HUD TAKES ACTION TO SPEED RESALE OF FORECLOSURES
FHA currently prohibits insuring a mortgage on a home owned by the seller for less than 90 days. However, HUD announced this week, a new temporary wavier of this rule to enable the financing of foreclosures and well as flips. The waiver will take effect on February 1. 2010 and is effective for one year, unless otherwise extended or withdrawn by the FHA Commissioner.
Limits to waiver:
- All transactions must be arms length.
- In cases in which the sales price of the property is 20% or more above the seller's acquisition cost, the waiver will only apply if the lender meets certain specific conditions.
- The waiver is limited to forward mortgages, and does not apply to the Home Equity Conversion Mortgage (HECM) for purchase program. Specific conditions and other details are in the text of the waiver at www.hud.gov
Happy serving and selling in 2010!