I will be watching to see if this really works.  I find this a bit confusing.  As you point out, many foreclosed homes do not meet the FHA standards.

I've bookmarked this.  Very cool.  However, I think that ultimately the end servicers will determine if this program will be sold and bought....but you definitely have my curiousity here.

Joan,

Thanks for your input.  I agree this doesn't seem to be the most intuitive guideline change.  Thanks for visiting!

Larry,

I agree it is ultimately up to them.  I received this from one of our lenders on Friday:

Under the new waiver, homes that were foreclosed on and are being sold by the mortgage holder or on its behalf may be purchased by FHA borrowers without regard for the 90-day seasoning period. To prevent future flipping of any properties purchased through the foreclosure sales, the subsequent sales of the properties will continue to be subject to the standard regulatory requirements - lockout for the first 90 days and two appraisals required to justify any increase in value of 100% or more for sales that occur within 90 to 180 days. 

So, clearly, this lender has adopted the proposal.  I hope to see more soon!

Dan

I have a realtor who just asked me about this.  Do you know if there is a mortgagee letter regarding the change?  I have not heard anything about this from any of my investors, and would like to "force" the issue to see if they will approve.

There has not been a Mortgagee Letter provided on this, but here is the link to the waiver:

http://portal.hud.gov/pls/portal/docs/PAGE/FHA_HOME/PRESS/PROPERTY_FLIPPING_WAIVER/PROPERTY%20FLIPPING%20WAIVER%20REQUEST.PD

The reason there is not a lot of talk about this from the lenders is they are still figuring this out. Here are some suggestions to make the process easier. Seller needs to be the same for contract, appraisal and title. Check your county records. If your contract is signed by a servicer, make sure to get a POA. All seller parties need to be reflected in POA. For example Wilshire Credit is the servicer for First NLC, make sure both names are reflected on POA. (The servicer cannot be reflected as seller on the Contract, Appraisal or Title, they are only authorized to sign. Make sure seller matches public records!)  Ask your relators for names and phone numbers for the sellers or any servicers involved and provide to the lender.

So...what if I sold my house to someone and I held the full mortgage(seller financing).  Say that person does not pay the mortgage and I take the property back with a deed in lou of foreclosure.  Technically I am a mortgagee but I am not a bank or financial institution.

According to section 4 of the flipping rule, Properties aquired by non state or federal mortgagees are still eligible for the waiver.  State and Federally chartered lenders were already exempt from the flipping rule, so why would the issue a waiver for the people who are already exempt?

http://portal.hud.gov/pls/portal/docs/PAGE/FHA_HOME/PRESS/PROPERTY_FLIPPING_WAIVER/PROPERTY%20FLIPPING%20WAIVER%20REQUEST.PDF

It all boils down to the lender giving the loan.

Another help to our current problems would be extending the 203k program to investors again. When I first came into the business, this was one of the programs used to re-vitalize neighborhoods. Now, it isn't something that is available. Owner occupied is great, but investors will be the ones to help pull the real estate market back up.

Mary -

Thanks for posting that link and answering Ron's questions.  I've encounterd some challenges lately with FHA deals where one servicer's REO division is marketing on behalf of another forecloser; when this happens, it becomes very important to make sure that there is clarity as to exactly who is the seller.

Chad -

Thanks for your input!

Fred -

That's one of the best ideas I've heard recently.  Currently there is some private money available to investors, but mostly at twice what the cost would be if they were able to get 203(k) money. 

Thanks for your input!

Dan

I wonder what it would take to have investors 'flippers' benefit from this waiver?  I'm a Realtor in AZ and one of my current clients started buying alot of bank owned properties this year, he's been fixing them up and I've been putting them on the market for him.  One of them he hasn't had for 90 days yet and we've had to turn offers away and ask the buyers to come back with their offer after the 90 days are up.   It really isn't fair for anyone that we have to do this, especially in THIS market.  Investors are playing a 'key' role in getting all these 'distressed properties' off the market, the least the Federal Housing Adminsitration can do is cut them some slack as well! 

I am a buyer caught up in the 90 day mess . I am outraged that in this market that the seller and I are being punished for other peoples mistakes . I personally have written FHA and even spoken to a Rep with Tom Davis's office . This 90 day rule for investors is outdated . We need investors right now to restore these homes . I have looked at plenty bank owned homes . They are falling apart!!! Everything from mold , broken windows , gutted out from the past owners and even vagerants living in them . Plus to top it off the banks have not been easy to work with . I wrote five contracts . I even offered over 30ks more . I did not get one of those homes . I have this great home and can not close until this 90 day thing is up . I beg that all of you agents , brokers and investors write FHA or call your congressman ( they do call back ) and bug them about revising this rule . My communtiy is falling apart here . We need investors to restore our neighborhoods . I am a buyer and I thank this guy who bought my soon to be home ( bank owned ) . Its beautiful .... Now I just want to settle and soon.

Denise, Krystal,

I completely agree with you about the need for investors to step in.  Around here, there are a number of homes that banks are trying to sell, but they are finding they cannot because the homes condition makes them unsaleable to normal buyers.  Many investors don't wish to wait 90 days to resell, so are sitting on the sidelines.  Others are having a difficult time obtaining financing and are also stuck on the outside looking in.  I certainly hope that more financing options will be available to them soon!

Dan