HUD ruling on property flipping
FYI,
I just received this from a member of my real estate investment club:
HUD Issues Long-Awaited "Flipping" Rule
Washington - The Dept. of Housing and Urban Development (HUD) has issued a long-awaited rule that is suppose to stop the FHA from financing "property flips".
Starting June 2, 2003, the FHA will no longer insure single-family loans where the underlying property has been resold within 90 days.
Property flipping generally involves speculators who purchase foreclosed home, make cosmetic repairs and quickly sell them - sometimes within days - at grossly inflated prices.
In cases where resale has occurred within 91-180 days, HUD may require additional documentation on renovation efforts, if the value of the property has jumped between 50% to 150%. HUD also plans to impose stiffer requirements in designated areas that are plagued by property flipping.
Under the final rule, only the owners of record may sell a home in a FHA transaction. FHA will not accept "any sale or assignment of the sales contract, a procedure often observed when the homebuyer is determined to have been a victim of predatory practices," HUD said.
Does anyone know what percentage of existing home loans are FHA insured ?
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