FHA extends waiver of anti-flipping regulations for 2012

In order to try and help stabilize and unload some foreclosures that flood low-income housing markets, the Federal Housing Administration extended the waiver of anti-flipping regulations for 2012.   Flipping is a term referring to real estate investors who buy homes cheaply and then sell them for profit as soon as possible.  Low-income neighborhoods have been plagued by foreclosed homes and have been magnets for crime and other social ills.  The regulations were originally meant to prevent predatory flipping, which is when homes are resold at inflated prices to unsuspecting borrowers. 

To qualify for the waiver, the transaction must be at “arms length”, in other words no other relationship between buyer and seller.  Another qualification is that if the sales price at least 20% more than the original selling price, documentation, justification for the increase, property inspection and other conditions must be met.

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