Property-flipping rule suspended
The White House temporarily suspends a rule that imposes a 90-day waiting period before foreclosed homes can be sold to receive government loans.
June 13, 2008: 4:17 PM EDT WASHINGTON (AP) -- The Bush administration is temporarily suspending a 5-year-old rule intended to deter property flippers, as part of an effort to help speed the sale of foreclosed properties.
For one year, the Federal Housing Administration will no longer impose a 90-day waiting period before foreclosed properties can be sold to receive government-backed loans.
The policy was put in place in 2003 to deter property "flipping" schemes, in which buyers are overcharged for foreclosures or other distressed properties. But the surge in vacant properties resulting from borrowers who were unable to afford their mortgages has become a far more pressing concern.
"A glut of foreclosed and abandoned homes harms neighborhoods, frustrates homebuyers and delays a community's recovery," FHA commissioner Brian Montgomery said in a prepared statement.
The new policy "will allow homebuyers to purchase these homes in much greater numbers and ease the excess supply of unsold homes," Montgomery said.
Nationwide, 261,255 homes received at least one foreclosure-related filing in May, up 48% from the same month last year, and up 7% from April, foreclosure
Paul McCausland
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Why should they care if one can sell it legitimately and move to another?
This is very helpful. For the banks and the rehab buyers that are looking to flip. Thanks for sharing.
Somehow, I don't think I head heard about that rule. Maybe becasue we weren't doing many FHA loans here in California. I think it's a very good idea to remove any obstacles to a recovery right now.
I could hug you Roy! Thank you so much for passing this along. I have buyer clients now that I thought would have to wait to close (until the 90 days had passed.)