It was the classic real estate scam: Buy cheap and resell fast at inflated prices. It was the foundation of the 203(k) scandal, in which speculators conspired to defraud homebuyers, leading to the abandonment of nearly 600 properties in Harlem and Brooklyn. It’s also helped fuel skyrocketing home foreclosure rates–a stat in which New York City leads the nation–as trusting borrowers buy overvalued homes whose structural flaws have been covered up.

In September, the federal Department of Housing and Urban Development made a move to end this “flipping,” by proposing new rules withholding federal mortgage guarantees from properties that have recently been resold. Under these rules, a home must remain under the same ownership for six months before it can qualify for Federal Housing Administration loans.

The change could not have come sooner. Last year, FHA delinquency rates in the five boroughs jumped by more than 30 percent as one in 10 borrowers fell more than three months behind on their FHA mortgages. Reasons range from rising family debt to a slowing economy, but increasingly everyone, including HUD, is blaming predatory lending–the practice of selling loans to low-income borrowers with added fees, high interest rates and hidden payments.

Other new HUD rules aimed at fighting predatory lending include strengthening oversight of mortgage brokers: The agency says it would end its relationship with any lender whose default rate is significantly higher than local and national averages. And in mid-October, HUD Secretary Mel Martinez called for “full disclosure of all costs associated with obtaining a home loan.”

Some activists are cautiously pleased. “Anything the Secretary does to stop foreclosures and predatory practices is good,” says Tracy Van Slyke of the National Training and Information Center, which promotes investment in low-income communities. “But enforcing the rules is the most important thing.”

Indeed, in New York City, requiring lenders to check property transfer information from court dockets and county clerks’ records before making a loan may be a tall order, given that record-updating in those offices is months behind. “The six-month restriction is a joke,” says Pamela Sah, an attorney with the foreclosure prevention division of South Brooklyn Legal Services. “The seller will just wait 181 days and then flip them.”