HUD Updates Claims Without Conveyance of Title Procedures

Weiner Brodsky Kider PC
Contact

Weiner Brodsky Kider PC

HUD recently issued Mortgagee Letter 2020-21 (ML 20-21), implementing certain enhancements to the FHA Claims Without Conveyance of Title (CWCOT) procedures.  Mortgagees may follow the updated guidance provided in ML 20-21 immediately, but must follow such guidance for all foreclosure sales associated with defaulted FHA-insured mortgages scheduled to occur on or after October 5, 2020.

The policy updates provided in ML 20-21 include, in part, the following:

  • If a property that had an exterior-only appraisal becomes vacant, mortgagees must obtain a new appraisal that includes both an interior and exterior inspection if: (1) before foreclosure, any delay due to obtaining a new appraisal will not cause the foreclosure sale to be canceled, or (2) after foreclosure, the mortgagee conducts post-foreclosure sales efforts;
  • Updates the procedures for determining a property’s Commissioner’s Adjusted Fair Market Value (CAFMV);
  • Permits mortgagees to submit for reimbursement eviction costs and eligible property preservation expenses incurred during post-foreclosure sales opportunities;
  • Provides mortgagees with an automatic extension of the conveyance timeframes to attempt post-foreclosure sales efforts in circumstances where mortgagees have complied with all required foreclosure timeframes; and
  • Updates the policy and allowable fee structure regarding independent third-party providers that conduct foreclosure sales or post-foreclosure sales efforts.

HUD noted that the changes made by ML 20-21 will be incorporated into FHA’s Single Family Housing Policy Handbook 4000.1.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Weiner Brodsky Kider PC | Attorney Advertising

Written by:

Weiner Brodsky Kider PC
Contact
more
less

Weiner Brodsky Kider PC on:

Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
- hide
- hide

This website uses cookies to improve user experience, track anonymous site usage, store authorization tokens and permit sharing on social media networks. By continuing to browse this website you accept the use of cookies. Click here to read more about how we use cookies.