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WASHINGTON – In an effort to continue stabilizing home values and improve conditions in communities experiencing high foreclosure activity, Acting Federal Housing Administration Commissioner Carol J. Galante today extended a temporary waiver of FHA’s anti-flipping regulations through 2012.  Read FHA’s anti-flipping waiver.

“This extension is intended to accelerate the resale of foreclosed properties in neighborhoods struggling to overcome the possible effects of abandonment and blight,” said Galante.  “FHA remains a critical source of mortgage financing and stability and we must make every effort to promote recovery in every responsible way we can.”

With certain exceptions, FHA rules prohibit insuring a mortgage on a home owned by the seller for less than 90 days.  In 2010, however, FHA temporarily waived this regulation through January 31, 2011, and later extended that waiver through the remainder of 2011.  The new extension will permit buyers to continue to use FHA-insured financing to purchase HUD-owned properties, bank-owned properties, or properties resold through private sales. It will allow homes to resell as quickly as possible, helping to stabilize real estate prices and to revitalize neighborhoods and communities.

The extension announced today is effective through December 31, 2012, unless otherwise extended or withdrawn by FHA.  All other terms of the existing Waiver will remain the same.  The Waiver contains strict conditions and guidelines to prevent the predatory practice of property flipping, in which properties are quickly resold at inflated prices to unsuspecting borrowers.  The Waiver continues to be limited to sales meeting the following conditions:

• All transactions must be arms-length, with no identity of interest between the buyer and seller or other parties participating in the sales transaction;
• In cases in which the sales price of the property is 20 percent or more above the seller’s acquisition cost, the Waiver will apply only if the lender meets specific conditions, and documents the justification for the increase in value; and
• The Waiver is limited to forward mortgages, and does not apply to the Home Equity Conversion Mortgage (HECM) for purchase program.

 Since the original waiver went into effect on February 1, 2010, FHA has insured nearly 42,000 mortgages worth more than $7 billion on properties resold within 90 days of acquisition.

FHA research finds that in today’s market, acquiring, rehabilitating and reselling these properties to prospective homeowners often takes less than 90 days.  Prohibiting the use of FHA mortgage insurance for a subsequent resale within 90 days of acquisition adversely impacts the willingness of sellers to allow contracts from potential FHA buyers because they must consider holding costs and the risk of vandalism associated with allowing a property to sit vacant over a 90-day period of time.

The best locations to flip are DuPage, Northern Will, Southern Lake  and Eastern Kendall.

We have found homes in these area’s have low market times if they are priced correctly and sell in less than 100 days.

Go to this link for more info:

http://www.moneypress.com/fha-extends-suspension-90-day-anti-flipping-waiver.htm

Our guest blogger today is Raphael Bostic, Assistant Secretary for Policy Development and Research

As consumers flock to the shopping malls this holiday season, have you thought about shopping for…data?

I’m a numbers guy. To me, data can tell a story about what’s happening in the real world and that, in turn, can drive our decisions on a whole host of issues. Obviously, this holiday season finds a lot of folks worried about the economy and the housing market. Never before has there been a greater demand for economic and housing data among state and local leaders, businesses, researchers and even students. But now, this kind of data is only a click away!

Today, the U.S. Department of Housing and Urban Development (HUD) unveiled a new website that consolidates a wide variety of economic and housing market data at the regional, state, metropolitan area and county levels. Using information from the Census Bureau, Labor Department, State and Local governments, housing industry sources, as well as HUD’s own field economists, the new website employs interactive maps that allow visitors easy access a variety of reports – from a region-wide look at employment and housing activity to individual county-level figures on population trends, rental activity and vacancy rates.

This is a powerful new tool that’s easy to use and offers the public a remarkable look at their local economic and housing markets. This is precisely why this site will be so helpful to state and local leaders, developers, the real estate industry, and the general public who need the latest available data on their markets.

To view the reports mentioned above for a each region of the country, or for particular states, metropolitan areas or even counties, visit hud.gov/datamap.

• The rate of increase ranged from 5% in the West to 14.5% in the Midwest
• Northeastern home sales were up by 10.1%
• Southern residential purchases sprang up by 10.6%.
• Interest rates are the lowest in recorded history @ 4.35%.
• Novice homebuyers flexed their muscles and purchased 32% of all homes sold in September.
• Investors captured an 18% share of the market.
• The remaining 50% were snapped up by “repeat buyers”—perhaps “down-sizers” and “up-graders”.

In fact, the average monthly mortgage payment, for recently purchased housing is several hundred dollars lower now–than 5 years ago. To put it another way, buyers can get more house for the money now, than they could 5 years ago—during boom times.

Is this something that potential home buyers are aware of in your market?

Du Page County is the hot spot for buying and selling. Keep your eye on this area the next few months.

Call me for my hot list.

Christian 630-484-5534

Following a sharp drop in the months immediately after expiration of the home buyer tax credit, pending home sales have modestly risen, according to the National Association of Realtors®.

The Pending Home Sales Index,* a forward-looking indicator, rose 5.2 percent to 79.4 based on contracts signed in July from a downwardly revised 75.5 in June, but remains 19.1 percent below July 2009 when it was 98.1. The data reflects contracts and not closings, which normally occur with a lag time of one or two months.

Lawrence Yun, NAR chief economist, cautioned that there would be a long recovery process. “Home sales will remain soft in the months ahead, but improved affordability conditions should help with a recovery,” he said. “But the recovery looks to be a long process. Home buyers over the past year got a great deal, and buyers for the balance of this year have an edge over sellers. For those who bought at or near the peak several years ago, particularly in markets experiencing big bubbles, it may take over a decade to fully recover lost equity.”

Yun added, “Affordability could reach a generational high in the second half of this year because of rock-bottom mortgage interest rates, helped partly by the Fed’s very accommodative monetary policy. The loan underwriting standards are tighter, but home buyers can improve their chances of getting a loan by staying well within their budget.”