyond market worth.

The flips often were pure cons: Buyer A would acquire a low-cost house in bad repair, make minor cosmetic changes and resell within days at a significantly higher price to Buyer B, who was also part of the scheme. The sequence could involve a string of serial flippers within a month or two, with prices spiraling upward.

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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2010-02-16 08:26:37
FHA FLIPPING RULES

2010-02-02 18:30:21
FHA suspends anti-flipping rules

2010-01-25 12:26:54
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2010-01-18 19:47:02
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2009-12-23 09:34:46
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2009-12-22 09:38:06
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