House Bill Would Allow REO Purchases with Retirement Funds
Finally, something to actually promote home ownership from our government…if it passes. I do have one problem though, it stipulates that the house must be in foreclosure for a year or more. Most banks understand now that if they price their foreclosure well, it will sell quickly. At least they do in our local market. And if it doesn’t sell quickly, it is probably in such bad shape that only an investor would buy it, which this bill excludes.
A bill introduced in the U.S. House of Representatives would waive withdrawal penalties on certain retirement plans if the funds were used to buy a house that has been in foreclosure for a year or more, HousingWire reports. The bill is expected to apply to Roth IRAs, 401(k) plans, and company pension plans. The legislation’s aim is to promote REO home purchases by owner occupants or second home owners rather than investors just looking to “flip” a foreclosure for fast money. According to the bill, purchasers must agree to hold the property for at least two years to be exempt from early retirement plan withdrawal penalties.
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