www.hudclips.org U. S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT WASHINGTON, D. C. 20410-8000 January 30, 1989 OFFICE OF THE ASSISTANT SECRETARY FOR HOUSING- FEDERAL HOUSING COMMISSIONER Mortgagee Letter 89-8 TO: ALL APPROVED MORTGAGEES SUBJECT: Claims Without Conveyance of Title (CWCOT) - First Year End Concerns The first year of operation under the CWCOT program has passed and we find that there are still problem areas which must be addressed and corrected. Mortgagee Letter 87-20 , dated June 23, 1987, contained the procedures for bidding and payment of claims under the CWCOT rule. Mortgagee Letter 88-6 , dated February 29, 1988, addressed corrections, additions and clarification in areas which surfaced during the first phase of operation. This Mortgagee Letter addresses further concerns and previous concerns which have not been resolved. In Mortgagee Letter 88-6 , the criteria for mortgages which must be processed under this program was further clarified. However, our local HUD offices are still receiving HUD-91O22 forms on owner- occupied properties. Mortgagees must ascertain that the property is FHA-insured and vacant or non-owner occupied prior to considering use of the CWCOT program and submitting the HUD-91O22 form. Mortgagees must inform their foreclosure attorneys about the applicable criteria and the correct procedure to follow under this program. Many staff hours have been wasted because of these errors. Please review and adhere to the criteria for applicable mortgages and the instructions outlined in Mortgagee Letters 87-20 and 88-6. Listed below are some areas in which mortgagees have been negligent. The CWCOT Program procedure must be followed in its entirety for this program to operate effectively. Therefore, it is the mortgagee's responsibility to: 1. Prepare accurate and complete HUD-9lO22 forms. Questions regarding completion of the forms should be directed to the local HUD Office. 2. Request an appraiser assignment the same day the HUD- 91O22 form is prepared. Follow the appraiser assignment request process unless directed otherwise by the local HUD Office. Complete and sign the HUD-92800 form. Questions regarding completion should be directed to the local HUD Office. 2 3. Submit the HUD-91O22 to the local HUD Office and forward the HUD-928OO to the assigned appraiser no later than 45 days prior to the estimated foreclosure sale date. HUD Offices require this time to complete the process and provide the Commissioner's Adjusted Fair Market Value (CAFMV) of the property at least 5 days prior to the actual foreclosure sale date. The appraisal is required to calculate the CAFMV. NOTE: If a property is identified as applicable to the CWCOT procedure in less than the 45 day time frame; i.e., upon inspection, the property is found vacant, and time constraints do not allow you to proceed under this program, you must document your files stating the specific reason(s) why the property could not be processed under the CWCOT. However, contact the local HUD Office to determine if priority servicing would allow the property to be processed in time for the sale. 4. Inform foreclosure attorneys, who are handling this procedure on your behalf, to submit the required CWCOT forms on CWCOT properties only. Do not submit the CWCOT documents on foreclosed FHA-insured properties which do not fall under this program. Also, please label documents submitted "CWCOT" property. 5. Notify the local HUD Office Single Family Loan Management Branch of the actual foreclosure sale date, as instructed in Mortgagee Letter 87-20, page 3, II.A.4. Local HUD Offices will not forward the CAFMV to the mortgagee until they receive the actual foreclosure sale date. (See attachment to determine which local HUD Office should receive the documents. The three digit prefix of the FHA Case Number identifies the office which has jurisdiction over the property.) 6. Notify the local HUD Office of the foreclosure sale outcome, as instructed in Mortgagee Letter 88-6, page 3, IV.A. The foreclosure sale outcome will help HUD to determine the success of this program. 3 This program requires considerable interaction between the HUD- approved mortgagees and the local HUD Offices. Your cooperation and assistance in processing the CWCOT properties in accordance with the prescribed procedure shall be appreciated. If you have any questions regarding the CWCOT procedure, please contact the local HUD Office having jurisdiction over the property. Sincerely yours, James E. Schoenberger General Deputy Assistant Secretary for Housing Attachment ATTACHMENT - ML 89- HUD FIELD OFFICE CODES* (3-DIGIT PREFIXES BEGINNING 12 AND 13 DIGIT FHA CASE NUMBERS) FIELD OFFICE FIELD OFFICE CODES FIELD OFFICE FIELD OFFICE CODES LOCATION LOCATION ------------ ------------------ ------------- ------------------ REGION I BANGOR 231/232 REGION VI BOSTON 251/252/253 ALBUQUERQUE 361 BURLINGTON 531/532/533 DALLAS 491 HARTFORD 061/062 FT. WORTH 492/171/172 MANCHESTER 341 HOUSTON 493/496/173 PROVIDENCE 451 LITTLE ROCK 031/499/032/033 LUBBOCK 494/497 REGION II NEW ORLEANS 221 ALBANY 371/378 OKLAHOMA CITY 421 BUFFALO 372/375 SAN ANTONIO 495 CAMDEN 351 SHREVEPORT 222/498/223 CARIBBEAN 501/821/811 TULSA 422 NEW YORK 374/373 NEWARK 352 REGION VII DES MOINES 161/162/163 KANSAS CITY 291/182 REGION III OMAHA 321/169 BALTIMORE 241/242/243/549 ST. LOUIS 292/293 CHARLESTON 571/572/573 TOPEKA 181/183 PHILADELPHIA 441 PITTSBURGH 442/443 REGION VIII RICHMOND 541/542/543/545/ CASPER 591/592/593 546/547 DENVER 051 WASHINGTON DC 249/548/081 FARGO 401/279 WILMINGTON 071 HELENA 311/312 SALT LAKE 521/029/522 REGION IV CITY ATLANTA 101/102/103/104 SIOUX FALLS 471/472 BIRMINGHAM 011/012 COLUMBIA 461 CORAL GABLES 092/098 REGION IX GREENSBORO 381/382 FRESNO 045 JACKSON 281/282/283/284 HONOLULU 141/831/851/861/871 JACKSONVILLE 091/099 LAS VEGAS 332 KNOXVILLE 481/109 LOS ANGELES 041/196 LOUISVILLE 201/202/203/204/ PHOENIX 021 205 RENO 331/049/333/334 MEMPHIS 482/289 SACRAMENTO 043/192 NASHVILLE 483 SAN DIEGO 044 ORLANDO 094 SAN FRANCISCO 042 TAMPA 093 SANTA ANA 046/047/193 TUCSON 022 REGION V CHICAGO 131/134 REGION X CINCINNATI 411 ANCHORAGE 111 CLEVELAND 412 BOISE 121/122/123/124/439 COLUMBUS 413/414 PORTLAND 431/569/432 DETROIT 261 SEATTLE 561/564/565 FLINT 262 SPOKANE 562/129/563 GRAND RAPIDS 263 INDIANAPOLIS 151/152/153/154 MILWAUKEE 581/582 *Lender option codes are listed by MINN/ST. PAUL 271/272/273 HUD office with servicing SPRINGFIELD 132/133/135/136 jurisdiction.