News for Prescott AZ - AmericanTowns.com

Tuesday, January 19, 2010

HUD WAIVES 90 DAY FLIPPING RULE TO SPEED THE SALE OF FORECLOSED PROPERTIES

HUD TAKES ACTION TO SPEED RESALE OF FORECLOSED PROPERTIES TO NEW OWNERS

In an effort to stabilize home values and improve conditions in communities
where foreclosure activity is high, HUD Secretary Shaun Donovan today
announced a temporary policy that will expand access to FHA mortgage
insurance and allow for the quick resale of foreclosed properties.  The
announcement is part of the Obama administration commitment to addressing
foreclosure.

The waiver will take effect on February 1, 2010 and is effective for one
year, unless otherwise extended or withdrawn by the FHA Commissioner.

To protect FHA borrowers against predatory practices of "flipping" where
properties are quickly resold at inflated prices to unsuspecting borrowers,
this waiver is limited to those sales meeting the following general
conditions:

* All transactions must be arms-length, with no identity of interest between
the buyer and seller or other parties participating in the sales
transaction.  

* In cases in which the sales price of the property is 20 percent or more
above the seller's acquisition cost, the waiver will only apply if the
lender meets specific conditions.

* The waiver is limited to forward mortgages, and does not apply to the Home
Equity Conversion Mortgage (HECM - Reverse Mortgages) for purchase program.

Specific conditions and other details of this new temporary policy are in
the text of the waiver, available on HUD's website at:
http://www.hud.gov/offices/hsg/sfh/waivpropflip2010.pdf

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