Boise Idaho Real Estate News

FHA streamline refinance loan in Boise Idaho – The best way to refinance your home

2013-03-29T14:22:00Z

Are you a resident of Boise Idaho who is struggling with his monthly mortgage installments? In case you had taken out an FHA mortgage loan, you need not worry as the government is about to make refinancing FHA mortgages more affordable and easier for the thousands of borrowers and the homeowners. If you’re a resident of Boise Idaho and you’re looking forward to a refinance, the Idaho FHA streamline refinance is perhaps the best option for you. As a mortgage loan is a secured loan, you have to ensure making timely payments so that you don’t risk losing your home to a forced foreclosure. You might be wondering about the reasons due to which you will get help from the Boise Idaho streamline refinance program.

The benefits of a Boise Idaho FHA refinance program

If you’re looking for better rates on your Boise Idaho mortgage loan, you should know the benefits of the Boise Idaho mortgage refinance program. Here are some of them.

No appraisal needed: One of the best features of an FHA streamline refinance loan is that you don’t require appraising your home in case of getting a mortgage refinance loan. The property values are falling and so badly that the appraisals are coming back with values that are lower than what are being needed to refinance their mortgage loans. When you take help of the streamline refinance loan, you won’t require appraising your home.
Very little paperwork: When you opt for a Boise Idaho refinance program, you don’t require too much paperwork while getting the refinance loan. You don’t require getting all the documentation such as W-2s, paystubs etc that needs to be sent to the loan officer for securing the mortgage loan. Your employment certificate won’t even be checked and verified and this is the way in which you can secure a streamline refinance loan.
You can easily increase or decrease repayment term: Through a streamline refinance mortgage loan, you can easily increase or decrease the repayment term of the loan. In case you’re tired of making the large monthly payments, you can extend the term of the loan in order to lower the monthly payments. And if you’re eager to repay the entire loan sooner, you should refinance into a shorter term loan. This way you can repay the entire loan amount throughout a shorter time and thereby help yourself become debt free sooner.
You can take advantage of current lower rates: Through a mortgage refinance loan, you can easily take advantage of the current lower rates and help yourself save money on the monthly payments. You can use this method as a way of averting the risks of a foreclosure.

Therefore, when you’re wondering about the ways in which you can forestall the chances of a foreclosure in Boise Idaho, you might take the above mentioned points into consideration. Make sure you shop around and get multiple quotes from multiple lenders so that you’re able to choose the best one in the market and make huge savings on it.

Mortgage fraud: Study the review of BBB before modifying your loan

2013-03-27T03:18:00Z

Recently, RE/MAX National Housing Report reveals that out of the 52 metros considered for the survey, 29 of them have reported better home sales trend as compared to February 2012. What is more worth mentioning here is that amongst these metros there are 10 of them that have clocked double-digit February sales figure and topping this list is Boise, Idaho with more than +21.6% of sales.

However, with increasing sales after a terrible housing showdown with almost 46% in the drop of home values, the local Boise market especially Charter Pointe turned out to be a trader’s hotspot, where investors as well as buyers tried to exploit the misgivings of the distressed mortgage borrowers.

This trend of buying and selling distressed/underwater properties after a large-scale foreclosure crisis added to the menace of mortgage fraud. Succumbing to this vicious market practices, a lot borrowers (both current and defaulters) were forced to turn to the Better Business Bureau (BBB), the Federal Trade Commission (FTC) and the state attorney generals for help.

Heeding the vast number of complaints filed against the dubious mortgage relief practices followed by the lenders, this apex consumer protection agency has released an ultimatum with respect to forensic audit and loan modification scams. The problem is so severe that around 600 complaints were registered with the BBB against loan modification programs by the consumers in 2012 alone.

Safe loan modification guidelines

Any borrowers struggling with monthly payments and are considering loan modification as a relief option should abide by the following guidelines:

* Inform fraudulent activities – If you’ve been victimized, then you should report your incident at once with the concerned authorities for help and redress. You can turn to the FTC, BBB or to your State Attorney General for this purpose. You can visit the website, www.ag.idaho.gov of Idaho’s state attorney general to file your complaint or else you may do that at www.ftc.gov.

* Select trustworthy lender – Verify whether or not your lender or the loan modification company has got the BBB rating. You can study the BBB Business Review at www.bbb.org to find out about consumer reviews or feedbacks regarding services offered by the financial services companies such as these and whether or not any complaints have been filed against them.

* Approach for help – Don’t feel lost when looking for help in the event that you’ve been scammed while trying to get your original loan terms modified. So, you may voice your concern with the FTC. In this case, you can call up on the number 1-888-995-HOPE provided by the FTC for consumer help for issues related to home ownership. These calls are attended by the U.S. Department of Housing and Urban Development (HUD) certified housing counseling agencies.

Last but not the least, you must try to enroll in a loan modification program conducted by a licensed mortgage relief company. However, before you work with any such agency, it is important that you verify its license with the National Mortgage Licensing System in order to avoid being scammed.

Contributed by: Valentina R. Allison

Contributed b

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Is the Boise Idaho Real Estate market real?

2013-03-26T00:36:00Z

The Boise Idaho Real Estate market is like many across the country. Listings are selling fast and inventories are low. Is this really the true Boise Real Estate market and will property values continue to rise? I recently listened to Suze Orman who appeared on "Squawk on the Street" and she made a very interesting comment. She said that the shortage of homes across the country have been mostly caused by record low mortgage rates that has encouraged a slew of investors and Idaho First Time Home Buyers that likely would not have purchased homes if mortgage rates had been in the 5-6% range which are normal rates. She went on to say that she would feel better if a shortage of homes was caused by strong job growth instead of record low interest rates.

Suze also mentioned that if one lives in an area where job opportunities are low it is likely that your area will be hurt badly when mortgage rates rise and they will rise. She also said that areas that already have strong job growth will do well with higher interest rates compared to other areas with weak job growth.

If we think about it our country had strong job growth during the Reagan and Clinton administration and mortgage rates were in the 5-6% range. Since the Clinton administration many jobs have been lost across the country due to many political decisions. How do you think the job market fairs in the Treasure Valley of Idaho? We will certainly know the answer to that question when rates do rise and I can assure you they will rise before the end of the 2013 year.

George A. Tallabas III
Associate Broker
RE/MAX West

Boise Real Estate market and others will change again

2012-04-27T20:58:00Z

Since January 1st of 2012 many real estate markets have seen quite a change compared to the past few years. I recently returned from a real estate summit in Chicago where many real estate agents from across the country told me they were short of inventory and were having a hard time finding suitable homes for their ready, willing and able Home Buyers.

Many home buyers that did not purchase a home in the past few years entered the market when mortage rates plunged below 4% for the first time since the great depression. Those buyers were joined by former short sale sellers that sold their homes in 2007, 2008, 2009 and early 2010. It takes 2-3 years to repair ones credit after a short sale. These one time short sale sellers entered the market as buyers the past several months. All these buyers found out they can buy a home and have the payment much lower that rent. The Boise Real Estate market has seen a dramatic change and there is a shortage of quality home listings in just about every price range because of these buyers entering the market.

Will this shortage of quality home listings and near record low mortgages last? The simple answer is no, it simply cannot be sustained. To those that remember the early 1980s it should be easy to see what lies ahead. In the late 70s and early 1980/81 the federal government stimulated the economy to encourage growth. The only problem was the Fed did not raise rates soon enough to cool runaway inflation and the result was 17.5% mortgage rates and 21.5% prime rate. Remember I said the Fed stimulated the economy in the late 70s and early 80s. Sound familiar? I have never seen the Federal Government stimulate the economy in my lifetime more than they have the past several years from Bank bailouts to the clunker program and everything in between. The real estate related incentive programs cost the American Tax Payer billions.

The talk on CNBCs "Squawk on the Street" the past few weeks has been about the need for the Fed to raise rates to avoid runaway inflation. Without a move by the Fed inflation could get out of control like it did in the early 80s and no one wants to see that. Rates need to go up for two reasons. First is to avoid runaway inflation and secondly to help savers whose money has had no earning power the past few years. The BIG question then is not "will the Fed raise interest rates but when and by how much" A half to one percent increase in mortage rates should not have a major impact on real estate markets across the country but anything above that could really cool some smoking hot markets fast.

George Tallabas
Associate Broker
RE/MAX Advantage

HUD Foreclosure Home Search

2010-11-24T21:51:00Z

The government branch known as HUD is foreclosing on more and more homes nationwide and Southwest Idaho is no exception. Starting this month there is a new site to use when searching for HUD Homes. Visit www.HUDHomeStore.com to view all the new listings in Southwest Idaho. This site will give you all the information on the inventory of homes owned by HUD and will announce any special finance programs etc.

Can any real estate agent represent a buyer on a HUD Home? The answer is no. Your real estate agent must be a HUD approved agent who's office has met the requirement for handling HUD transactions. My office is a HUD approved office and I have been selling HUD homes since the mid 90's. If you have any questions as to the procedure in buying a HUD home please email me at george@tallabas.com or call me at 208-880-2333.

Boise Homes for sale

2010-07-22T16:57:00Z

The Boise Idaho Home Market is alive and well and just keeps getting better with the new low interest rates that have hit the market. I warned many a few months ago that mortgage rates would likely rise because of inflation caused by our government pouring billions of dollars into stimulous programs. Historically this kind of practice causes inflation and causes interest rates to rise.

The exact oposite has happened and Boise Home Buyers now have the best of both worlds. The number of Boise Homes for sale at prices not seen in years along with mortgage rates that have not been seen since the 1950's! This week (July of 2010) a mortgage lender quoted me 4.5% for a 30 year loan and 3.75% for a 15 year loan. It does not matter that the $8,000 federal tax credit has expired because the new low interest rates more that make up for it.

If you have any interest at all in becoming an Idaho Home Buyer please don't pass up the incredible opportunity that exists in the Boise Idaho Home Market. This is a rare opportunity in the history of our country that may not repeat itself for decades and decades. By going to the home page of Search Idaho homes you can click the "Search MLS Listings" page and search over 9,000 homes currently for sale in the Boise Idaho MLS Service which includes Ada, Canyon, Owyhee adn Payette Counties.

Good luck and please contact me at 208-880-2333 with any questions.

New FHA Buyer Guidelines >> Mom always told you "Credit Matters"

2010-03-05T22:15:00Z

Idaho First Time Home Buyers and first time home buyers across the country have had it pretty smooth for years when it comes to securing an FHA insured loan. The lower down payments of 3.5% and low mortgage insurance made the loans very attractive. What is mortgage insurance? Mortgage Insurance is a premium buyers pay on their loans which insures the lender against any loss in the event of a foreclosure. With the amount of homes FHA and other private lenders have ended up with the last few years FHA said new changes were required to streamline it's operation and remain solvent while at the same time rewarding buyers that have their financial home in order. Here are the changes FHA has announced:

Up front mortgage insurance goes to 2.25% from the current rate of 1.75%
Minimum down payment increases to 10% for credit scores of 580 and below
For credit scores of 580 and above the down payment remains at 3.5%
Reduces seller allowed contributions from 6% to 3%

The two biggest hits here are increased down payments for credit scores of 580 and below and the reduced seller contribution. Sellers in the past have been allowed to pay 6% of the loan amount to assist buyers in paying closing costs. This new rule will require Idaho First Time Home buyers to pay for more of the up front closings costs to secure an FHA loan. The up front mortgage insurance will go into effect on April 5, 2010. FHA will also seek legislation to raise the annual mortgage insurance premium to a level above the current cap of .55%. This is the amount that is added to loans over the life of the loan.

Bottom line is FHA is rewarding buyers which have taken care of their credit and penalizing those that have not. I have been telling Idaho First Time Home Buyers for years of the importance of taking care of their credit. This is so important and cannot be overstated. If your credit is not good please take measures to work on it and get it improved. You will be rewarded in many ways.

Questions? Call me directly at 208-880-2333

Boise Real Estate market is changing for buyers >> Is your offer safe?

2010-03-05T01:22:00Z

The Boise Real Estate market and the surrounding Treasure Valley has been hit by something that we have not seen for a few years. All of a sudden we have been hit by the "Multiple Offer Effect". Many of the REO's or "Real Estate Owned" by mortgage lenders have hit such low prices that it has attracted many Idaho Home Buyers after the same property and it has caused a bidding war on many of these homes. Not only has the low prices of many of these homes caused such a frenzy but the Federal Tax Credit is in it's final months of existance has caused many Idaho Home buyers to take action because of the looming deadline.

So how do buyers handle this new market that has seen the Boise Real Estate market and the Treasure Valley real estate market change from what was a depressed real estate market flooded with Idaho Short Sales and Bank owned properties to this new multiple offer frenzy? First make sure that when you obtain a list of homes from your Idaho Real Estate Professional that you have your agent call in advance on all listings that say "Active". The reason for this is that many banks will accept offers but the change may not go into the computer for several days later. This is because banks have their own documents that need to be signed but it make take them days to get those documents to the buyer. Regardless, when the banks commit to an offer verbally in their mind the property is sold. I recently phoned on an REO home that was advertised as "Active" in the MLS but had 4 offers on the table and one of the offers had been accepted by the bank one day prior.

I have also recently seen many buyers that have been exposed to great deals on some of these REO homes but still want to "Bargain" because everyone wants a good deal right? The problem with this is that if the home is already a great deal several other buyers will see that it is a great deal as well and will submit reasonable offers. If one or more buyers submit reasonable offers and you submit a low ball offer who do you think will win out? If buyers play this low ball offer game too long they could easily get discouraged and feel they are never going to buy a home. So how do you know if a home is a good deal or not? Have your Idaho Real Estate Professional run comparable sales for the past 6 months on any home your are interested in. This report will show you the average days on the market, average selling prices and average selling prices per square foot. By looking at these reports you can easily see if you are paying a fair market price for any home.

Theare are many Boise ID homes for sale that are still a great buy and these great buys extend across the Treasure Valley. Just do your homework, be patient and smart and you will find one of these great deals that still exist. To get started on your own home search click Boise Real Esate Search

Questions? Call me directly at 208-880-2333

Boise Home Sales benifit from national drop in housing sales

2010-02-27T17:46:00Z

Boise ID homes for sale benefit from from a drop in the National home sales? No I did not bump my head up against the curb. This week the National Association of Realtors announced the sale of previously occupied homes fell for the second month in a row in January, 2010. The sales of previously occupied homes fell 7.2% surprising economists and reafirming the glut of homes on the market and the lack of jobs.

So why is bad economic news good for Boise Home sales? Any weak ecomic news and especially real weak economic news confirms the economy is weak and still needs to be stimulated with lower interest rates. Yes, "bad ecomomic news" strengthens the bond markets and puts downward pressure on mortage rates. Simply put, when enough bad economic news is reported the Federal Reserve will lower interest rates in an attempt to stimulate a weak economy. Mortage rates were sitting at sub 5% levels for weeks and just recently surpassed the 5% mark which is still awesome. This surprising economic news regarding Idaho home sales assures us at least for the immediate future mortgage rates should remain very stable and may even go lower if more bad economic news is reported, ie: durable goods orders, auto sales, retail sales, etc.

I have been saying for weeks and months that this is an incredible time to buy real estate in Idaho. When you add the lowest mortgage rates in years, the Federal Tax Credit and the price of homes retreating to levels seen in the early 90's it is simply one of the best times to buy a home this country has ever seen. Speaking of the Federal Tax Credit; the deadline for qualifying is fast approaching. Go to My Federal Tax Credit to read more about this tax credit which benefits Idaho first time home buyers and second time home owners.

The Boise Real Estate Market still offers great opportunities but waiting too long may prove costly to procrastinators. If you need assistance with with financing or any other part of the home buying process contact your Boise Realtor

Boise ID Home Sales >> Micron Solar alliance could help

2010-02-21T18:23:00Z

Boise ID Home Sales could benefit from a recent announcement from Boise based Micron Technology that it has formed a partnership with Australian company Origin Energy. Origin generates and retails energy to about 3 million customers.

Origin Energy produces commercial solar panels using a new silicon water called "silver" technology at a facility in Austrailia. The company announced in January of this year it has been testing the manufacturing of these unique chemically etched silicon cells at Micron in Boise Idaho according to sources close to the company. Australia National University experts say the payback for investing in solar power could drop from 20 years to to 5 once the technology is perfected and in production.

"It was clear that combining our semiconductor manufacturing expertise with Origin Energy's solar experience could result in a powerful partnership," Micron Chairman and CEO Steve Appleton and Chief Operating Officer Mark Durcan said in a memo.

A year ago Micron announced its interest in converting idle buildings in Boise and Nampa to manufacture solar panels and high-efficiency lighting components known as LEDs. A few months later, it began developing LED manufacturing facilities with $5 million in state and federal stimulus dollars.

"One of the keys to solar is a lot of the customers are big customers," said Mike Howard, a senior analyst with iSuppli and former Micron employee. Origin makes the technology and could, ostensibly, use it in its power generation. Even while Micron's involvement in solar and LEDs is far behind its memory operations, Howard expects both of them to grow.

"Micron isn't just getting into this to keep people busy," Howard said. "They want this to be a significant revenue generator." Hundreds of millions of dollars Micron invested in its now-obsolete silicon memory plants in Boise offer it a chance to develop state of the art manufacturing on both solar and LED technology, he said.

Micron Technology announced that a profit in December of 2009 of $200 million is due to an impoved market for computer chips. Micron once employed more than 11,000 people in the Treasure Valley and was Idaho's largest private employer. Today it has about 5,000 employees. The improved computer chip market and the new partnership with Origin Energy could be what the Boise Real Estate and Treasure Valley real estate markets need. A the unemployment levels in the valley could see significant reversals if Micron and Hewelett-Packards renewed profits prove to be consistent for the months to come.

Boise Real Estate >> Could benefit from HP announcement

2010-02-21T00:30:00Z

Boise Idaho Home Sales could see a shot in the arm if recent announcements by Hewlett-Packard provide stability and even possible growth in the Boise job market. HP recently announced first quarter net revenues of $31.2 billion, up 8%, or $2.4 billion from a year earlier.

"HP is well-positioned to outperform the market," said Mark Hurd, HP chairman and chief executive officer. "The strength of our portfolio, leaner cost structure and accelerating market momentum give us the confidence to raise our full-year outlook."

"Solid performance across teh business and disciplined execution on our cost initiatives contributed to strong growth in cash flow and EPS," said Cathi Lesjak, HP executive president and chief financial officer. "We will continue to invest for growth and leverage our scale and global position to take advantage of an improving demand environment."

HP first opened for business in Boise Idaho in 1973 and moved to its' campus off of Chinden Blvd. in 1976 when it opened it's printer division which as part of a growing high-tech field. HP employed 4,000 at it's peak and currently employees approximately 3,000 employees. HP's presence in Boise Idaho helped launch a tech industry that now accounts for 11% of the Treasure Valley's work force.

If this recent growth by HP is any sign of a true tech recovery the Treasure Valley could see continued job improvement from a tech sector that has been hard hit by the recession. The Treasure Valley has seen record levels of Idaho Short Sales and Idaho Foreclosures which have caused real property values to plummet to levels seen in the late 80's to early 90's.

$8,000 and the $6,500 Federal Tax Credit programs expire April 30, 2010

2010-02-02T02:25:00Z

Boise Real Estate home buyers and the entire Treasure Valley was recently informed about the extension of the $8,000 Federal Tax Credit and the new $6,500 credit for home sellers. It has now been extended through the end of June, 2010. Idaho homebuyers must sign a real estate purchase and sale contract before April 30, 2010 and close by June, 2010. The income limits have now been raised: Single buyers can now earn up to $125,000 and still get the full credit while married couples can earn a maximum of $225,000.

The new current bill also makes more homeowners eligible to claim the credit on their income taxes. Idaho First-time buyers, those who have not owned a home in the past three years as defined by HUD still qualify for an $8,000 rebate. Now, those who want to trade up also qualify. Those who have owned a home and have occupied it as their primary residence for at least five years out of the last eight can claim a $6,500 tax credit if they close on a new purchase by the end of June, 2010.

The expansion of the tax credit comes as a big surprise and gives many more the opportunity to take advantage of the great home prices seen in the Boise Idaho Real Estate market. With interest rates sitting at amazingly low rates there has rarely been a better time to buy a home.

If you have any questions regarding the tax credit program please contact your CPA or real estate attorney. If you dont' have a CPA or real estate attorney let me know and I will give you some great names.

Want to start your Idaho Home Search now? go to Idaho Real Estate Search

Fannie Mae to pay buyers 3.5% to buy a foreclosed home!

2010-02-02T01:53:00Z

Boise Idaho Real Estate home buyers and the entire state of Idaho just got a big boost. Fannie Mae just announced a program where they will pay a 3.5% incentive to any Idaho Home Buyer that purchases and closes on a Fannie Mae owned home between January 28, 2010 and April 30, 2010. Buyers purchasing in this time frame may receive up to 3.5% of the final sales price for:

Buyers closing costs
The purchase of new Whirlpool appliances, a the buyer's discretion, up to the maximum 3.5%
A mix of closing costs and appliances, at the buyer's discretion, up to the maximum 3.5%

For Idaho Home Buyers to be eligible for this incentive:

Offers must be accepted on or after January 28, 2010
Property sales must close before May 1, 2010
Buyer's must occupy the home as their primary residence and investors are excluded

Fannie Mae sold 89,691 foreclosed homes in the third quarter of 2009, up from 39,864 in the previous quarter it said in it's most recent quarterly filing. Fannie Mae had 72,275 foreclosed homes called REO's or "Real Estate Owned" homes as of September 30th, 2009.

Fannie Mae has been trying to trim it's inventory of foreclosed homes, an inventory that has risen amid a three-year housing slump in which home prices have plummeted. The move is designed to spur sales in a still-weak housing market said Terry Edwards, Fannie Mae's executive vice president of credit portfolio management.

This announcement by Fannie Mae is in addition to the $8,000 and $6,500 Federal Tax Credit that is scheduled to also expire on April 30th of 2010. This is simply a win-win environment for Idaho Home Buyers considering the low mortgage rates that are still available.

How do you find Fannie Mae REO properties? Fannie Mae lists all of it's REO homes at www.HomePath.com and it is a site that is easy to navigate through. Once you have located a Fannie Mae REO that catches your attention you need good representation that is representing YOU ONLY in the transaction. To view one of these Fannie Mae homes email me at george@tallabas.com or call me directly at 208-880-2333 to schedule a showing.

Idaho Short Sales >> Where are we?

2010-01-30T23:32:00Z

Idaho Short Sales

Now well into 2010 where are we with Short Sales in Idaho ? Idaho Short Sales are alive and well and more than 85% of all listings in the Intermountain Multiple Listing Service of southwest Idaho are either short sales or Idaho Foreclosures also known as REO's or "Real Estate owned" by banks. In a recent report Idaho was one of top 5 states around the country that had an 18% or higher increase in the amount of short sale and REO listings in 2009. Until the country's employmet picture improves one cannot expect the level of Idaho Shorts Sales and REO's to cool off.

So what should consumers do? If you are facing a Short Sale in Idaho it is important to note what your options are and where you need to turn for assistance. All Short Sale Realtors in Idaho are created equal right? WRONG! In 2008 the Idaho Statesman wrote an article about the importance of using an Idaho Certified Short Sale Specialist. I became a Certified Short Sale Specialist in 2008 by going through extensive training. In addition to having 15 years experience in Idaho Short Sales my Short Sale listing partner, Yuri Blanco and I attended a seminar in Boise where the speaker was Lee Honish who had been a loss mitigator with Indi Mac for 17 years. Lee gave us valuable insight into how banks think when working with short sales which was invaluable.

What does this mean to you? I will give you a little example: There is a lot of free data available to licensed Realtors via the Intermountain Multiple Listing Service. Much of this valuable data is not used properly by the average Realtor. Most Realtors think that when the banks make up their minds that is it and we need to accept it. This could not be further from the truth. I advised my listing partner, Yuri Blanco recently to use a market graph from the MLS service and add it to an email she had composed. The result was that she convinced Wells Fargo to reduce what they had called their final offer by $20,000!

Just last week one of my clients was anxiously waiting for an answer from Flagstar on a second mortgage. The first mortgage company had already given us approval and the second lien holder, Flagstar was taking it's time in giving us a decision. I used the graphs from the MLS service and sent several creative and factual emails to Flagstar over a period of a week and a half. At the end of last week we received written approval from Flagstar and the entire approval time frame to obtain approval from the first lien holder and the second from Flagstar was a total of 6 weeks. Of course we cannot assure you of a 6 week approval but my point is that an aggressive Certified Short Sale Specialist knows what can and cannot be done with working with mortgage lenders and will do everything we can to negotiate and use all the tools available to us.

Facing a short sale in Idaho? go to Idaho Short Sale Assistance and then call me at 208-880-2333 for your private consultation.

FHA 90 Anti-Flipping rule gets a one year waiver >> Good news for investors and buyers

2010-01-19T01:49:00Z

FHA recently announced a temporary (1 yr) relaxation of its "90-day" anti-flipping rule, which prohibits the use of FHA insured financing if the contract for sale was executed within 90 days of the seller's acquisition of the property. What this rule said is that if an investor purchased a rehab home, remodeled it and wanted to resell it, they could not use FHA funds until a 90 day period had expired from the time the investor took title.

This waiver, which takes effect on February 1, 2010 and is for one year is limited to those sales meeting the following criteria:

1. All transactions must be arms-length, with no identity of interest between the buyer and the seller or other parties participating in the sales transaction. Some ways that the lender can insure that there is no inappropriate collusion or agreements between the parties is to assess and determine the following:

The seller holds title to the property;
LLC's, corporations, or trusts that are serving as sellers were established and are operated in accordance with applicable state and federal laws;
No pattern of previous flipping activity exists for the subject property, as evidenced by multiple title transfers within a 12-month time frame (chain of title information for the subject property can be found in the appraisal report.
The property was marketed openly and fairly, via MLS, auction, For Sale by Owner offering, or developer marketing (any sales contracts that refer to an "assignment of contact of sale," which represents a special arrangement between seller and buyer may be a red flag).

2. In cases in which the sales price of the property is 20 percent or more over and above the seller's acquisition cost, the waiver will only apply if the lender:

Justifies the increase in value by retaining in the loan file supporting documentation and/or a second appraisal which verifies that the seller has completed sufficient legitimate renovation, repair, and rehabilitation work on the subject property to substantiate the increase in value or, in cases where no such work is performed, the appraiser provides appropriate explanation of the increase in property value since the prior title transfer; and
Orders a property inspection and provides the inspection report to the purchaser before closing. FHA-approved inspectors or 203(k) consultants is not required. The inspector must have no interest in the property or relationship with the seller, and must not receive compensation for the inspection from any party other than the lender. Also, the inspector may not compensate anyone for the referral of the inspection. Additionally, the inspector may not receive any compensation for referring or recommending contractors to perform any repairs recommended by the inspection, and may not be involved with performing any repairs recommended by the inspection.

FHA finds that by eliminating the 90 day resale restriction for buyers it will give FHA a greater opportunity to dispose of it's single family REO properties in a way that maximizes return to the FHA's mortgage insurance fund; also, permitting buyers to use FHA-insured financing to purchase other bank-owned properties, or properties sold through private sales for resale, will help create market conditions that will allow homes to resell as quickly as possible, thus helping to stabilize real estate prices as well as helping to stabilize neighborhoods and communities where foreclosure activity has been high.