How the HUD Anti-Flipping Rule Protects Homebuyers

In May 2003, the U.S. Department of Housing and Urban Development (HUD) issued a federal regulation intended to protect potential homebuyers from potentially predatory lending practices associated with the process of flipping home mortgages insured by the Federal Housing Administration (FHA). Thanks to the rule, homebuyers can â€Å"feel confident that they are protected from unscrupulous practices,† said then-HUD Secretary Mel Martinez. â€Å"This final rule represents a major step in our efforts to eliminate predatory lending practices,† he said in a press release. In essence, â€Å"flipping† is a type of real estate investment strategy in which an investor buys houses or property with the sole intent of reselling them for a profit. The investor’s profit is generated through increased future sale prices that occur as a result of a rising housing market, renovations and capital improvements made to the property, or both. Investors who employ the flipping strategy risk financial losses due to price depreciation during declines in the housing market. Home flipping becomes an abusive practice when a property is resold for a large profit at an artificially inflated price immediately after being acquired by the seller with little or no appreciable improvements to the property.  According to HUD, the predatory lending happens when unsuspecting homebuyers either pay a price far higher than its fair market value or commit to a mortgage at unjustly inflated interest rates, closing costs or both. Not to Be Confused With Legal Flipping The term â€Å"flipping† in this instance should not be confused with the completely legal and ethical practice of buying a financially distressed or rundown home, making extensive â€Å"sweat equity† improvements in order to truly raise its fair market value, and then selling it for a profit. What the Rule Does Under HUD’s regulation, FR-4615 Prohibition of Property Flipping in HUDs Single Family Mortgage Insurance Programs,† recently flipped homes are not allowed to qualify for FHA mortgage insurance. In addition, it allows FHA to require persons attempting to sell flipped homes to provide additional documentation proving that the home’s appraised fair market value had truly increased significantly. In other words, prove that their profit from the sale is justified. Key Provisions of the Rule Sale by Owner of Record Only the owner of record may sell a home to an individual who will obtain FHA mortgage insurance for the loan; it may not involve any sale or assignment of the sales contract, a procedure often observed when the homebuyer is determined to have been a victim of predatory practices. Time Restrictions on Resales Resales occurring 90 days or less following acquisition will not be eligible for a mortgage to be insured by FHA. FHAs analysis disclosed that among the most egregious examples of predatory lending was on flips that occurred within a very brief time span, often within days. Thus, the quick flips will be eliminated.Resales occurring between 91 and 180 days will be eligible provided that the lender obtains an additional appraisal from an independent appraiser based on a resale percentage threshold established by FHA; this threshold would be relatively high so as to not adversely affect legitimate rehabilitation efforts but still deter unscrupulous sellers, lenders, and appraisers from attempting to flip properties and defraud homebuyers. Lenders may also prove that the increased value is the result of rehabilitation of the property.Resales occurring between 90 days and one year will be subject to a requirement that the lender obtains additional documentation to support the value to add ress circumstances or locations where HUD identifies property flipping as a problem. This authority would supersede the higher expected threshold established for the above-mentioned 90 to 180 day period and will be invoked when FHA determines that substantial abuse may be occurring in a particular locality. Exceptions to the Anti-Flipping Rule The FHA will allow waivers to the property flipping restrictions for: properties acquired by an employer or relocation agency in connection with the relocation of an employee;resales of foreclosed, bank-owned property by HUD under its real estate owned (REO) program;sales of property by other U.S. government agencies;sales of properties by nonprofit organizations approved by HUD to buy single-family properties at a discount with resale restrictions;sales of properties that are acquired by the seller by inheritance;sales of properties by state and federally-chartered financial institutions and Government-Sponsored Enterprises;sales of properties by local and state government agencies; andsales of properties within Presidentially Declared Major Disaster Areas (PDMDA), only upon issuance of a notice of an exception from HUD. The above restrictions do not apply to builders selling a newly built house or building a house for a borrower planning to use FHA-insured financing.

Science in Early Childhood Education - 3184 Words

Pass Name: Ngatokorua Maxwell Student ID: 481 Course: Early Childhood Research (Upgrade NZTC) Course Code: B411a Science in Early Childhood Education This research focuses on science in early childhood education, because as an educator I have always had an interest in science and I often wonder whether I am teaching this topic effectively and correctly for the children. I will define ‘What is science? And I will use a minimum of six articles relating to my topic. What is Science? Duschl, Schweingruber, Shouse, defines science, Science is both a body of knowledge that represents current understanding of natural systems and the process whereby that body of knowledge has been established and is continually extended, refined, and†¦show more content†¦In Te Whariki (Ministry of Education [MOE], 1996), it is reported that science creates opportunities for children to learn strategies for active investigation, thinking and reasoning (p 98). Children are naturally scientists† is one we hear often. There curiosity and need to make the world a more predictable place certainly drives them to explore and draw conclusions and theories from their experiences. Kilmer Hofman (1995, p 44), cited in Eliason Jenkins (1999, p 263), stated the benefits of science for young children include the promotion of intellectual growth, greater potential for success in school, and opportunities for development. Science in early childhood education for young children should be encouraged to develop them as they participate in science. Therefore, children need guidance and structure to turn their natural curiosity and activity into something more scienctific. They need to practice science – to engage in rich scientific inquiry. Scientific inquiry provides the opportunity for children to develop a range of skills, for example; explore objects, materials, and events, describe (including shape, size, number), identify patterns, share and discuss ideas and listen to new perspectives. 4 Name: Ngatokorua Maxwell Student ID: 481 Course: Early Childhood Research (Upgrade NZTC) Course Code: B411a Our practice of science that will guide us how we approach science in theShow MoreRelatedImportance of Play1008 Words   |  5 Pages The Importance of Play ECE 430 Early Childhood Education Capstone Prof. Sublette Jennifer Bentley November 28, 2011 The Importance of Play Play is one aspect that is common in every child’s life. The importance of play for children is huge. It is so much more than a recreational activity for them. Play is essential for children; it contributes to healthy child development cognitively, socially, and physically (McFadden, 2010). 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International Marketing Argumentative Essay Example For Students

International Marketing Argumentative Essay IntroductionIn this assignment, I am going to invent a product, examine all the environmental aspects surrounding it and relate them to the micro and macro environments. I will then carry out a SWOT analysis and an environmental analysis and then draw a number of conclusions and recommendations for my imaginary company. My productI have chosen to invent a product for which there seems to be a market, or at least, there is no similar existing product. It is a conventional swivel clothesline, but with an additional feature. It will have the ability to keep clothes dry when it starts to rain. This is achieved by the water sensors, which are integrated into the design. They then activate an umbrella like cover that shields the clothes from the rain. Marketing Environmental AnalysisThe marketing environment consists of a Microenvironment and a Macroenvironment. The microenvironment deals with internal factors, which could affect the companys ability to service its market, such as competitors, suppliers, distributors and consumers. The macroenvironment are those factors, which are outside the control of the company. They include social, cultural, political, economic and technological changes. They vary constantly, often with no predictability. Primarily, it is these changes that can cause the most significant threats and opportunities to a businessThe Micro- EnvironmentCompetition The No Worries clothesline is an original product, which people will inevitably copy over time, making competition something to worry about in the next 5 years. Competitors will cause a major threat to business. They can compete with prices making it more attractive to the customer to shop at their outlet. They can make their version of the product more attractive, i.e., more features. From research carried out from previous assignments, I have discovered that consumers want quality value for money and will build a strong loyalty to those who provide it. CustomersI understand my company will have to be customer focused, as we are a marketing orientated company. I will need to make a clear decision about the type of customer that I wish to target with my campaign. I will need to carry out some field research into what my market requires or likes and how I can meet those requirements or wants. Mainly though, I can predict that my target market will be middle aged women, possibly housewives and possibly those who work. I will wait to see what my research reveals. DistributorsIt is critical to know where the customer is and is going to be in order to distribute effectively. My distribution channel must finish where the consumer is and present it in the best possible way. It is important to supply enough to meet demands. Using forecasts will do this. As a small company starting out, I will need to recruit and independent distributor for financial reasons. SuppliersIt is important that suppliers distribute on time. My company will be using the Just in Time method of production, to save on storage space. It must be a pre-requisite of the contract with the supplier that the deliveries must arrive on time. Supplies for the manufacturing of the clothesline must be carefully monitored to ensure we dont run out. Being a new product, it is important it is available all of the time in the first few months to try to capture a share of the market within that time The MacroenvironmentSocial ForcesSocial influences which include populations, lifestyles, attitudes, values and beliefs and socio-economic class may affect my product because society is changing to become more rushed and people have less time for household chores. No Worries clothesline will mean that people can go out without worrying about whether or not it is going to rain and their fresh laundry will get wet again. My company could affect the region, in that more people from that ar ea are being employed. Robert Johnson EssayOnce all the relevant information has been collated, my company would build a database of this information. This would enable us to produce forecasts, and scenarios to help us with strategic decision making. Benefits of environmental scanning are better decision-making, better general awareness of and responsiveness to environmental change, improved market analysis, and improved resource allocation and diversification decisionsRecommendationsI recommend, as mentioned above, that a close watch is kept on my environment to enable the business to be more successful and more profitable and be able to optimise opportunities that are presented. I will target middle-aged women. It is well known by the media that women shop when they are bored or depressed and they buy luxury items. This is why companies so broadly target them. I will advertise where they are most likely to see it, outside supermarkets, shopping centres and mostly places where it will be on sale. I am aiming primarily to raise public awareness of my productI believe that I should use penetration pricing to start with. This would entice potential customers to purchase my product, and once they realise it is a durable and reliable piece of manufacturing, they will return, and I will gain customer loyalty. I recommend that the Flow method of production should be used. This will be fast and cost effective, ensuring maximum output at minimum cost. I shall base my promotion strategies within the UK because of seasonal factors, such as rain. I also recommend strongly that my product be redesigned every year to keep up with technology and to keep consumer interest alive. It gives old customers a reason to buy a new clothesline and new ones a reason to start buying our clotheslines. I shall look into a patent for my product. If this were considered to be a good idea, it would eliminate a lot of the threats to my originality. This paper is the property of MyTermPapers.com Copyright 1999-2001