FHA issued Mortgagee Letter 2022-08, adding an exclusive sales period for owner-occupants, HUD-approved nonprofits, and governmental entities in the claims without conveyance of title (CWCOT) process. Per the Mortgagee Letter, mortgagees that utilize the post-foreclosure sales efforts in the CWCOT process must list the properties for sale for an initial 30-day period exclusively for owner-occupant buyers, HUD-approved nonprofits and governmental entities. In addition, FHA:
- Extended the mortgagee’s conveyance timeline to provide owner-occupant buyers, HUD-approved nonprofits, and governmental entities additional time to obtain financing and complete the sale;
- Added a verification documentation requirement for owner-occupant buyers, governmental entities and HUD-approved nonprofits during the exclusive sales period; and
- Added a requirement that mortgagees report (in the Single Family Default Monitoring System) the Delinquency/Default Status Codes that apply to the foreclosure sale, CWCOT or CWCOT post-foreclosure sale outcomes at the end of each reporting cycle.
These provisions must be implemented for all post-foreclosure sales associated with defaulted FHA-insured mortgages scheduled to occur on or after August 3, 2022 (servicers may, however, implement the updates immediately).
Click to view the FHA Mortgagee Letter 2022-08: https://www.tenaco.com/wp-content/uploads/2022/05/FHA-Mortgagee-Letter-2022-08-FHA-Info-22-01-05-05-22.pdf
