Remember how we all blamed investor/flippers using faulty financing for the housing crash?

You know, these are all the bad guys who ran up home prices to their own profit, with no concern for the inevitable fallout; they colluded with overzealous, borderline blind, lenders who gave anybody and everybody a loan with no attention paid to their ability to repay said loan.

That’s all over now. You can’t get a loan without pledging your first born in collateral, and if you’re an investor, you rank somewhere just below Angelo Mozilo.

Or do you? Last month Fannie Mae made a little change in the rules for all-cash buyers to apply for mortgages. I don’t recall a press release, and I’m quite sure I’m on their mailing list. But there it is, “Announcement SEL-2011-5,” a “Selling Guide Update:”

Currently, Fannie Mae requires a minimum of six months to elapse between the time a borrower purchases a home and subsequently applies for a cash-out refinance.

The Selling Guide has been updated to allow a cash-out refinance within six months of a purchase transaction when no financing was obtained for the purchase transaction.

There are of course all kinds of parameters, including maximum LTV (loan-to-value ratio), documentation, arms-length transaction and “all other cash-out refinance eligibility requirements and cash out pricing applied.” The mortgage cannot be larger than the value of the home of course.

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