"It's a different market now," said Andre Weitzman, a Baltimore attorney who represented many homeowners victimized by flipping fraud schemes. "The main catalyst for flipping was the easy availability of loans. Money's not so easily available now."
As long as lenders are more stringent in their mortgage requirements, there seems to be little room for inflated home values to be used as a way to get a quick-flip payout, he said.
Appraisers, too, are being more careful now than they were during the housing bubble, said Fern Dannis, the director of housing programs for the Maryland Association of Realtors. When the market was hot, appraisers were more likely to be taken in by the constantly rising values, instead of focusing on the value added only by improvements.
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Restrictions built into the waiver should also guard against fraud, said Owen Jarvis, an attorney at St. Ambrose Housing Aid Center, which helped lead efforts against flipping in Baltimore.
For instance, to be eligible for the waiver, a property that is being sold for more than 20 percent more than the seller's acquisition cost must provide a second appraisal or provide documentation of the improvements to the home. An inspection also must be completed if the home is being resold with 90 days for a price that is 20 percent more than its previous sales price, according to HUD.
"As long as that's adhered to, that seems to protect the buyer," Jarvis said, though he added that if no one is monitoring loans to ensure those precautions are taken, there could be a problem.
Mortgage fraud has again become a problem in Baltimore in recent years, as residents facing foreclosure or "underwater" mortgages, in which they owe more than the home's value, seek assistance.
Against that backdrop, Mark Sissman, president of Healthy Neighborhoods Inc., said he's also concerned about the anti-flipping waiver. His organization, which promotes homeownership and stabilizing Baltimore neighborhoods, still sees wide swings in appraised value of homes, he said. And loosening regulations could invite more mortgage fraud, he said.
"Somehow, in Baltimore, creative entrepreneurs have found every way possible to make money at the cost of individual homeowners and the FHA," he said.