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Benefits of Updates to CWCOT Program

In response to the Department of Housing and Urban Development’s (HUD) update to the CWCOT program, Auction.com [1] said there are numerous advantages to the department’s updates.

“We fully expect that the CWCOT changes outlined in the letter could take your combined CWCOT sales rate to over 90%,” said Jesse Roth, SVP, Strategic Partnerships and Business Development, Auction.com.

Roth said the CWCOT updates allow property preservations companies to claim eviction and property preservation expenses, even the property is sold through the CWCOT.

“This means you don’t have to wait to start the eviction process and vacate the property sooner,” Roth said.

Roth added that if the property had an exterior appraisal, HUD will now allow a new interior appraisal once the property is vacant.

He added that the new set of haircuts in the CWCOT updates “should significantly help move your properties through CWCOT.”

The final benefit noted by Roth was that it allows individual auction providers to market and sell properties in foreclosures across all 50 states.

The Federal Housing Administration (FHA) on Monday [2] published Mortgagee Letter (ML) 2020-21 [3], “Enhancements to FHA’s Claims Without Conveyance of Title (CWCOT) Procedures.”

According to the FHA's statement, the guidance in the ML enhances CWCOT procedures by:

The CWCOT program began in 2013 as an FHA claim option where insurance benefits are paid to a mortgagee after the sale of the property to a third-party purchaser at foreclosure of the FHA-insured mortgage or through post-foreclosure sales efforts.

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