The MI rep’s take on it is that someone could buy a house below market value, produce straw buyers, and sell at an overpriced amount. This would then inappropriately inflate property values and create more problems in the market. I guess they are assuming that the appraiser would have to be willing to inflate the value as well. She also indicated that this just opens the door to more potential loan fraud, etc…

Myself, I have grown weary of this whole issue and pray that I do not run into anymore “flips”. or anything that looks like one. They’re stressin me out man!

TTTTTHHHHHPPPPPBBBBBPPPP!!!!!

I’m sure when HUD put this rule into play, they were attempting to solve some great corruption problem within the industry. But at this point in the game, LET’S JUST PUT SOME PEOPLE INTO HOMES! It helps everyone.

Fannie doesn’t care, Freddie doesn’t care, why does HUD?

Just to clarify, here’s the english translation of the waiver of the flip rule:

If you are not the foreclosing entity, it’s representative or subsidiary (called the mortgagee in the actual verbiage), you still have to wait 90 days from the acquired date.

So they’ve allowed the company that took the foreclosure hit to attempt to unload the property faster, but they are penalizing the folks who are buying on the courthouse steps, taking care of the property, and attempting to make a profit.

I, for one, would much rather have a conscientous seller with some skin in the game make a profit, and give my buyers what they are looking for, rather than see another torn up bank owned property sitting empty for a longer period of time.

In the scenario you mentioned Mike, our borrowers are getting the property for a good price. It’s in great shape. The sellers want a fast close. They are using a local title company who is responsive. This is a great opportunity for everyone involved. How waiting the 90 days prevents some kind of potential problem is beyond me.

The other issue involved here is that it is difficult to put borrowers into a conventional loan right now. The minimum required down payment is 5% ONLY if you have a 700 or better credit score. If you are 699 or below, you are required to have a 10% down payment. So with a higher down payment requirement who do you think is likely to buy this property? INVESTORS!

We all know the housing industry has been a mess. We know that we had to learn some lessons as a country, as consumers, and especially as professionals. We get it, new rules had to be implemented. But this rule doesn’t help anyone. It actually defeats it’s own purpose.