AWACSMortgage compliance intelligence from Flightline

FHA · Mortgagee Letter ML 2025-13 · Published

Updates to CWCOT Post-Foreclosure Sales Period and HUD REO Exclusive Listing Period

HUD establishes a 60-day post-foreclosure sales period open to all third parties for CWCOT and resets the REO exclusive listing period to 15 days for insured properties and 5 days for uninsured properties. Mortgagees must report updated default status codes and submit claim parts within revised timeframes.

Action requiredEffective May 30, 2025 · may adopt nowChecks passed· adjusted automaticallyRead the letter ↗ (opens in a new tab)

Loan impact

From the letter text · needs review

Applies to: Defaulted FHA-insured mortgages undergoing CWCOT post-foreclosure sales efforts and HUD single-family REO properties.

Addressed to
All FHA-Approved Mortgagees
Investor
FHAFrom the publisher, not quoted from the text
Programs
FHAFrom the publisher, not quoted from the text
Affected area
Foreclosure
Effective
May 30, 2025Sellers may implement immediately
Applicability confidence
Needs review: some rows could not be matched to a quote from the source
Supporting quotes from the letter
  • affected areas“Mortgagees that utilize the post-foreclosure sales efforts must list theProperty for sale to all third parties for a 60-Day period.”

What changed

From the letter text · Sections III.A.2.s.iii(F)(1), III.A.2.s.iii(F), III.A.2.s.iii(F)(2)(a), III.A.2.s.iii(G), IV.A.2.d.iii, IV.B.2.f.v(B)(1)
RequirementPreviouslyNow
CWCOT post-foreclosure sales listing periodChangedRequiredSection III.A.2.s.iii(F)(1)Previously: An exclusive 30-Day sales period for Owner-Occupant Buyers, HUD-approved Nonprofits, and Government Entities as part of the CWCOT post-foreclosure sale process.Mortgagees that utilize post-foreclosure sales efforts must list the property for sale to all third parties for a 60-day period.
CWCOT auction property condition disclosureTightenedRequiredSection III.A.2.s.iii(F)Not statedThe mortgagee's third-party provider must indicate that the property is sold as-is with unknown condition including potential hazards or SFHA location, and must clearly disclose in auction information if the property is occupied based on appraisal or inspection.
Conveyance time frame if CWCOT property does not sellNewRequiredSection III.A.2.s.iii(F)(2)(a)Not statedThe mortgagee must convey the property to HUD within 30 days of the end of the post-foreclosure sales period if it does not sell.
Single Family Default Reporting DDS Codes for CWCOTChangedRequiredSection III.A.2.s.iii(G)Not statedMortgagees must report the Delinquency/Default Status codes that apply to foreclosure sales, CWCOT, or CWCOT post-foreclosure sale outcomes at the end of each reporting cycle.
Claim Form Parts A and B submission timeframe for electronic filingChangedRequiredSection IV.A.2.d.iiiNot statedMortgagees must submit Parts A and B no later than two days after the date the form was prepared when filing via EDI, FHA Catalyst, or FHAC, and when submitting through FHA Catalyst, the servicer must also include Parts C, D, and E.
Length of HUD REO exclusive listing periodChangedSection IV.B.2.f.v(B)(1)Previously: The exclusive listing period for HUD REO properties for owner-occupant buyers, HUD-approved nonprofits, and government entities was 30 days.The exclusive listing period is 15 days for properties marketed as insured or insured with escrow, and 5 days for properties marketed as uninsured.

What to do

AWACS interpretation · not source language

What to review: Review the mandatory updates to the 60-day CWCOT post-foreclosure sales period, vendor auction disclosures, 30-day conveyance deadlines, default reporting codes, and electronic claim filing timeframes effective May 30, 2025.

Servicing

Effective for post-foreclosure sales scheduled on or after May 30, 2025, list CWCOT properties for sale to all third parties for a 60-day period, mandate required third-party auction condition disclosures, convey unsold properties to HUD within 30 days after the sales period, report proper Delinquency/Default Status codes at each reporting cycle, and submit electronic claim Parts A and B within two days of form preparation.

QC implications

  • Sample CWCOT files to ensure post-foreclosure listings are open to all third parties for the full 60-day period.
  • Verify auction listings include disclosures of as-is condition, potential hazards or flood zone status, and occupancy.
  • Audit unsold post-foreclosure properties to confirm conveyance to HUD occurs within 30 days of the sales period ending.
  • Test reporting cycles to confirm appropriate Delinquency/Default Status codes are submitted for foreclosure and CWCOT outcomes.
  • Review electronic claim submissions to verify Parts A and B are submitted within two days of preparation.

Source and record

Version 1 · archived

Checks

  • Source verified: Passed

    The document ID, link and publication date match the official source.

  • Quotes match the source: Passed, adjusted automatically

    Every quoted passage appears word for word in the official document.

    • A detail the source does not support was removed or adjusted

  • Requirements backed by the source: Passed, adjusted automatically

    Anything marked required is backed by the requirement language and dates in the source.

    • A detail the source does not support was removed or adjusted
    • An independent check could not confirm a requirement; it is shown as review, not action

  • In scope: Passed

    The document is about residential mortgage lending.

  • Format and labels: Passed, adjusted automatically

    The record follows the AWACS format and uses its standard labels.

    • A detail the source does not support was removed or adjusted