crfs summarizes the recent enhancements FHA made to the CWCOT program

Enhancements to FHA’s Claims Without Conveyance of Title (CWCOT) Procedures

The provisions of Mortgagee Letter 2020-21 may be used immediately, but must be used for all foreclosure sales associated with defaulted mortgages scheduled to occur on or after 90 days from the date of the ML (July 7, 2020). For additional details, visit the HUD website –

  • The ML provides for a second appraisal upon vacancy for a property that had an exterior-only appraisal, where an interior appraisal could not be obtained;
    • This is permitted before foreclosure if any delay in obtaining the appraisal will not cause the foreclosure sale to be cancelled; or after foreclosure for the purpose of post-foreclosure sale efforts.


  • Updates the policy and allowable fee structure regarding independent third-party providers that conduct foreclosure sales or Post Foreclosure Sales Efforts under CWCOT procedures;
    • Up to an amount equal to three percent of the Property’s sales price where the independent third-party provider markets the Property, but does not conduct the sale; or
    • Five percent of the Property’s sales price where the independent third-party provider markets the Property and conducts the sale


  • Updates CAFMV discounts in FHA Connection and changing to tier based pricing factors.
    • The updated CAFMV discounts are available on FHA Connection and are effective with Foreclosure sales scheduled on or after August 1, 2020
    • The CAFMV adjustments will now be based on value bands and interior vs. exterior appraisals as opposed to the previous non-competitive vs. competitive model


  • New automatic extensions have been introduced which could impact the conveyance timeframe and post foreclosure efforts,
    • Automatic extensions for the purpose of post-foreclosure sale efforts can be applied to the conveyance timeframe when all other foreclosure time fames have been met


  • Allows Mortgagees to submit eviction costs and certain eligible property preservation expenses incurred during Post-Foreclosure sales opportunities;
    • HUD will reimburse for all reasonable preservation, protection and eviction expenses incurred prior to the expiration of any extensions to the deadlines for conveyance