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[ Follow Ups ] [ Post Followup ] [ The Forum Board ] [ FAQ ] Re: Lenders' View of Property Flipping Posted by CCinOC on May 15, 2010 at 10:10 AM In Reply to: Re: Lenders' View of Property Flipping posted by bukzin on May 15, 2010 at 9:08 AM I watched it. The audio quality was poor and the presentation was rushed. Basically, the Agencies (Fannie/Freddie) have no policy against flipping but leave it to the lenders to determine if an illegal flip has occurred. If you buy the property for X and sell it immediately for Y without improvements you can document, that's an illegal flip. If you buy the property for X and sell it for Y after making improvements, it's at the lender's discretion whether it's an illegal flip. Discretion means examining the documents re improvements and whether the improvements have, in fact, brought the property to fair market value in the area. Bottom line: lenders don't like flips because it requires them to make a judgment that may or may not be accepted by Fannie/Freddie on presentation for sale in the secondary market. Thus, flips are risky for them. VA has no title seasoning requirements. FHA had a 90-day title seasoning requirement but it's been waived, under certain circumstances, for one year from February 1, 2010. No double escrows are allowed by Agency lenders. The presentation is available as a PDF document but it's not really helpful without a discussion, which wasn't contained in the presentation, anyway. Follow Ups: Here's the presentation in PDF format... CCinOC 12:35 AM, 05/17/10 (0) Post a Followup: Name : E-Mail : Subject : Comments: : I watched it. The audio quality was poor and the presentation was rushed. Basically, the Agencies (Fannie/Freddie) have no policy against flipping but leave it to the lenders to determine if an illegal flip has occurred. : If you buy the property for X and sell it immediately for Y without improvements you can document, that's an illegal flip. : If you buy the property for X and sell it for Y after making improvements, it's at the lender's discretion whether it's an illegal flip. Discretion means examining the documents re improvements and whether the improvements have, in fact, brought the property to fair market value in the area. : Bottom line: lenders don't like flips because it requires them to make a judgment that may or may not be accepted by Fannie/Freddie on presentation for sale in the secondary market. Thus, flips are risky for them. : VA has no title seasoning requirements. FHA had a 90-day title seasoning requirement but it's been waived, under certain circumstances, for one year from February 1, 2010. : No double escrows are allowed by Agency lenders. : The presentation is available as a PDF document but it's not really helpful without a discussion, which wasn't contained in the presentation, anyway. [ Follow Ups ] [ Post Followup ] [ The Forum Board ] [ FAQ ] WWWAdmin 2.0a © 1997 Matt Wright and DBasics Software Company, All Rights Reserved

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