FHA INFO #20-15: Proposed CWCOT Enhancements

FHA INFO #20-15: Proposed CWCOT Enhancements

Investor Update
February 24, 2020 

Source: HUD

Today, the Federal Housing Administration (FHA) announced that it has posted on its Single Family Housing Drafting Table, proposed enhancements to its Claims Without Conveyance of Title (CWCOT) program. All FHA-approved mortgagees, servicers, and other interested stakeholders are invited to review the posted content and provide feedback on the proposed program updates through March 9, 2020.

Originally piloted in 2013, CWCOT is an FHA claim option through which insurance benefits are paid to a mortgagee after the sale of the property to a third party at foreclosure of the FHA-insured mortgage or through a second chance sale. This means there is no conveyance of the property to the Department of Housing and Urban Development in exchange for payment of the mortgage insurance benefit.

While FHA’s CWCOT program has enjoyed success to date, the agency has identified several key areas for improvements to the existing program that could make it even more viable for foreclosure sales associated with defaulted FHA-insured mortgages going forward.

As previously mentioned, FHA is seeking feedback on the proposed CWCOT program enhancements posted on the Drafting Table. Once the two-week feedback period ends, FHA will carefully consider the responses received and — if and/or where applicable — incorporate that feedback into a final CWCOT policy document to be published at a later date.

Instructions for providing feedback are posted on the Drafting Table. Additionally, interested stakeholders can go to www.hud.gov/answers or call the FHA Resource Center at 1-800-CALLFHA (1-800-225-5342) for more information. Persons with hearing or speech impairments may reach the FHA Resource Center via TTY by calling the Federal Relay Service at 1-800-877-8339.

Quick Links
• View the proposed enhancements to FHA’s CWCOT program on the Single Family Housing Drafting Table at: https://www.hud.gov/program_offices/housing/sfh/SFH_policy_drafts

Contact the FHA Resource Center:
• Visit our online knowledge base to obtain answers to frequently asked questions 24/7 at:
• E-mail the FHA Resource Center at: answers@hud.gov. Emails and phone messages will be responded to during
normal hours of operation, 8:00 AM to 8:00 PM (Eastern), Monday through Friday on all non-Federal holidays.
• Call 1-800-CALLFHA (1-800-225-5342). Persons with hearing or speech impairments may reach this number by
calling the Federal Relay Service at 1-800-877-8339.