Across the nation, foreclosures are increasing and the lenders are forced to hold more inventory. In order to assist the lenders in selling their REO properties (Real Estate Owned) the FHA (Federal Housing Administration) has decided to temporarily lift the 90 day seasoning period for the following 12 months. This change will help lenders by reducing the number of days on market for qualifying properties. With reducing the number of REO Properties on the market it will assist home owners that are competing to sell their properties.

  The 90 day waiting period was instituted in 2003 by FHA. This was implemented to try to limit predatory lending and house flipping. The FHA required the seller to hold title for at least 90 days to sell a property to a buyer that is obtaining FHA insured financing. (My opinion, great intention but not very American. You can buy a car and re-sell it the next day for a profit?) The car buyer can even get a loan.

  The reason FHA made this change is to motivate the lenders to renovate the property or assist the lender with the market time they have to hold the property after they foreclose.

  Prior to this change the banks/lenders that foreclose on a property had to wait the 90 day period (just like the rest of us). This change comes in response to the tremendous amount of REO properties for sale. How much will this change help? I guess it will not hurt the process, but unless the banks agree to start rehabbing the properties many properties will not be eligible to be sold using FHA financing. This is due to the fact, that many of the properties will not meet FHA standards. This is primarily the case because of deferred maintenance. (If you can not pay your mortgage payment, many times you may not be able to pay for a new roof). FHA has set standards or guidelines that have to be met in order for the property to be sold to a buyer obtaining FHA financing. Scott Dasher & Associates works with many banks and asset managers and very few are completing any improvements. They want to get the property sold for the best possible price, with the least amount of time on the market and Sold AS IS. The properties will sell either way, but I think the lenders will start addressing the condition of the property on a risk/reward case by case basis. However, the lenders choose to proceed I applaud FHA for making this change even if it is only for the next 12 months.

**Interesting, after further research on this matter I have been told that this temporary decision to lift the wating period will not apply to investors. It will only be applicable on bank owned properties. Hopefully FHA will see the value of the real estate investment community and revise this decision to include all parties. In my opinion it is a service and a asset for investors to purchase real estate and improve it. Who wants to live next door to a boarded up house?**

Scott Dasher

Real Estate Broker CEO, REO Sales

Scott Dasher & Associates

Atlanta: 404-567-6320

West Atlanta: 678-715-3600

www.scottdasher.com