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    Tuesday, January 19, 2010

    HUD Expands Anti-Flipping Waiver - Investors May Participate

    Below is updated information on HUD's annoucement on their flipping policy.  We expect this week to have an announcement from HUD on the final changes to their credit policies.  As soon as this is available we will get the information out to you.

    HUD Expands Anti-Flipping Waiver – Investors May Participate
    On January 15, 2010, the US Department of Housing and Urban Development (HUD) announced that it is temporarily expanding the property flipping waiver to include investors and entities that purchase foreclosures either singly or in bulk for resale.  The waiver takes effect on February 1, 2010, and is expires in one year.  Under the waiver, homes that were foreclosed on and are being sold by the mortgagee or on its behalf may be purchased by FHA borrowers without regard to the 90-day seasoning period.  NAR worked with the California Association of REALTORS® and FHA to expand the waiver.

    All transactions must meet the following three conditions:

    1) All transactions must be arms-length.  The waiver outlines several actions the lender may take to ensure there is no inappropriate collusion or agreements between parties.

    2) Lender must justify the increased value it exceeds 20 percent of the seller’s acquisition cost.  The lender justifies the increase in value by retaining supporting documentation in the loan file and/or obtaining a second appraisal. The lender must also order a home inspection and provide the inspection report to the borrower (the lender may require the borrower to pay for the inspection).

    3) The HECM Program (reverse mortgages) is not eligible.

    HUD first announced the waiver on June 9, 2008, and the waiver was to be in effect for only one year.  HUD exempted from the property flipping rules properties sold by HUD through its Real Estate Owned activities, new homes being sold by builders and properties being sold by relocation companies and the property owner’s employer as part of a job relocation.  HUD later extended the waiver through May 10, 2010.  

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    Posted via email from Sean LaRue's Posterous

    1 comment:

    VA STREAMLINE REFINANCE said...

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