Guest Post: FHA Takes Steps to Boost Foreclosure Sales
The federal government hopes to help low-down-payment home buyers, investors who fix up foreclosures, and communities burdened with too many bank-owned and foreclosed homes — all with one potentially far-reaching policy change.
The Federal Housing Administration revised its long-standing anti-flipping rules effective Feb. 1 and just might score a hit with all three target groups. For years, the FHA has had a strict prohibition: It wouldn’t insure a mortgage on a house if the seller had owned it for less than 90 days. The ban was a reaction to fraudulent quick flips of houses that inflated their values far beyond market worth. The flips often were pure cons: Buyer A would acquire a low-cost house in bad repair, make minor cosmetic changes and resell within days at a significantly higher price to Buyer B, who was also part of the scheme. The sequence could involve a string of serial flippers within a month or two, with prices spiraling upward.
| This is a guest post by Bert Waugh, III, the CEO and President of Columbia Mortgage. Columbia Mortgage has offices throughout SW Washington and Oregon. Bert is a blogger, huge Oregon Duck fan, and lives in Portland with his wife, Jamie and there children Brody and Parker. |
