FHA to Suspend 90 Day Resale Waiting Period
Posted Jun 13, 2008 @ 4:20 pm, Viewed by 1936 Visitors, Read 2107 Times.The Federal Housing Administration announced today it will temporarily lift the 90-day waiting period for property resales financed using an FHA loan. The 90-day waiting period was established in 2003 to help counter predatory lending practices and investor house flipping. Because of the glut of foreclosed and abandoned homes that are harming many neighborhoods, FHA will lift the waiting period for one year.
While Federal Housing Commissioner Brian Montgomery said "The action we take today will allow home buyers to purchase these homes in much greater numbers and ease the excess supply of unsold homes in neighborhoods across the country," the move will not be as substantial as one might think. The reason for this is because FHA also requires that homes purchased with loans it guarantees to be in move-in condition and many lenders still won't be able to resell their foreclosed upon homes until they make the repairs needed to bring them up to FHA standards. The likelihood of lenders jumping on that bandwagon seems slim, especially in hard hit areas where they may have numerous properties on their books.
Still, it is another step in the right direction to help with the current housing situation throughout the country. Any steps the government can make to hasten the housing recovery (short of a bailout) are to be applauded.
Metro Mortgage Company is a federally regulated Mortgage Banker specializing in Conventional, Jumbo and FHA/VA home loans throughout Florida. Call us today at 888-617-3674
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One year.
My guess is, it may wind up being longer depending on how the housing market shakes out.
Thanks, I hope it does end up being longer...that would save me and my clients a ton of headaches.
I always love your posts, it keeps me up to date on what is going on in the mortgage world. I have a lot of friends in the mortgage business, yet you always seem to beat them to the punch with the breaking news. BTW, I just added you to my friends list. Thanks for keeping me abreast of important changes in regards to mortgages.
Thanks for kind words Mike. We try hard to get the word out.
Actually, we get a lot of our updates on things directly from our investors. They do a great job of keeping us informed on happenings in the mortgage world.
Insource
When does this go into effect?
To my understanding, it was effective immediately. However, it usually takes a little while for these types of changes to work their way through the system, especially with regards to the big FHA wholesaler lenders.
Thanks for the update. This is GREAT news for home buyers and investors.
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Gulf Coast Associates is a private real estate firm specializing in SW Florida Real Estate. Benjamin Dona is the Broker-Owner. He and his wife Terry, an underwriter with 20 years experience, also own a federally-regulated mortgage banking firm, Metro Mortgage Company.
Originally from Saint Louis, Missouri we've lived and worked from our base in Bonita Springs since 1997. Read More
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This may not be a giant leap for mankind, but I have dealt with plenty of bank owned homes that people are trying to get new FHA loans on that get caught up on this 90 day rule. Yes, some banks are exempt, but some are not and it can lead to a lot frustration and confusion. To me, this is great news.
What does "temporary" mean according to FHA?