CRFS co-founder Jodi Gaines moderated a blue ribbon panel of experts on the value and importance of the FHA’s CWCOT program at the recent MBA Servicing Conference & Expo.
Initiated in 2015 under “ML 14-24,” the Mortgagee Letter became effective for all foreclosure sales associated with defaulted FHA-insured mortgages scheduled on or after February 1, 2015. There are several compelling advantages to the non-conveyance asset disposition route for investors and servicers including:
- HUD reduced losses
- Servicer / Investor reduced losses
- Money received quicker
- Less out-of-pocket expenses
- Less interest pass-through if still in pool
- Avoid reconveyance
- Reduced overhead
And the financial impact of CWCOT is also significant, as evidenced by the below data compiled by the CRFS Analytics Team:
| Claims Filed in 2018 | ||
| Conveyances | Non-Conveyances | |
| Share of all liquidations | 33.37% | 66.63% |
| Days from last paid installment to resolution | 1226 | 974 |
| Property Preservation costs | $5,160.75 | $1,334.10 |
| Property Preservation losses | $3,658.58 | $640.29 |
| Other losses (e.g., foreclosure filings, legal fees) | $5,847.86 | $3,071.17 |
| Sale Held & Claims Filed in 2018 | ||
| Conveyances | Non-Conveyances | |
| Share of all liquidations | 12.72% | 87.28% |
| Days from last paid installment to resolution | 715 | 874 |
| Property Preservation costs | $2,340.55 | $882.39 |
| Property Preservation losses | $1,041.67 | $363.16 |
| Other losses (e.g., foreclosure filings, legal fees) | $3,819.80 | $2,097.19 |
To learn more about how CRFS can help you capture the benefits of CWCOT, please contact Jeffrey Clark at jeffrey.clark@crfservices.com or 585.590.5422.
