Officials to extend suspension of anti-flipping rule

In an effort to maintain the momentum gained by the housing market, the Los Angeles Times reports the Federal Housing Administration has decided to extend its suspension of government anti-flipping rules to increase FHA lending.

Last January, officials enacted a one-year suspension of the rule to allow homebuyers to take advantage of the FHA's low down payment requirements to buy up some of the vast foreclosure inventory present in some parts of the country. Officials told the paper they are planning to extend the suspension for another year.

The original rules, which are designed to keep unscrupulous investors from defrauding the government, prevents a buyer from getting an FHA loan if the seller hasn't owned the property for at least 90 days.

The paper says while the rule does cut down on fraud, it also keeps legitimate property investors from buying a home, fixing it up and reselling it for a profit to a real buyer.

Foreclosures account for a large portion of Houston real estate transactions. According to data from the Houston Association of Realtors, Houston foreclosures made up 19.6 percent of property sales in November.