Success with the FHA’s CWCOT Program
Tuesday, August 2, 2016 – Today, FHA loans are among the most risky in the servicer’s portfolio. When these loans go into default, it’s in everyone’s best interests that they are moved back into the market as quickly as possible. To that end, FHA recently refocused attention on its “Claims Without Conveyance of Title” (CWCOT) program, which has been in effect since 1987.
In our new white paper, we explore how the program serves to encourage third parties to purchase assets at courthouse foreclosure sales instead of having servicers convey the assets to FHA asset managers. By allowing bids that do not amount to the total debt owed on the asset, the program seeks to decrease the number of homes in the U.S. Department of Housing and Urban Development (HUD) inventory.
With the FHA still under pressure to cut its carrying costs – primarily marketing and managing the assets – CWCOT will likely remain in effect for quite some time. The problem is that few if any servicers, particularly bank-owned firms, are staffed properly to execute the CWCOT program effectively.
Chronos is already helping a number of servicers take advantage of this program. Download a copy of our CWCOT White Paper here.