Comments on: FHA, Flipping & Hard Layering http://www.fhaloanpros.com/2010/04/fha-flipping-hard-layering/ The Unofficial Guide to FHA Loans & Mortgages Tue, 17 May 2011 20:16:59 +0000 hourly 1 http://wordpress.org/?v=3.0.1 By: Gina Pogol http://www.fhaloanpros.com/2010/04/fha-flipping-hard-layering/#comment-100409 Gina Pogol Tue, 13 Apr 2010 18:38:14 +0000 http://www.fhaloanpros.com/?p=2257#comment-100409 The biggest reason that I can see for lenders' requirements being greater than FHA's is that they are subject to having their FHA approval pulled if their loans end up in foreclosure at a higher than the average for their area. Even if every loan they do conforms to FHA guidelines. Considering how many mortgages are FHA these days, you can see why lenders don't want to risk losing their ability to do this business. The biggest reason that I can see for lenders’ requirements being greater than FHA’s is that they are subject to having their FHA approval pulled if their loans end up in foreclosure at a higher than the average for their area. Even if every loan they do conforms to FHA guidelines. Considering how many mortgages are FHA these days, you can see why lenders don’t want to risk losing their ability to do this business.

]]> By: Carl Pruitt http://www.fhaloanpros.com/2010/04/fha-flipping-hard-layering/#comment-98439 Carl Pruitt Mon, 05 Apr 2010 13:30:49 +0000 http://www.fhaloanpros.com/?p=2257#comment-98439 One of the most irritating aspects of the need to show improvements to the property is that everyone seems to assume that the real estate market works like that stock market. That there is some objective value that is not ever affected by the previous seller's financial or personal situation. For example, say I locate a seller who has a serious legal problem and needs to hire a very good, very expensive attorney but he has no liquid funds to do so. That seller decides to quickly liquidate his home at a firesale price in order to raise funds. Assume also that there are numerous higher priced comparable homes already sold recently in that neighborhood. Should repairs or renovations be required in order to justify that sellers home being worth more than the price I pay? One of the most irritating aspects of the need to show improvements to the property is that everyone seems to assume that the real estate market works like that stock market. That there is some objective value that is not ever affected by the previous seller’s financial or personal situation.

For example, say I locate a seller who has a serious legal problem and needs to hire a very good, very expensive attorney but he has no liquid funds to do so. That seller decides to quickly liquidate his home at a firesale price in order to raise funds. Assume also that there are numerous higher priced comparable homes already sold recently in that neighborhood. Should repairs or renovations be required in order to justify that sellers home being worth more than the price I pay?

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