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While percentages of homes being flipped nationwide are nowhere near their peak reached in 2005 and 2006, in some areas such as California they remain near their historic levels consistent with home price gains in those areas, according to a report released by Trulia on Thursday. The report found that traditional flips – those in which an investor sells soon after buying the house to take advantage of rapidly rising home prices – are higher in markets experiencing higher price gains, and especially high in markets where prices have appreciated by more than 10 percent year-over-year.
The recent hot spots for flipping include California and the South, according to the report. Six of the top 10 metro areas where flips represented the highest share of home sales were located in California, two were in Tennessee, and Florida and Massachusetts had one each. All metros with year-over-year home price gains above the high watermark of 10 percent experienced flipping activity between 3 and 4 percent in Q3 2014, which is on par with the average flipping percentage for that level of price appreciation from the years 2000 to 2014.
A new policy issued by the Federal Housing Administration on Thursday under its Home Equity Conversion Mortgage Program will allow reverse mortgage lenders to delay calling HECMs from a surviving non-borrowing spouse following the death of the last surviving borrower. Such a delay would postpone the foreclosure process normally triggered by the last surviving borrower's death. Under the new policy, reverse mortgage lenders have the option of assigning the HECM to HUD, thus allowing the spouse to remain in the home despite his or her non-borrowing status.
