I wrote a post yesterday about the news that the Fed has suspended its "anti-flipping" policy: "FHA Backs Foreclosure Flips with No Wait," yet I can't seem to get the bad taste out of my mouth.

Like many of us, I’ve looked at FHA’s waiver language and puzzled over how they’re defining “vendor.” Still, providing for any sort of “middleman” position between REO lenders and the market is likely to benefit investors either directly (if some of us assume that position and manage to profit from it) or indirectly (if the policy change succeeds in its goal of stabilizing prices and stimulating market activity).

Even if real estate investors become “vendors,” rehabbing costs are higher than ever, so bringing many of these foreclosure properties up to FHA guidelines poses an awesome challenge, even if weren’t for the massive price drops we’ve seen in real estate markets hard-hit by foreclosure. Still, I have faith that if anybody can find a way to make money here, the REI community can. Although it may be too soon to know exactly how REI will capitalize on this development, the innovation and resilience I see in our community always amazes me.

Buying homes when prices are down and selling them when prices rise is an excellent strategy for investing in real estate, but most of us prefer to have more than one way out of a deal. If FHA’s waiver succeeds in providing real estate investors with options, then I see it as a positive step — even if it’s a small one.

Another point that I made in my post is that the Fed’s so-called “anti-flipping policy” did more to reveal the government’s generalized ignorance about how our industry works than it did to protect consumers. Their rationale for implementing this policy was to discourage the “predatory lending” and collusion they automatically associate with flipping. Has this policy protected anyone? Or did it unfairly seek to regulate our business practices without legitimate cause?

Looking at many of the loans that lenders extended to consumers, it seems to me that the Fed’s time and money would have been better spent scrutinizing the real predatory lenders. Now, by suspending its so-called “anti-flipping” policy, the Fed is going out on yet another limb for suffering REO lenders who, like consumers, should have known better than to get involved with the risky mortgages to begin with. Who pays for these mistakes? If you operate your own business, you know the answer.

I don't think this is occasion for a champagne toast, but what’s a good mixer for irony? If you need a chaser, try this: It appears that in 2003 when the Fed’s “anti-flipping” policy went into effect, then Housing and Urban Development (HUD) Deputy Secretary Alphonzo Jackson was getting a sweetheart mortgage deal from Contrywide’s head Angelo Mozilo. You may recall that Jackson resigned from his leadership post at HUD a few months ago amid accusations of cronyism.