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Archive for September 18th, 2009
Rules are Rules for Title Seasoning
Buying a flipped property in Colorado Springs?
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Twice this week I’ve ran into issues with buyers who wanted to buy distressed homes in Colorado Springs with FHA loans and the 
properties didn’t have Seasoned Titles. Hence, I thought it was great subject for a blog post, as I didn’t truly understand it until this week; and my guess is that many Realtors and most consumers also don’t understand it.
If a buyer is looking at a property and is planning on getting an FHA loan, there is a title seasoning requirement of 90 days. In other words, the property must have the title recorded in the seller’s name for 90 days before the closing and funding of the FHA loan. This definitely stops any double-closings or a short term (less then 90 days) flip.
The History of Title Seasoning
I’m sure we’ve all heard stories about the crooked investor who stole a home from a sweet Aunt Sally for $80K, spent a few grand on carpet and paint, then sold it 30 days later to a homebuyer for about $150K. Because of stories like this, FHA put this rule into effect to discourage investors from flipping properties several years back. The theory was that it is supposed to tighten up lending requirements to reduce abuse and mortgage fraud.
But both of the properties Read the rest of this entry »
