FHA Waives anti-flipping rule through the end of the year!

Below is more good news for investors.  FHA is finally coming to terms that investors are a necessary and integral part of the real estate market.  As for the current market, investors are the single most important aspect of what will cause the housing crisis to correct itself.  2012 is looking more and more like a perfect storm for investors to purchase rental property.

FHA Waives Anti-Flipping Rule Through Year-End to Speed REO Sales

01/03/2012BY: CARRIE BAY

 Enter your email to receive Daily Email Updates:  

The Federal Housing Administration (FHA) is extending the temporary waiver of its property anti-flipping rule through the end of 2012.

FHA rules typically prohibit insuring a mortgage on  home owned by the seller for less than 90 days. In 2010, however, the agency waived this regulation, and later extended the waiver through 2011.

The new extension announced late last week will permit buyers to continue to use FHA-insured financing to purchase HUD-owned and bank-owned properties, no matter how long the homeowner has held the title, through December 31, 2012.

FHA says the waiver will allow homes to resell as quickly as possible, helping to stabilize real estate prices and revitalize communities experiencing high foreclosure activity.

“This extension is intended to accelerate the resale of foreclosed properties in neighborhoods struggling to overcome the possible effects of abandonment and blight,” said Carol Galante, FHA’s Acting Commissioner. “FHAremains a critical source of mortgage financing and

stability and we must make every effort that to promote recovery in every responsible way we can.”

According to FHA, the waiver contains strict conditions and guidelines to prevent predatory property flipping in which properties are quickly resold at inflated prices to unsuspecting borrowers.

Among these conditions, all transactions must be arms-length, with no link between the buying and selling parties.

In addition, 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.

FHA’s property-flipping waiver is limited to forward mortgages, and does not apply to the agency’s Home Equity Conversion Mortgage (HECM) for purchase program.

Since the original waiver went into effect on February 1, 2010, FHA has insured nearly 42,000 mortgages worth more than $7 billion on properties resold within 90 days of acquisition.

The agency says its own research has found that in today’s market, acquiring, rehabilitating, and reselling foreclosed properties to prospective homeowners often takes less than 90 days.

As a result, FHA says prohibiting the use of its mortgage insurance for a subsequent resale within 90 days would adversely impact the willingness of sellers to consider offers from potential FHA buyers, namely because they would be required to cover holding costs and the risk of vandalism that comes with allowing a property to sit vacant over a 90-day period of time.

Fannie Mae opts to now sell bulk REOs to investors as rentals...

This is the Govt's latest attempt to correct the housing crisis.  While it is a step towards being investor friendly, it is still somewhat restrictive in the way the property is to be utilized.  Fannie Mae and Freddie Mac are now allowing investors to buy bulk REOs to investors to convert them into rental property.  It will fill an increasing demand for rental properties in the marketplace.         

Unfortunately, it will more than likely not allow the properties to be resold for certain percentage of profit or allow the deed to be transferred within a certain amount of time.  I'm not sure if that is the case, as this has not been fully completed, but if this is anything like other propositions from Freddie and Fannie in the past, it will likely be the case.  I advise investors to keep a close eye on this.  It may have a severe impact on the way we do business.......

Turning foreclosures into rentals

• 12
• 3

• Print
• Comment

By Tami Luhby @CNNMoney January 9, 2012: 5:25 PM ET

The government wants to turn foreclosures into rentals.

NEW YORK (CNNMoney) -- Federal officials hope to launch a pilot program in early 2012 to convert government-owned foreclosures into rental properties.

The program, which was cited by Federal Reserve Chairman Ben Bernanke last week as one way to address the housing crisis, would sell foreclosed homes now owned by Fannie Mae (FNMA, Fortune 500) and Freddie Mac (FMCC, Fortune 500) to investors in bulk. The properties would then be converted into rentals.

The initiative began back in August, when the Federal Housing Finance Agency, the Treasury Department and the U.S. Department of Housing and Urban Development announced they were seeking suggestions on ways to dispose of repossessed homes now owned by Fannie Mae, Freddie Mac and the Federal Housing Administration.

In addition to getting the properties off the government's books, officials are hoping putting the homes back into productive use will stabilize neighborhoods and housing values. Also, it is looking to expand the supply of rentals, which are increasingly in demand.

The agency is not releasing details on how the rental program would work, instead saying it is "proceeding prudently but with a sense of urgency to lay the groundwork for the development of good initial transactions in early 2012."

Administration officials said they are continuing to work with the agency to develop the program.

Housing, stocks, gold and oil: Hot or not in 2012?

Until now, most foreclosed homes have been sold individually because investors have demanded bigger discounts to buy large numbers of properties.

But federal officials are warily eyeing the expected surge in foreclosures as banks ramp up their action against delinquent homeowners. The process had been stalled since late 2010 when banks' shoddy paperwork practices came to light.

There are close to 2 million homes in the late stages of delinquency, according to Lender Processing Services. Since foreclosed properties often sell below market value, they can wreak havoc on home prices.

Converting these homes to rentals can both help the neighborhood and minimize losses to Fannie, Freddie and the FHA, which hold about 250,000 properties, Bernanke told lawmakers last week.

He urged lawmakers to ramp up their efforts to fix the housing market, placing particular emphasis on the problem of vacant homes on the market.

"Restoring the health of the housing market is a necessary part of a broader strategy for economic recovery," he said. 

QR Codes... Say it all without saying a word!

I have recently become infatuated with a simple, yet brilliant invention called the "QR Code" which stands for Quick Response Code.  It is a square bar code image, that when scanned, will display an image to the device it is scanned from.  A simple message can be displayed.  But, for savvy marketers, any website can be advertised from this quirky little invention!



Try this: If you do not already have the app on your smart phone, download a free bar code scanner app. This can be obtained through android, blackberry, or apple.  Once you have the app, scan the odd looking image above this paragraph.

It takes you directly to a website! If you have a personal branding website, you can add a QR Code for the web address and put it on your business card! It's great! Potential clients will have instant access to your profile, giving them an instant commercial about yourself.

More importantly, you can create links to properties that you are trying to market and consumers will have instant access to your property's criteria! Also, it can lead  them to other listings you may have that consumers may have otherwise not be exposed to!

I found a website that allows you to instantly create a QR Code for free.  Check it out! It is www.quirify.com.

When you go to the page, simply type the link or message you want the Code to promote.  It will create the Code and you can save it from the website, or even print it to hand out at open houses!