What A Flipping Mistake!

By
Real Estate Broker/Owner with Bristar Realty (Realtor/Attorney) BRE: 01005471

                                                                            

WHAT A FLIPPING MISTAKE!                                                   

I suffered an embarrassing mistake in 2010.

While chatting with an investor/client,  I was show-boating my knowledge of the anti-flipping rules.  This fellow will surely give me oodles of business, I thought, when he cleared his throat, signaling an interruption.   I was in the zone and my words were flowing like freshly melted snow down river. 

"Excuse me Brian..."

"Yes?"   

"It's just....I think the FHA is suspending the anti-flipping rule."

Gulp. 

The long-standing anti-flipping rule was no longer long-standing.   This is an important item for any investor to know.  It's a rule that prohibits the FHA from insuring mortgage on property bought and sold in the space of 90 days.  For buyers hoping to flip a property, the rule is designed to prevent foreclosures from ending up as FHA inventory, thereby suffering a ding to its insurance funds.

Many investors are able to buy, rehab and list a property within a couple of months.  But if buyers are unable to qualify for a 3.5% down payment under FHA guidelines, the pool of potential investors would swiftly evaporate.

I could feel the blood rush to my face in embarrassment.   Blushing shouldn't beseige a man of my age, but I have little say in matters of physiology.

 My next words highlighted my awkwardness, "Um, you don't say?"   

Obviously, he do say!

"It's just, the last time I checked...."   He understood the trail in my sentence and picked up the slack. 

"Well, Brian, I believe the rule is being revised beginning February 1. (2010)"

Really?  Another stupid utterance not intended as a real question. 

"Yes, really!" 

My transgression was based on a development announced only days earlier.  Still, I'm "suppose" to be the expert.

THE 2011 (NEW) SUSPENSION OF THE ANTI-FLIPPING RULE                           

Fast forward to the present.   You won't catch me making the same mistake twice.  No siree. 

HUD has now extended the suspension of the anti-flipping rule, making investors again likely to bid for foreclosed and REO properties.    Stepping up efforts to liquidate the volume of foreclosures, buyers may continue to avail themselves of the affordable 3.5% FHA down payment.  The waiver, however, does not apply to reverse mortgages;  properties that are sold at more than 20% of the acquisition cost, or transactions not conducted at arms-length.  

The full scope:  http://www.hud.gov/offices/hsg/sfh/currentwaiver.pdf

This is great news for investors, buyers, and the Realtors who represent them.

Brian L. Sirota, Esq., Broker/Attorney, BriStar Realty, Orange County, California

Posted by
  • Brian L.  Sirota, Esq.  
  • Broker/Realtor/Attorney
  • BRISTAR REALTY
  • Orange County, California 
  • (877) 641-6964  
  • (714) 501-7660
close

This entry hasn't been re-blogged:

Re-Blogged By Re-Blogged At
Spam prevention

Accessibility option: listen to a question and answer it!

To submit the form,
drag the tshirt to the circle on the side.

Type below the answer to what you hear. Numbers or words, lowercase:

Topic:
ActiveRain Community
Location:
California
Groups:
BananaTude
Investors
Orange County Real Estate
Real Estate Law
The Art Of Marketing You
Tags:
antiflip
flipping
investor
buyer
foreclosure
realestateowned
fha
hud

Comments 4 New Comment

Anonymous
Post a Comment
Spam prevention

Accessibility option: listen to a question and answer it!

To submit the form,
drag the umbrella to the circle on the side.

Type below the answer to what you hear. Numbers or words, lowercase:

Show All Comments
Rainmaker
538,391
Gretchen & Mel Ahrens
ColumbiaGorgeFSBO.com

I agree with you - Learning from mistakes often provides the very best experience.

February 09, 2011 01:39 PM
Rainer
402,211
Brian L. Sirota, Esq.
For Solutions: (714) 501-7660
Bristar Realty (Realtor/Attorney)

Mel/Gretchen, thanks for Stopping by.

February 09, 2011 03:39 PM
Rainmaker
1,076,487
Bill Burchard
Broker, Realtor - Murrieta Homes For Sale, Califor
3B Realty: 951-347-3818, CA

Hey Brian. GREAT post! Very timely, too. Suspension of the anti-flipping rule (and it’s extension) is great news for investors and a lot of home buyers.

Suggested for feature!

February 09, 2011 05:11 PM
Rainer
402,211
Brian L. Sirota, Esq.
For Solutions: (714) 501-7660
Bristar Realty (Realtor/Attorney)

Thank you Bill.   I really appreciate you suggesting it be featured.

February 09, 2011 07:03 PM
Anonymous
Post a Comment
Spam prevention

Accessibility option: listen to a question and answer it!

To submit the form,
drag the woman to the circle on the side.

Type below the answer to what you hear. Numbers or words, lowercase:

Show All Comments
Rainer
402,211

Brian L. Sirota, Esq.

For Solutions: (714) 501-7660
Ask Your TOUGHEST Question!
*
*
*
Spam prevention

Accessibility option: listen to a question and answer it!

To submit the form,
drag the leaf to the circle on the side.

Type below the answer to what you hear. Numbers or words, lowercase:

Additional Information