FHA will keep funding flips

For the second year in a row, the Federal Housing Administration is extending a temporary waiver of its “anti-flipping” rule, meaning homebuyers relying on FHA-insured financing will continue to be able to buy homes that have changed hands in the last 90 days.
The waiver is a boon for investors seeking to rehab and flip properties, because it expands the pool of eligible borrowers to include those relying on FHA-backed loans, popular with first-time homebuyers and others who lack the cash to make large down payments.

In extending the waiver through 2012, FHA said all transactions must continue to be arms-length. 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 can document the justification for the increase in value, FHA said.

FHA instituted the anti-flipping rule in 2003 to protect its mutual mortgage insurance program from losses on homes that were merely flipped, rather than rehabbed. Homes repossessed by Fannie Mae, Freddie Mac, and state- and federally chartered financial institutions were exempt from the rule.

In February 2010, the Obama administration waived the waiting period for resale’s — including homes purchased and rehabbed by private investors — in the hopes of stabilizing home prices and revitalizing communities hit by foreclosures.

It often takes less than 90 days to acquire, rehabilitate and sell properties, the Department of Housing and Urban Development said at the time. Some sellers of rehabbed properties had been reluctant to enter into contracts with FHA buyers because of the cost of holding a property for 90 days, HUD said. For more stories like this Click Here

2012 Real Estate Market Predictions | Short Sales Will Dominate

If you want to know what to expect for housing in 2012…look no further than this article
There should be absolutely no doubt that 2012 will be all about Short Sales and REOs (Bank Owned)
U.S. lenders started foreclosures on more properties in the third quarter, the first increase in a year, as a backlog stemming from claims of faulty home seizures began to ease.
New foreclosures rose to 1.08 percent of all loans from 0.96 percent in the prior three months, according to a report today from the Mortgage Bankers Association in Washington. The rate had been falling since the third quarter of 2010, when regulators began investigating robo-signing, the practice of pushing through unverified paperwork.
Several of the nation’s largest banks called a temporary halt to foreclosures at the end of last year while they addressed claims of flaws in their court documents. The moratoriums clogged the entire foreclosure pipeline as banks investigated their procedures.
This action backlogged the banks ability to follow through with newly delinquent mortgages thus creating an even larger amount of defaulted properties. Banks do not want the foreclosures they would rather short sale since this cuts down their expense.
Banks are now starting to speed up the process of placing short sales on the market now that they’ve cleaned up their paperwork. The disadvantage for buyers is everything you’ve heard.
•   Waiting 3 – 4 months for a counter or acceptance of the offer
•   Another 3 – 4 months for documents
•   Yet another month to close, totaling nearly 9 months before you can move in.

Non investors are not interested in waiting this period nor do they trust the condition of the property once all is said and done, and rightfully so.

Inevitably this will host a shortage in traditional “non short sale or REO properties” thrusting buyers to make hasty decisions on their purchase. In the history of Real property in the United States, this is undoubtedly a historical time for any one person seeking the American dream to own their own property. Learn More