This entry was posted on Tuesday, January 26th, 2010 at 9:00 am and is filed under Changing Guidelines, FHA/VA. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
The End of FHA’s 90 Day Anti-Flip Rule?
Word is out. HUD is lifting it’s prohibiting against buyers using FHA loans to buy a property recently “flipped” by an investor. This should be great news, and I fielded a number of phone calls over the weekend from clients and agents rejoicing (way prematurely) in the change.
But not so fast on….
Although HUD has indicated a change in their guidelines, they only insure FHA loans. Some investor still has to buy them. So what about those investors; are they on board? I put an email out over the weekend to find out and also talked today with a mortgage banking insider. As I suspected, the “investors” are not buying, HUD guarantee or not.
This sentiment is the same one that has caused investors to apply HUD’s anti-flip rule to conventional and VA loans, even though Fannie, Freddie, and VA have no such prohibition. Statistically, there is still a very level of mortgage fraud associated with flipped properties. Without a large pool of investors for mortgages securities (remember the U.S. government is still nearly the only buyer), there is no tolerance for anything risky.
This could change, so of course I’ll be keeping an ear to the rail for any good news. Stayed tuned. While it’s a shame that capital cannot make its way to the market of distressed homes (individual investors could certainly fulfill a competitive market function by buying, fixing, and selling damaged properties), it is the lack of market demand itself that is inhibiting the process.
February 9th, 2010 at 5:48 pm
Interesting. Yes, I do believe it will take some time before investors are willing to invest like they once did.
Boulder Short Sales
February 9th, 2010 at 6:17 pm
Hey Max,
You know I did find a few banks starting to dip their toes in the water on this, but they quickly pulled back. So far, no luck. If you find a bank, watch your step. Buried in the HUD guides are the requirements for “markup” on the flip that exceeds 20%. It’s not pretty, and I suspect there will be a lot of unhappy people and transactions that don’t close in the end.
February 16th, 2010 at 2:10 pm
Yea, any hidden fees are not going to make people happy. It is a shame when people make it through such a difficult process only to be surprised by “special” fees that weren’t properly disclosed before the process was started
February 20th, 2010 at 1:20 am
FHA antiflip just seems that ,its beneficial but
i dont think so.There are fees which is applicable
and that is very expensive. And if it works properly
it will take to come over.