A recent policy change by the U.S. Department of Housing and Urban Development is encouraging flipping to foster more sales of foreclosure homes. This is a major shift in policy, as the regulations until now required a home to be on the market for 90 days before a home could be flipped.
“Flipping” Coplan said, ” is when a house is bought and quickly resold for a profit.” “Foreclosed homes, typically damaged like the one [pictured] here, are being bought, fixed up, and resold for substantial profits.”
Until now there have been seasoning requirements that do not allow a property to be resold for 90 days on some loan types. The FHA which is a large part of mortgage activity taking place is valley has suspended the 90 day seasoning requirements for 1 year starting February 1st.
Last Month, foreclosure activity was up 4 percent from the previous month in the Valley, over one in every 100 houses received a foreclosure filing during January. Phoenix had the second highest foreclosure rate among metropolitan areas according to the latest report from Realtytrac.
The Valley was the only metro area among the top 10 to post a month-overmonth increase in foreclosure activity. The anti-flipping waiver isn’t the solution to the foreclosure crisis, but it’s a step in the right direction, said Jay Butler, associate professor of real estate in the W.P. Carey School of Business at Arizona State University. The waiver includes numerous safeguards to prevent inflated pricing, such as if the price of the home is 20 percent over the previous sale, the seller has to justify that increase, he said.
Josh Coplan has been in Real Estate for 6 years and is Certified in Short Sales & Foreclosures Resources(SFR). We congratulate Josh for making it to the front page of the East Valley Tribune, and also congratulate the Tribune for their excellent selection.