Wednesday, July 30, 2008

FHA Mortgages: What Is a Flip and How Can it Affect you?




You may have heard the term “flipping” lately, especially as investors find good buys in the real estate market. What exactly is flipping, is it a bad thing and how might it touch you?


Flipping is a word that can cause many a lender anxiety. Not the traditional flip that you see in gymnastics or diving. But flipping as it pertains to the real estate and lending community. The flipping I’m talking about means buying a home for a bargain and then re-selling it quickly for profit. Sometimes huge upgrades are made to the property, sometimes not so much. But anytime someone is in the market to make money turning houses, opportunity for fraud can arise. That’s why lenders are particular and have so many rules attached to flipped homes.

Not too many years back, certain markets became inundated with fraud flipping schemes. Realtors, lenders and appraisers in these situations were all in cahoots with one another. As the saying goes, one bad apple can spoil the whole bunch. It was a very terrible thing, and the regulations we have today are reflective from that lesson learned. In particular, FHA has established strict guidelines to follow to alleviate flipping fraud on its homes that it insures.

FHA released a 90 day flipping waiver policy in reaction to the current market and buying climate. Basically, it outlines the following: FHA requires that: a) only owners of record may sell properties that will be financed using FHA-insured mortgages; b) any resale of a property may not occur 90 or fewer days from the last sale to be eligible for FHA financing; and c) that for re-sales that occur between 91 and 180 days where the new sales price exceeds the previous sales price by 100 percent or more, FHA will require additional documentation validating the property’s value. FHA also has flexibility to examine and require additional evidence of appraised value when properties are re-sold within 12 months.How can this policy affect you? If you are selling or buying a home that is a flip and you want FHA financing available, don’t even think about executing a contract until the 91st day. Your appraiser will note that it hasn’t been 90 days since the last sale, and immediately your FHA underwriter will read it and, in turn, reject the loan. And if on the 91st day since settlement you are buying a home that was in deplorable condition and has been fixed up nicely, you might need to get a second independent appraisal to support the value. Even if it is really apparent that it’s not the same house it was 3 months ago.

Certain properties are exempt from the rule. For instance, if HUD has foreclosed on the property, it’s not going to make itself wait 90 days to sell its own real estate. That would be kind of silly. Also, if one can show the seller inherited the property, it should be ok. And properties acquired by employers or relocation companies are kosher, too. There are a few other exemptions sprinkled about, but these are the most common ones encountered.


Basically, if you’re in the home for an FHA mortgage, just keep your ears and eyes open. Knowing your limitations upfront can make you a better negotiator and save you headaches.

34 comments:

Anonymous said...

Ιf some one desires exρert view regaгding blоgging
and sitе-building after that i ρгοpose him/her tо vіsit this
web sіte, Keeр up thе nice woгk.


Ηerе is my web-sіtе
... best deal on loans

Anonymous said...

Quality content is the main to attract the viewers to pay a visit the
website, that's what this web page is providing.

Feel free to surf to my web-site; zumba Fitness classes

Anonymous said...

Unquestionablу beliеѵe that ωhich you
stated. Your faνourite ϳuѕtification sеemed
to be οn the web the simplеst
thing to be awаre of. I say to уou, I definitely
get iгκеd while people think about worries that they ρlаinlу ԁon't know about. You managed to hit the nail upon the top and defined out the whole thing without having side-effects , people could take a signal. Will probably be back to get more. Thanks

Also visit my homepage: best loans uk

Anonymous said...

Hi there! Thiѕ is kind of off topic but I neеd some guiԁance frοm an еstablished blog.
Is it veгy hard to set up youг οwn blοg?
I'm not very techincal but I can figure things out pretty quick. I'm thinking about maκing my
own but I'm not sure where to begin. Do you have any points or suggestions? Many thanks

My website best payday loans uk

Anonymous said...

What's Going down i am new to this, I stumbled upon this I've found It positively useful
and it has aided me out loads. I am hoping to contribute & assist other users like its aided me.
Great job.

My web blog :: workouts to improve vertical leap

Anonymous said...

Hey there this is somewhat of off topic but I was wondering if blogs use
WYSIWYG editors or if you have to manually code with HTML.
I'm starting a blog soon but have no coding skills so I wanted to get guidance from someone with experience. Any help would be greatly appreciated!

Here is my webpage - workouts to increase vertical

Anonymous said...

I must thank you for the efforts you have put in writing this website.
I really hope to view the same high-grade blog posts
from you later on as well. In truth, your creative writing abilities has motivated me to get my
own, personal site now ;)

my webpage :: http://Www.facebook.com/

Anonymous said...

It's remarkable to visit this site and reading the views of all friends regarding this paragraph, while I am also zealous of getting knowledge.

Feel free to surf to my website increase vertical jump

Anonymous said...

I'm not sure where you are getting your info, but good topic. I needs to spend some time learning much more or understanding more. Thanks for great info I was looking for this information for my mission.

Here is my homepage workouts to improve vertical jump

Anonymous said...

Thanks very interesting blog!

Here is my web blog: exercises to increase vertical jump

Anonymous said...

fantastic points altogether, you simply won a new reader.
What would you suggest about your submit that you just made some
days in the past? Any positive?

Here is my page :: Exercises to improve vertical

Anonymous said...

This excellent website definitely has all the information I wanted concerning this subject and didn't know who to ask.

Here is my site: exercises to improve vertical jump

Anonymous said...

Hello to all, how is the whole thing, I think every one is getting more from this website, and your views are pleasant
designed for new users.

My web blog :: exercises using hand weights

Anonymous said...

My brother recommended I would possibly like this
blog. He was entirely right. This publish actually made my day.
You cann't consider just how much time I had spent for this info! Thank you!

Feel free to visit my web site ... the jump manual

Anonymous said...

Good post. I learn something totally new and challenging on websites
I stumbleupon on a daily basis. It will always
be helpful to read content from other authors and use
a little something from their web sites.

my blog post vertical leap workouts

Anonymous said...

Nice answers in return of this issue with solid arguments
and explaining everything about that.

Review my blog; Indabronx.Com

Anonymous said...

I rarely comment, but i did some searching and wound up here "FHA Mortgages: What Is a Flip and How Can it Affect you?".
And I actually do have 2 questions for you if it's allright. Could it be simply me or does it give the impression like a few of the remarks look as if they are written by brain dead visitors? :-P And, if you are posting on additional online social sites, I would like to follow anything fresh you have to post. Could you make a list of the complete urls of your shared sites like your Facebook page, twitter feed, or linkedin profile?

my blog vertical leap workouts

Anonymous said...

It bears mentioning that there are also games and simulations available to those wanting to learn to trade stock
index futures. The only downside of it in a lot of people's eyes is the fact that there is no multiplayer content. The most unique thing about Ouya is that it is said to be "open" -- although what this means is up for interpretation.

Feel free to surf to my web page http://www.qd-ruifeng.com/plus/guestbook.php

Anonymous said...

This method of fishing also has a by-catch of non-target species such as sharks, dolphins, turtles, and other non-target fish species.
You will also want to have a supply of different lines that you can use.

Yet sometimes a net is better to use because it usually doesn't harm the fish and will most likely be easier for you to prepare the fish for later.

Here is my blog post ... click through the following web page

Anonymous said...

In most cases they are, but when it comes to updates, patches,
etc to the mmorpgs. Don't leave the landscape designing and terrain optimization to the last moment. It can go as far as ruining their experience since it is the last interaction they have with a game.

Here is my web-site Click At this website

Anonymous said...

She is likely a WARRIOR PERSONALITY I talk about in the KWML Mastery
Course on women, dating, love, and friendship. Port forwarding lets you specify
which ports the game needs to perform at it's best. You can also customize the car including retractable hanggliders.

Here is my weblog kostenlos spielen - www.francofon.fr

Anonymous said...

Today, while I was at work, my cousin stole my
iphone and tested to see if it can survive a
forty foot drop, just so she can be a youtube sensation.
My iPad is now destroyed and she has 83 views.
I know this is entirely off topic but I had to share it with someone!



my web blog - vertical jump program review

Anonymous said...

I say this because this was the only cab company that picked up the
phone on the first ring. I know a lot more music now than before and have changed my tastes.
This was a live performance recorded by Dutch national television, 2 April 2011 (therefore it isn't fully cough free), by four pianists: Elisabeth Bergmann, Marcel Bergmann, Sandra van Veen, and Jeroen van Veen.

Also visit my blog post http://www.nexopia.com/users/CasimiraOd/blog/1-manage-stress-with-these-straightforward-ideas

Anonymous said...

I almost never leave responses, however after reading a few of
the comments on "FHA Mortgages: What Is a Flip and How Can it Affect you?".
I actually do have a few questions for you
if you tend not to mind. Could it be simply me or do some of these remarks
look like they are coming from brain dead people?

:-P And, if you are writing at additional online
social sites, I would like to follow you. Would you list of all of your social sites like your linkedin profile, Facebook page or twitter
feed?

Also visit my web blog - workouts to jump higher

Anonymous said...

Very good article. I absolutely love this site. Keep writing!


My site ... exercises to increase vertical

Anonymous said...

Once the game is 80% complete you will need to work on the
sound. Finding good outsourcing companies is the
key, as naturally you do not want to lower the quality of the service.

We carry R4 SDHC, DSTT, R4i SDHC, Acekard 2i, EZFlash Vi, M3i Zero,
and now the i - Edge.

Here is my web page :: http://www.qnotes.net/xe/?mid=smalltalk

Anonymous said...

Attractive portion of content. I just stumbled upon your blog and in accession capital to say that I get actually loved account your weblog posts.

Any way I will be subscribing for your augment or even I success you
get admission to persistently fast.

Also visit my web-site; canfriends.com

Anonymous said...

Wow, this paragraph is fastidious, my younger sister is analyzing such things,
thus I am going to convey her.

My webpage ... vertical leap exercises

Anonymous said...

Nice blog here! Also your site loads up very fast! What web host
are you using? Can I get your affiliate link to your host?
I wish my site loaded up as quickly as yours
lol

Also visit my page ... http://successfulthinkersnetwork.com/

Anonymous said...

You're so awesome! I do not think I've truly read a single thing like
this before. So wonderful to discover another person with a few unique thoughts on this issue.
Really.. thanks for starting this up. This website is something
that's needed on the web, someone with a little originality!

Here is my blog post: saffronextractreview123.weebly.com

Anonymous said...

It iis based on computer with electrographic sensor technology.
Say you're doing as well at Chemistry, and as you are doing at Maths Extension 2, then instead of splitting your study time equally between the two (just because they are both worth 2 units each), you should spend more time on Extension 2, simply because it scales higher. Are you a Kansas City Chiefs or Pittsburgh Steelers fan.

my web-site :: Read the Full Post

Anonymous said...

I've been exploring for a little for any high quality articles or weblog posts on this kind of house . Exploring in Yahoo I ultimately stumbled upon this website. Studying this information So i am satisfied to express that I've an incredibly good uncanny feeling I discovered just what
I needed. I so much definitely will make sure to don?
t fail to remember this website and provides it a look regularly.


Also visit my blog ... free xxx porn teenage movies

Anonymous said...

“This is what is the most exciting to me, we play the independent bands that submit to
us (and Music Submit), from all kinds of musical genres and
it is a free format, for both the listener and the bands.
You can find more on the Best call - Recorder and other call recorders here.

So the next time you want to listen to new music
you wouldn’t here on commercial radio, consider Internet radio.



My web site :: internetradio aufnehmen

Anonymous said...

I have learn some excellent stuff here. Certainly
price bookmarking for revisiting. I surprise how so
much attempt you put to make this kind of magnificent informative site.


Here is my website :: cleansing diet plan