HomeRun Homes Rent to Own Homes Blog

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HomeRun Homes is a centralized marketplace which helps people Find or Sell a Rent to Own Home, both Nationwide and Globally to the thriving Rent to Own Market. http://www.lease2buy.com

January 3, 2012

Happy Flipping New Year !

Hi Everyone,
   Welcome back to our first business day of the New Year!

   Back in 2010, the FHA, a major insurer of mortgages, issued a waiver in 2010 that permitted "Flipping", which is buying a home for a low/cheap price, and then resell them for a profit, and all within 90 days. This measure was taken to provide stability, primarily in the low-income communities, which have been overloaded with foreclosures.

   The waiver was set to expire, however, the FHA has extended their "anti-flipping regulations" through 2012, per Les Christie for a recent CNN Money article titled, "FHA says: Flip that house". Acting FHA Boss Carol Galante said that this was extended in order to help "accelerate the resale of foreclosed properties in neighborhoods struggling to overcome the possible effects of abandonment and blight". With foreclosed homes, property values drop, which can have a domino effect with even worse consequences for these communities. When the "Flippers" come in, they usually rehab the homes, which helps them sell the home, and improves the "conditions for neighborhoods", per Christie.

   Flipping was not always the Golden Child, and that is the reason originally for these anti-flipping rules (There was predatory flipping, which took advantage of "unsuspecting borrowers").

   To qualify for this waiver, the sale must be an "Arms length" transaction between a seller and buyer with no relationship between them, and there are certain other requirements that need to be met if the new sale price is 20% or more above the previous selling price.

   Christie writes that since the waiver went into effect in early 2010, the FHA insured in excess of 42,000 loans to buy homes that were being resold within 90 days, for a total of over $7 billion in mortgage principal.

   Have you taken advantage of the FHA Waiver in any of your transactions? Can you share your experience with us? We'd love to hear from you.

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Have a Great Week, and Happy Rent-to-Owning !
Rob Eisenstein
HomeRun Homes Blog: http://blogging.lease2buy.com
HomeRun Homes Websites: http://www.lease2buy.com and http://www.homerunhomes.com

TAGS: #FHA #Flipping #foreclosures #waiver #properties #rehab #predatoryflipping #armslength

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