I have a question I know that FHA has made some changes lately too there guidelines. I have been looking all day for a answer and thought of my friends here at AR Network.
I have learned so many things by reading so many of your blogs and experiences, but now I need a little more help... I am not too familiar with FHA since we have been barely approved and I have a scenario that I am having trouble with.
The loan was approved but they are calling this transaction a "Flip" and it's a Foreclosure and they offered more than the asking price since there were multiple offers. They haven't had the home for long (Bank Foreclosure) and that effects the title seasoning I know that. I thought that it would be looked at a little different since it was a Foreclosure and all...
Now the underwriter is asking for a Second Appraisal because of the "Flip status" of this property???
I think that there was a recent change to the "Flip Transactions"... I thought that they had just changed the Months needed on title to less than was the "Norm" that was needed before?
I just thought that some one here with much more knowledge of this subject than me; could shed some light on this for me.....
I know that FHA has published a Mortgagee Letter regarding "flipping". Without researching it I think that it was maybe 3-4 years ago. I have not ran into a flipping circumstance in 2 or more years as they are not as prevelent as they once were. Whether or not there is something more recent I'm not sure of. Have you researched thru HUDCLIPS, etc?
Richard Smith, another AR FHA pro wrote the most informative post I've seen regarding HUD's anti-flipping rule and it's current waiver. Check it out here.
You will likely want to forward this info to your u/w but don't be too cocky or they might reward you with a mile long conditions sheet!
Ron is right on the money with HUDClips though. You will want to bookmark that site. Hope that helps.
Gerry- Thanks for the great response.... This is exactly what I was looking for.... Thanks!!!! The cocky part is right too!!!!! I knew that the AR Network would help me find the answer....
I do business in Port St Lucie, FL and we have foreclosures all over the place. This should not be viewed as a 'flipped property' by the underwriter. I would find a supervisor or your account executive that understands what an actual 'flip' is. I have yet to find an underwriter to call any REO a 'flip'.
Jeffrey & Paul- I did the loan for me and they after reviewing only asked for a second Appraisal and we closed it... The lender was on title less than Three months that was the supposed problem with it..
I would like to thank Gerri and Richard Smith (blong on this particular topic) for there help on this. I closed the loan and would have really had a tough time with out there help for sure.
Frank...your Underwriter should not call this a "flip" just because title changed handes during the foreclosure. Foreclosure does not constitute flipping. I had 3 like this recently and everyone freaked out ont he first one because title changed hands just 3 weeks prior to the contract. Once we did our research we confirmed that just because title changed hands recently because of the the forclosure ..that did not make it a "flipped property".
Frank Marta Texas Home Loan Specialist
;)
Links;)
Archives
Frank,
I know that FHA has published a Mortgagee Letter regarding "flipping". Without researching it I think that it was maybe 3-4 years ago. I have not ran into a flipping circumstance in 2 or more years as they are not as prevelent as they once were. Whether or not there is something more recent I'm not sure of. Have you researched thru HUDCLIPS, etc?