Prohibition of Property Flipping in HUD's Single Family Mortgage Insurance Programs

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This proposed rule would address property "flipping," the practice whereby a property recently acquired is resold for a considerable profit with an artificially inflated value, often abetted by a lender's collusion with the appraiser. Specifically, the proposed rule would establish certain new requirements regarding the eligibility of properties for FHA mortgage insurance. The proposed regulatory amendments would protect FHA borrowers from becoming unwitting victims of property flipping. Further, the proposed changes comply with Congressional mandates to maintain the FHA Insurance Fund in a sound actuarial manner.