Starting today home "Flippers" are now welcome at the FHA.
That's right, with a glut of foreclosures plaguing the nation's neighborhoods, the FHA is temporarily removing restrictions on investors who buy and sell homes within 90 days.
It's just for one year, but Flippers are no longer persona non-grata with the government.
"FHA borrowers, because of the restrictions we are now lifting, have often been shut out from buying affordable properties," FHA Commissioner David Stevens wrote in a statement last month. "This action will enable our borrowers, especially first-time buyers, to take advantage of this opportunity."
So the FHA wants to encourage flipping and turn first-time buyers, who are already getting a tax break, into new real estate speculators? Nope, they just want to get as many foreclosed properties as possible off the market. This opens up a whole new bundle of buyers to current real estate investors who previously couldn't flip the home to a low-income borrower.
Tuesday, February 02, 2010
FHA to encourage flipping
The Federal Housing Administration is behaving more and more like the financial institutions that got us into this mess:
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I don't think this would necessarily be a bad thing if FHA enforced stricter lending requirements and higher downpayments. "Flipping" homes isn't inherently a bad thing. Its facilitating lending to unqualified buyers on overpriced propoerty that is the problem.
ReplyDeleteFlipping is inherently a bad thing....it turns a home buying into a free-for-all and a money making scheme rather than a place where people can raise a family and live comfortably. Flippers are scum.
ReplyDeleteLowering interest rates and giving people who should buy homes a chance to buy isn't a "inherently" a bad thing either with your way of thinking but hey...look where it got us.
I share Noz's affection for flippers. They add very little value to the market, it's nothing more than speculative painting that gives the illusion of housing demand. The problem with the FHA's ban on flipping is that its not really a ban at all. Flippers just wait out the 90 days and then flip which is worse than having no ban at all because it creates more this shadow inventory of foreclosures waiting to hit the market. So the move by the HUD in lifting the ban is better than the ban itself, but not as good as if their was in reality a ban on flipping FHA backed purchases.
ReplyDeleteNoz, your post is moronic as usual, but I'll respond anyway. I don't know how you define "flipping", but as I use it, it means buying a house and then reselling it in a relatively short period. Not sure how that makes someone scum. If someone buys a house (perhaps one in bad shape that they fix up or an REO/foreclosure that the bank wants to unload quickly for cash), then resells it at a reasonable price to a qualified buyer, good for them.
ReplyDeleteThen you say "Lowering interest rates and giving people who should [n't] buy homes a chance to buy isn't a "inherently" a bad thing either with your way of thinking". First of all, I'll go ahead and define my own way of thinking. Second, I said explicitly in my post "Its facilitating lending to unqualified buyers on overpriced propoerty that is the problem." I mean, come on, it was a 3 sentence post. One of those sentences explicitly contradicts what you claim is "my way of thinking". READ then post, please.
Flipping involving true renovation and value added to a home can be argued as a worthwhile endeavour. So I can see the point of its value, particularly when it helps remove blight.
ReplyDeleteHOWEVER, flipping involving merely holding on to a property to cash back out when its value is carried higher by market forces is absolutely abhorrent! This is indeed inherently bad.
Hey - remember when NOZ said that Case Shiller (DC) would get down to 135??? That was funny wasnt it...
ReplyDeleteTo anonymous:
ReplyDeleteYeah, there's clearly different kinds of flipping. The point is to say "flipping is inherently bad" and "flippers are scum" is a stupid over-generalization. The problem flipping was due to many underlying factors such as bad lending standards, bad appraisals, bad incentives for people collecting transactional fees, simple fraud etc. Saying "flippers are scum" is like saying "real estate agents are scum". Many may be. But many others are just perfectly nice people doing a job.
To Noz:
Another great post. You really managed to not address any substantive points or say anything of value. Keep up the good work.
I actually am starting think that James made you up to make stupid, funny posts to generate controversy on the blog. Otherwise, how could someone consistently say such stupid things. Any real person would eventually stop due to embarrassment. But hey, you keep it up and we'll all keep laughing at you.
Hey - remember when NOZ said that Case Shiller (DC) would get down to 135??? That was funny wasnt it...
ReplyDeleteYeah and what makes you think the declines are over?
AGAIN and AGAIN and AGAIN...go and buy everything you can if you think that's not the case...what's the matter Pansyass? Don't have the balls to back it up?
Now that's funny...
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ReplyDeleteNoz - FWIW, I dont live in DC. I own a place in the UK (but I have considered moving here).
ReplyDeleteStill, even though prices in DC dont affect me one way or the other, I like to think back to your predicted 135 and laugh, and laugh, and laugh...
Of course you live in the UK....and I'm Dirk Diggler.
ReplyDeleteDuring the housing boom I remember seeing public service ads on TV stating that "flipping is illegal". However, since this area's TV market covers three jurisdictions (MD, VA, & DC) I never knew which jurisdiction the ads were targeting. I lived in Alexandria at the time, so maybe the ads were cable ads targeting only Alexandria residents.
ReplyDeletehaha. wtf are you talking about, noz? some anonymous poster says he live in the UK and you respond with "and I'm Dirk Diggler"? you're like a spam bot that went retarded.
ReplyDelete