Can someone explain, "FHA CWCOT"?

Question

FHA CWCOT

Ran across a property that was being sold via FHA CWCOT... I know it has something to do with conveyances and foreclosure...but I'm having difficulty understanding how it's different from an auction, or is it?

Darcey OCallaghan · Answer

@Greg H. Can you offer any guidance on how long a house will remain in CWCOT status before it transfers to HUD? I read something about a HUD deadline but can't figure out how to estimate it. I was told by the Xome auctioneer that "they want $139-143k." I don't understand how it could be a range, rather than a reserve bottom, but regardless, $139k is more than I want to pay. Can I expect to have more price leverage after it passes to HUD? Thanks in advance!

Greg H. · Answer

So a CWCOT property is a property that has been foreclosed on.  The lender is trying to recoup their money instead of exercising their right to collect on the FHA insurance.  My experience is that these properties are very rarely a deal as the lender can always elect to collect from HUD.

Wayne Brooks · Answer

@Lauren Ruppert It doesn’t affect you, aside from some additional fees may not be charged, it’s just a method where HUD doesn’t have to take title to the property from the lender. It is essentially the same as the foreclosure auction, without much of the inherited liens risk, and is all cash.