New HUD Policy Created to Allow Quicker Foreclosure Re-sales!

New HUD Policy Created to Allow Quicker Foreclosure Re-sales!

Effective February 1, 2010 the Department of Housing and Urban Development
(HUD) will relax FHA rules that prohibit insuring mortgages on homes that
are owned by the seller for less than 90 days - a move that could help
expedite the rehabilitation and resale of foreclosure properties.

In a housing market where tighter lending requirements have made FHA
financing the only option for some buyers, this 90-day policy has (1) kept
some homebuyers from being able to purchase affordable homes and (2)
prevented the quick resale of foreclosed properties, which affects the
ability of communities to stabilize and rebuild.

Research has shown that the buying, fixing, and reselling of foreclosed
properties is often achieved in less than three months time.

The temporary waiver, which will expand access to FHA mortgage insurance to
many, will be in effect for a period of one year, unless extended or
withdrawn by the FHA. With this in mind, now may be an excellent time to
contact clients who have recently purchased a foreclosed property and those
who may be on the fence about purchasing a foreclosure as a short-term
investment.

"FHA borrowers, because of the restrictions we are now lifting, have often
been shut out from buying affordable properties," said FHA Commissioner
David H. Stevens. "This action will enable our borrowers, especially
first-time buyers, to take advantage of this opportunity."

To ensure FHA borrowers are protected from inflated prices, the policy has
certain restrictions, including:

* All transactions must be arms-length and there can be no identity of
interest between the buyer and seller.
* If the sales price of the property is 20 percent or more above the
seller's acquisition cost, the lender must meet specific conditions for the
waiver to apply.
* The waiver is limited to forward mortgages, and cannot be used under
the Home Equity Conversion Mortgage (HECM) purchase program.

You can read the full text of the waiver on HUD.gov.

Rob Alley, Realtor at Keller Williams Charlottesville
540-250-3275 (cell)
roballeyrealtor@gmail.com
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