Over the past couple of years since “Short Sales” have been the hot topic in the real estate market I’ve been contacted by several mortgage brokers and investors/firms looking to get access to my clients who need to sell properties and who are upside down in their homes value.

These people offered to help my clients by making an offer on their home. (Banks are only willing to talk about a short sale if we have an offer) They will negotiate the short sale on behalf of the client and purchase the home (if they can get a good deal).

I was quite interested when I heard this the first time, because I know how hard it can be to find a buyer who is willing to wait 3-9 months before they can close on a home (these mortgage brokers who weren’t making money by financing homes now wanted to make a living from people’s hardship) It was pitched to me that I would make the commission on the listing side and on the buying side. After the bank approved the sale I would then market the home below fair market value to find a buyer quickly. (Banks typically give us 30-60 days to close the transaction once they have given us their approval) I would then get the commission on the listing side and maybe the buying side for the investor. WOW that could be as much as 12% commission for one deal! Who wouldn’t be interested in that?! (not me if it’s hurting someone)

After further questioning, I discovered these “white knights” looking to help my sellers get out of their homes make offers at 65% below fair market value minus repairs and tie up the home for several months negotiating with the bank. They had no intention of buying the home unless they can sell the bank on accepting this lowball offer, then finding an end buyer who will pay market value for the home. Once they find an end buyer they use a “Hard Money Lender” to close on the property, then resell the home the same day to the end buyer making a huge profit.

If no end buyer can be found or the bank doesn’t accept the low ball offer the seller could end up in foreclosure, plus during the time the home was under contract with the investor any real buyers miss out on these homes. These investors are not helping the turn around of the real estate market they are just taking advantage of desperate sellers and banks, ultimately you and I as tax payers are fitting the bill for these guys because its our tax paying money that has been bailing out the banks from their losses.

Example: At the end of last year a client of mine made an offer on a home in Crescent Heights, we received a counter offer where the sellers name was scratched out and an investment firms name was in its place. The investor had gotten the seller to sign a contract which allowed the investment firm to control the sale as described above. We did come to terms on a sales price after going back and forth for a couple of days. At the closing the investor walked away with over $13,000. The seller could still be on the hook for any unpaid balance of the mortgage.

I feel the banks and/or the government need to set rules to prevent these investors from taking advantage of our down turned real estate market.

This is a great change, in the past FHA required a home be owned for at least 91 days before a buyer using FHA financing could write an offer. This prevented good buyer getting the home they wanted if they needed to use FHA financing to buy a home.

Example: An investor purchased a home at a foreclosure sale at 20% below market value, after closing on the property the investor put the home on the market, at market value to make a profit. Only buyers who were paying cash or using conventional financing could buy the home right away. This prevented FHA buyers being able to bid on the home unless the investor held the property for 91 days before accepting an FHA offer. With the new changes a FHA buyers will be able to make an offer right away.

There are some other conditions like: The investor can’t mark up the property more than 20% unless they had work done to the home and provide receipts. For more info check out http://www.hud.gov/offices/hsg/fhahistory.cfm

OK, there are some interesting changes which will take pace later this year to FHA financed loans. The government has been facing higher defaults with FHA insured loans over the past couple of year’s, in order to build up reserves they are making some changes.

If you are looking to buy a home using FHA financing the window to closing and avoid higher fees is closing quick.

Also, I hear the government is going to adjust the key interest rate at which they loan money to banks this will adjust the interest rate you will be able to get when buying a home. Just a 1% jump in interest rates, is like seeing a 10% increase in the price of a home. My advice would be don’t delay, if you find a home you love and plan on living there for 3+ years you should buy now.

Future changes with FHA:

FHA financing requirements, change from time to time to match the market and the risk of loss. Since the collapse of the financial markets in 07,08 FHA financing has been the primary source for home buyers to obtain a real estate loan with a low down payment. This is the reason for the changes you are about to see.

Imagine the market slips by another 5-10% and the unemployment numbers go about 10%, many borrowers who used FHA financing in the past 3-4 years could find them selves in foreclosure or needing to do a short sale to get out of their home because they have little to no equity in their home. FHA being the #1 source for finding for these low down payment loans could find them selves in a very bad situation. The tax payers could also be facing another bailout. So in order to protect government backed loans and us the tax payers these are the latest rounds of changes.

Initial up-front MIP increase will be raised by.50 to 2.25% will be released in a Mortgagee Letter tomorrow Jan 21 and will go into effect in the spring (example $200,000 loan will now costs the borrower $1,000 more, this is to help cover the losses already seen by FHA)

Borrower will be required to have a min credit score of 580 to qualify for 3.5% down, if score less than 580 must have 10% down this will go into effect in early summer

Seller concessions will be reduced from 6% to 3%, will be posted in February will go into effect in the early summer.

Lender performances, Neighborhood watch will be available on HUD website on February 1

Enhanced monitoring of lender performance, implement credit watch termination through lender underwriting ID in addition to origination ID will be released in Mortgagee Letter tomorrow Jan 21 and is effective immediately

Pursuing authority to increase enforcement on lenders to assume liability for all the loans they originate and underwrite

Legislative authority permitting HUD flexibility to establish areas of review and termination to withdraw originating and underwriting approval for lender nationwide on the basis of the performance of its regional branches.

FHA financing is still the only program that allows a borrower to purchase a home with 3.5% down payment. These changes could effect your ability to qualify for a loan so check with your lender to make sure you will meet the minimum requirements before you make an offer.

WASHINGTON – Jan. 25, 2010 – At-risk homeowners with FHA-insured mortgage loans are now eligible for loss mitigation assistance before they fall behind on their mortgage payments. Previously, homeowners weren’t eligible until they missed payments.

The Helping Families Save Their Home Act of 2009 expanded FHA’s authority to use its loss mitigation tools to assist FHA borrowers avoid foreclosure, including those facing “imminent default” as defined by the Secretary.

“Loss mitigation assistance is beneficial to both borrowers and FHA because it helps borrowers retain their homes while protecting the FHA insurance fund from unnecessary losses,” says FHA Commissioner David Stevens. “Now servicers will have additional options for those borrowers who seek help before they go delinquent.”

The change is effective immediately under FHA’s Home Affordable Modification Program (FHA-HAMP) (http://www.hud.gov/offices/hsg/sfh/nsc/rep/hampfact.pdf) with the following rules:

• FHA defines “FHA borrower facing imminent default” to be current or less than 30 days past due on the mortgage obligation and experiencing a significant reduction in income or some other hardship that will prevent him or her from making the next required payment on the mortgage.

• A forbearance agreement allows the loan servicer to postpone, reduce or suspend payments due on a loan for a limited and specific time period.

• FHA-HAMP allows qualified FHA-insured borrowers to reduce their monthly mortgage payment to an affordable level by permanently reducing the payment through the use of a partial claim combined with a loan modification. The partial claim defers the repayment of a portion of the mortgage principal through an interest-free subordinate mortgage that is not due until the first mortgage is paid off. The remaining balance is then modified through re-amortization and, in some cases, an interest rate reduction.

The borrower must be able to document the cause of an imminent default, which may include, but is not limited to, one or more of the following types of hardship:

1. A reduction in or loss of income that was supporting the mortgage loan, e.g., unemployment, reduced job hours, reduced pay, or a decline in self-employed business earnings. A scheduled temporary shutdown of the employer, (such as for a scheduled vacation), would not in and of itself be adequate to support an imminent default.

2. A change in household financial circumstances, e.g., death in family, serious or chronic illness, permanent or short-term disability.

Loan servicers must document the basis for its determination that a payment default is imminent and retain all documentation used to reach its conclusion. The servicer’s documentation must also include information on the borrower’s financial condition.

Additional information and guidance can be found on HUD’s website. (www.hud.gov).

Jan. 25, 2010 – For more than a year, the government pulled out the stops to revive homebuying by driving down mortgage rates.

Now, whether the housing market is ready or not, the government is pulling out.

The wind-down of federal support for mortgage rates, set to end in two months, is a momentous test of whether the Obama administration and the Federal Reserve have succeeded in jump-starting the housing market and ensuring it can hold its own. The stakes for the economy are massive: If the market again falls into a tailspin, homeowners could face another wave of trouble, and it would deal a body blow to President Obama’s efforts to get the economy on track.

Keeping the mortgage rates at historic lows, which required a commitment of more than $1 trillion, was viewed within the administration as a central plank of the economic strategy last year, senior officials said. Though the policy did not attract as much attention as rescue efforts to bail out banks, it helped revitalize homebuying in some parts of the country and put money in the pockets of millions of homeowners who were able to refinance into lower monthly payments, the officials added.

“We did what we thought was necessary to stabilize the market, but we don’t think the government should continue special efforts forever,” said Michael S. Barr, an assistant secretary at the Treasury Department. “As you bring stability, private participants come back in. We do expect this now that the market has stabilized. I’m not going to say there will be no effect on rates, but we do think you are seeing market signs and market signals that there should be an orderly transition.”

A few federal officials and many industry advocates disagree, saying the government is exiting too soon. They offer dire warnings of higher rates and a slowdown in home sales. Fed leaders say they will end a marquee program supporting the mortgage markets in March. Obama’s economic team, led by Treasury Secretary Timothy F. Geithner, has decided not to replace it and has been shutting down its own related initiatives.

Over the past year, these programs have enabled prospective homebuyers to get cheap loans, helping those buying and selling property as well as those eager to refinance existing mortgages. If the end of the initiative drives up interest rates, say from 5 percent to 5.5 percent, homeowners could be deterred from refinancing, industry officials say. A sharper increase in rates could make homes too expensive for many buyers, forcing them from the market and causing the recent pickup in home sales to stall.

“Mortgage rates are the lifeblood of the housing market, and we have cautioned the Fed about the sudden stoppage of this program,” said Lawrence Yun, chief economist of the National Association of Realtors.

But senior government officials said it could be hard to reverse course without damaging the credibility of the Fed and the administration. If the government loses the trust of the financial markets, preparing them for policy changes could be tougher, possibly resulting in economic disruptions. The officials said they also worry that the mortgage market is becoming overly dependent on federal support, inserting the government too deeply into private enterprise.

Only a new crisis would be able to persuade the administration and the Fed to change their minds, officials said.

“This is a worthy experiment to see if they can begin exiting after providing an unprecedented amount of money to one sector of the economy,” said Mark Zandi, chief economist at Moody’s Economy.com. “It’s a close call, though. I can see why they are debating it.”

The Fed’s policymaking body sets a key interest rate at periodic meetings, which in turn influences rates for all kinds of loans. But mortgage rates also are shaped by the health of the market financing these loans.

Banks typically create giant pools of home loans and turn them into securities that can be traded on the open market. When the system is working, many investors buy these mortgage-backed securities, providing a stream of money for lenders so they can make loans at relatively cheap rates. But the trading of these securities seized up when the financial crisis struck and panicked investors. Government officials feared that the mortgage market would collapse.

The Fed and the Treasury stepped into the breach, becoming the only major buyers of these mortgage-related securities, and they kept the mortgage market flush with cash. The Treasury spent about $220 billion, and the Fed pledged $1.25 trillion, the single largest foray the central bank has made into the markets since the onset of the crisis. In essence, the Fed has been printing money and funneling it to people looking to buy a house or refinance an existing mortgage.

At the same time, the federal government stood behind mortgage-finance companies Fannie Mae and Freddie Mac by taking them over and pledging to cover their losses. That helped the firms lower borrowing costs, since lenders know they can’t fail, and the companies passed on their savings to mortgage borrowers in the form of low rates.

Combined, these federal efforts helped push down the rates ordinary Americans pay for a mortgage. The 30-year fixed-rate mortgage declined from 6.04 percent in November 2008, according to Freddie Mac data, and hit an all-time low of 4.71 percent about a year later.

Refinancings surged, while homebuying perked up. Existing-home sales climbed nearly 10 percent in September, their highest level in more than two years.

The policy was the government’s most effective salve for the ailing housing market at a time when other initiatives, such as the administration’s attempts to modify the mortgages of struggling homeowners, produced far more disappointing results.

Now the government wants to end its support for low rates and has been striving to persuade others to buy mortgage securities.

The success of this approach hinges on the willingness of private investors, from China to big Wall Street funds, to buy large amounts of the mortgage securities and fill the void left by the government.

On Christmas Eve, Treasury officials announced a move that would cover losses suffered by investors who buy these securities from Fannie Mae and Freddie Mac, which together now back about half of the nation’s $12 trillion mortgage market. The goal was simple, officials said. They wanted private investors to be reassured that mortgage securities are safe to buy.

As the economy showed signs of recovery at the end of last year, the administration and the Fed decided to end their support.

The Treasury stopped buying mortgage securities in December. The Fed said it would taper off purchases gradually, ending them by March 31.

Obama’s economic team could have raised the limits on how much mortgage securities Fannie and Freddie can buy, allowing those firms to replace the Fed’s purchasing program. But Barr said the administration thinks the mortgage business will stand on its own without such special assistance, similar to the way the nation’s biggest banks weaned themselves off federal bailout funds by raising private capital.

“The basic goal is to implement a gradual process where the government’s role in the economy goes down,” Barr said. “It has to be consistent with the basic goal of stability, but it is appropriate.”

Administration and Fed officials expressed confidence that rates will rise only modestly – perhaps a quarter of a percentage point. They attribute their optimism to the lengthy notice they have given the market. The markets already should have anticipated the government’s exit by adjusting interest rates higher. Yet mortgage rates have been falling slightly the past few weeks.

The optimism at the White House and the Fed, however, is not shared across the government. A few senior policymakers at the central bank view the economic recovery as still too fragile, suggesting that purchases perhaps should expand further. These dissenters also warn that mortgage rates could shoot up, perhaps to 6 percent or higher, because private investors buying securities would demand a greater rate of return than the Fed. To reach it, lenders may have to raise rates for consumers.

“Presumably, there is pent-up demand from the private sector, but the question is: At what rate are they going to be interested?” said Eric S. Rosengren, the president of the Federal Reserve Bank of Boston, who has indicated that he supports expanding the Fed’s mortgage securities purchase program.

There also could be unintended consequences to the government’s pull-out. Last year, big investors such as Pimco sold their mortgage-backed securities to the government and used that money to buy bonds and stocks. That extra cash, which propped up stock prices, could drain away after federal support ends.

Real estate and mortgage finance officials said the timing of the government’s exit seems especially ill-conceived, since the Fed’s support would end just a month before a homebuyer tax credit program, which the real estate industry has credited with jump-starting home sales.

Given the importance of the housing market, some industry officials doubt whether the government will follow through with its pledge to exit the mortgage market in March. Fannie and Freddie officials say that the companies together can buy about $300 billion of mortgage securities by the end of the year before they hit their federally mandated limits. Though it appears reluctant to do so, the administration could use that buying power to cushion the blow after the Fed’s program ends, the industry officials said.

“I believe they do want to end it in March, but it’s like all New Year’s resolutions,” said Mark Vitner, a senior economist at Wells Fargo Securities. “The Fed’s New Year resolution is to go on a diet, go to the gym, give up drinking and clean the garage. They might be able to do one of those things, but to do all four is tricky. They have to drain all the liquidity they added to the financial market so we don’t see a resurgence in inflation, but do it in a way so that the economy does not slip into recession.”

Jan. 25, 2010 – Florida’s existing home sales rose in December, marking 16 months that sales activity has increased in the year-to-year comparison, according to the latest housing data released by Florida Realtors®.

Existing home sales rose 33 percent last month with a total of 14,630 homes sold statewide compared to 11,013 homes sold in December 2008, according to Florida Realtors. Statewide existing home sales last month increased 4.3 percent over statewide sales activity in November.

Florida Realtors also reported a 91 percent increase in statewide sales of existing condos in December compared to the previous year’s sales figure; statewide existing condo sales last month rose 22 percent over the total units sold in November.

Seventeen of Florida’s metropolitan statistical areas (MSAs) reported increased existing home sales and higher condo sales in December. A majority of the state’s MSAs have reported increased sales for 18 consecutive months.

Florida’s median sales price for existing homes last month was $140,400; a year ago, it was $155,300 for a 10 percent decrease. Housing industry analysts with the National Association of Realtors® (NAR) note that sales of foreclosures and other distressed properties continue to downwardly distort the median price because they generally sell at a discount relative to traditional homes. The median is the midpoint; half the homes sold for more, half for less.

The national median sales price for existing single-family homes in November 2009 was $171,900, down 4.4 percent from a year earlier, according to NAR. In California, the statewide median resales price was $304,520 in November; in Massachusetts, it was $285,000; in Maryland, it was $245,569; and in New York, it was $210,000.

According to NAR’s latest outlook, home sales are seeing a boost from the federal homebuyer tax credit. “There are many more potential buyers who can enter the market in the months ahead,” said NAR Chief Economist Lawrence Yun. “Activity should ramp up for another surge in the spring when buyers take advantage of the expanded tax credit, which hopefully will take us into a self-sustaining market in the second half of 2010. In all, 4.4 million households are expected to claim the tax credit before it expires, and balance should be restored to the housing sector with inventories continuing to decline.”

In Florida’s year-to-year comparison for condos, 5,968 units sold statewide last month compared to 3,132 units in December 2008 for an increase of 91 percent. The statewide existing condo median sales price last month was $107,000; in December 2008 it was $130,300 for an 18 percent decrease. The national median existing condo price was $178,000 in November 2009, according to NAR.

Interest rates for a 30-year fixed-rate mortgage averaged 4.93 percent last month, significantly lower than the average rate of 5.29 percent in December 2008, according to Freddie Mac. Florida Realtors’ sales figures reflect closings, which typically occur 30 to 90 days after sales contracts are written.

Among the state’s larger markets, the West Palm Beach-Boca Raton MSA reported a total of 849 homes sold in December compared to 638 homes a year earlier for a 33 percent increase. The market’s existing home median sales price last month was $247,900; a year ago it was $246,000 for an increase of 1 percent. A total of 763 condos sold in the MSA in December, up 45 percent over the 527 units sold in December 2008. The existing condo median price last month was $111,400; a year earlier, it was $112,900 for a decrease of 1 percent.

Initial up-front MIP increase will be raised by .50 to 2.25% will be released in a Mortgagee Letter tomorrow Jan 21 and will go into effect in the spring

Borrower will be required to have a min credit score of 580 to qualify for 3.5% down, if score less than 580 must have 10% down this will go into effect in early summer

Seller concessions will be reduced from 6% to 3%, will be posted in February will go into effect in the early summer

Lender performances, Neighborhood watch will be available on HUD website on February 1

Enhanced monitoring of lender performance, implement credit watch termination through lender underwriting ID in addition to origination ID will be released in Mortgagee Letter tomorrow Jan 21 and is effective immediately

Pursuing authority to increase enforcement on lenders to assume liability for all the loans they originate and underwrite

Legislative authority permitting HUD flexibility to establish areas of review and termination to withdraw originating and underwriting approval for lender nationwide on the basis of the performance of its regional branches

You’ve heard that investing in real estate can be very lucrative. Before you get started, here are seven questions to ask yourself.

1. Is this a hobby or a business?
Ask yourself why you want to invest in real estate.
-Do you want another income stream
-Do you want to build equity in a house
-How many sellers and buyers do you want to speak with each day/week/month
-How much time do you have to invest in real estate
-Are you working a full time job
-Are you retired looking for additional income
-What do you want to do with your time?
If you want to build a real estate investing business, then you need to treat it like a business.
Are you going to be a landlord? Then you need to determine how much time you want to spend collecting rent, maintaining the property, making repairs, answering tenant calls late at night, etc.
Or have a property management company handle the tenants and maintenance? Then you need to determine who you will hire to manage your property and how much you will pay them. Typically a property management company will charge one months rent to locate a tenant and then charge 8%-10% of the monthly rent for collecting the rent and answering all calls from the tenant. You still need to set aside a reserve fund for maintenance.

Maybe you don’t want to be a landlord and you want to wholesale property. Then you need to develop a buyer’s list of buyers who have the cash to purchase the house. You will still need to work with sellers to locate properties, get it under contract. You then need to get your wholesale buyer to sign the assignment of contract. And you have to make sure you follow up with the closing agent to make sure the deal is funded by the wholesale buyer and the deal closes. You will get your assignment fee once the deal closes.

Here are the questions you need to ask yourself.
-Do you want to be a landlord
-How much time do you want to put into real estate investing
-Do you want to build a business or just make some extra money once in a while
2. Do you want to work directly with sellers?
There are many investors who want to get into the real estate investing business who don’ t have prior sales experience. Yes, you can call homeowners directly and negotiate the purchase of their home, it is possible. It’s even easier when you are speaking with a motivated seller. I mean a seller that is really motivated to sell, not someone who wants to sell, wants full price for their home and just doesn’t want to wait for the all cash buyer that will pay retail price.

Are you someone that wants to help these motivated sellers? Do you have it in you to hear their stories over and over? Some of these sellers will break your heart and you will want to help them. You have to make sure that you only work with those that you can help and make a profit for yourself. Just because someone is willing to deed you their house does not mean it is a good deal.

Think about a situation where the seller has two mortgages, judgments, and liens on the property. Yes, you can work this as a short sale and get the liens removed and negotiate with the lender to get a smaller settlement for the payoff of the mortgage. You need to decide if you want to put in the time and effort it takes to negotiate the short sale and get the liens removed. I have seen investors in the short sale negotiation process with the lender for anywhere from 2 months to 18 months. Do you want wait months to close the deal?

You need to decide if you want to work directly with homeowners or have someone handle this for you.

3. Do you want to work directly with buyers?
Once you have a house under contract, it is time for you to find your buyer. The best thing you can do is to build a buyers list before you have a property. Find out where the buyers want to live, and then go find a house in that area. It is much easier to find a house for a buyer than it is to find a buyer for a house.

Do you want to take calls from the buyers? They call at all hours, while you are having dinner, before you wake up in the morning, when you are driving to work, etc. Are you willing to drop everything you are doing to take a call from a buyer?

4. Where are you going to get the money?
This is one of the biggest concerns of all real estate investors, where to get the money.
Yes, you can buy a house with little of your own money. Some of the techniques to do this are:
-Buy the house subject-to the existing mortgage
-Have the seller carryback the financing in the form of a note
-Lease/Option the house
You can also build relationships with other people who have money, such as
-Private lenders
-Hard Money Lenders
-Mortgage Brokers
The biggest money concern that you never hear about is where to get the money to market your business. You can buy a house subject-to the existing mortgage. But how do you find that house? You have to continue to MARKET, MARKET, MARKET.

Marketing costs money. That is what most of the gurus forget to tell you. You hear all about how you can buy a house with no money down or little money down. What they don’t tell you is that you have to spend money on marketing to find the house, and money on marketing to find the buyer.

Before you get started, put together a marketing plan so you know how much money you need to get started.

5. Do you want chunks of cash or cash flow?
What is the reason you want to invest in real estate? Are you interested in getting chunks of cash? Cash Flow? Or Both?

What you want out of real estate investing will help you determine what type of real estate investing you want to get into.

If you are looking for chunks of cash, you have a couple of choices. Consider wholesaling or rehabbing (fix and flip).

If you are looking for cash flow, consider landlording, selling a home with seller financing, or be a private lender.

6. Where do you want to invest?

Many investors will start out in their local market because they are familiar with it and they already have some relationships in the area. It’s easiest to start local since you are familiar with house values and have access to local experts to answer your questions.

7. What is your plan to learn more about RE investing?

The most successful real estate investors are those who keep up with the changes in the industry and are constantly learning new techniques.

One of the best things you can do is find a local mentor, someone who is making money investing in your local market. Ideally they should be investing in the area that you are interested in. If you want to wholesale properties, find a local investor who is wholesaling properties. Not only will you ask them to mentor you, but they may buy some of your properties from you.

If you are interested in commercial real estate, then you shouldn’t spend your time with an investor who deals only with single family homes.

Always continue to learn about Real estate investing. There are many gurus that travel the country teaching real estate investing. Ask the people at your REIA whose products they have purchased and whether or not it helped them in their business.

First determine the niche you want to work to get started. Learn everything you can about that specific niche and create income in that niche before you move on to the next niche. Don’t get distracted by the “shiny ball” syndrome.

Real Estate investing can be very lucrative. You need to create a plan, continue to educate yourself, and continue to market for sellers and buyers.

When you have a game plan, call me so we can setup a search and study the market to pick the best deals!

This is some great new for buyers using FHA financing. In an effort to stabilize home values and improve conditions in communities where foreclosure activity is high, HUD Secretary Shaun Donovan announced a temporary policy that will expand access to FHA mortgage insurance to allow for a quicker resale of foreclosed properties. The policy change will permit buyers to use FHA-insured financing to purchase HUD-owned properties, bank-owned properties or properties resold through private sales.

“As a result of the tightened credit market, FHA-insured mortgage financing is often the only means of financing available to potential homebuyers,” says Donovan. “FHA has an unprecedented opportunity to fulfill its mission by helping many homebuyers find affordable housing while contributing to neighborhood stabilization.”

With certain exceptions, FHA currently prohibits insuring a mortgage on a home owned by the seller for less than 90 days. This temporary waiver will give FHA borrowers access to a broader array of recently foreclosed properties.

“This change in policy is temporary and will have very strict conditions and guidelines to assure that predatory practices are not allowed,” Donovan says.

Acquiring, rehabilitating and reselling foreclosed properties to prospective homeowners often takes less than 90 days in today’s market; and FHA’s 90-day rule can adversely impact buyers if a seller is unwilling to hold a property 90 days thanks to holding costs and the risk of vandalism.

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

The waiver will take effect on Feb. 1, 2010, and be effective for one year, unless otherwise extended or withdrawn by the FHA Commissioner. To protect FHA borrowers against predatory practices of “flipping,” the waiver is limited to those sales meeting the following general 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 only apply if the lender meets specific conditions.

• The waiver is limited to forward mortgages, and does not apply to the Home Equity Conversion Mortgage (HECM) for purchase program.

• Specific conditions and other details of this new temporary policy are in the text of the waiver, available on HUD’s website:

http://www.hud.gov/offices/hsg/sfh/waivpropflip2010.pdf

Condo for sale in North East St. Petersburg at 12033 Gandy Blvd #153, St. Petersburg FL 33702.

The Grande Verandahs on the Bay luxury waterfront condominium community on Gandy Blvd. features a fully gated community with controlled entry gates & 2 under building parking spaces right by the lobby. Beautiful 5th floor unit with a split floor plan, huge master suite, with both a soaking tub and large walk-in shower, tray ceilings in the entry and kitchen, huge kitchen featuring granite counter tops, black on black appliances & a walk-in pantry, large inside laundry with additional storage. Panoramic views across the 80 plus acre protected preserve & Old Tampa Bay, you can see water from every window! Owner paid $514k plus in 05 & lived in this unit for 8 months, this is NOT a short sale! The community has a pool/spa and a state of art exercise center in the clubhouse surrounded by lush tropical landscaping. Minutes from Downtown Tampa, Clearwater and St Petersburg HOT Downtown nightlife, restaurants, shops and so much more

To view this home call David Price with Coldwell Banker at 727-851-6189 anytime.

Photos Click Here