source:
  type: regulation
  id: hud-ml-2026-03
  authority: HUD Mortgagee Letter 2026-03
  description: HUD Mortgagee Letter 2026-03 (January 29, 2026) — Updates to Bidding at Foreclosure and
    Post-Foreclosure Sales Efforts. Revises foreclosure-sale bidding and Claims Without Conveyance of
    Title (CWCOT), including Post-Foreclosure Sales Efforts, and eliminates the small servicer exception;
    may be implemented immediately but mandatory for foreclosure sales scheduled on or after April 29,
    2026 for all FHA-insured Title II Single Family forward mortgage programs (except Hawaiian Home Lands
    and Indian Land Mortgages). Full verbatim text captured section-by-section from the HUD source PDF.
obligations:
- id: hud-ml-2026-03-subject
  canonical_id: hud-ml-2026-03-subject
  section: HUD ML 2026-03 — Subject
  type: reference
  tags:
  - round-b
  - regulator-direct
  - hud-ml
  - fha
  - full-text
  - servicing
  - foreclosure
  - cwcot
  - claims
  - ml-2026-03
  primary_source:
    tier: 1
    authority: HUD Mortgagee Letter 2026-03 — Updates to Bidding at Foreclosure and Post-Foreclosure Sales
      Efforts — Subject
    source_class: hud-ml-pdf
    source_url: https://www.hud.gov/sites/default/files/hudclips/documents/2026-03hsgml.pdf
    snapshot_id: 388709fbee965e0a
    fetched_at: '2026-07-13T02:16:19Z'
    content_hash: sha256:735c0c3bc9c2d315ff23be492d2820af7e0d596bd413c2fd96286822cd1ad447
    paragraph_quote: Updates to Bidding at Foreclosure and Post-Foreclosure Sales Efforts
- id: hud-ml-2026-03-purpose
  canonical_id: hud-ml-2026-03-purpose
  section: HUD ML 2026-03 — Purpose
  type: reference
  tags:
  - round-b
  - regulator-direct
  - hud-ml
  - fha
  - full-text
  - servicing
  - foreclosure
  - cwcot
  - claims
  - ml-2026-03
  primary_source:
    tier: 1
    authority: HUD Mortgagee Letter 2026-03 — Updates to Bidding at Foreclosure and Post-Foreclosure Sales
      Efforts — Purpose
    source_class: hud-ml-pdf
    source_url: https://www.hud.gov/sites/default/files/hudclips/documents/2026-03hsgml.pdf
    snapshot_id: 388709fbee965e0a
    fetched_at: '2026-07-13T02:16:19Z'
    content_hash: sha256:735c0c3bc9c2d315ff23be492d2820af7e0d596bd413c2fd96286822cd1ad447
    paragraph_quote: This Mortgagee Letter (ML) updates the requirements for bidding at a foreclosure
      sale and for utilizing Claims Without Conveyance of Title (CWCOT), including Post-Foreclosure Sales
      Efforts.
- id: hud-ml-2026-03-effective-date
  canonical_id: hud-ml-2026-03-effective-date
  section: HUD ML 2026-03 — Effective Date
  type: reference
  tags:
  - round-b
  - regulator-direct
  - hud-ml
  - fha
  - full-text
  - servicing
  - foreclosure
  - cwcot
  - claims
  - ml-2026-03
  primary_source:
    tier: 1
    authority: HUD Mortgagee Letter 2026-03 — Updates to Bidding at Foreclosure and Post-Foreclosure Sales
      Efforts — Effective Date
    source_class: hud-ml-pdf
    source_url: https://www.hud.gov/sites/default/files/hudclips/documents/2026-03hsgml.pdf
    snapshot_id: 388709fbee965e0a
    fetched_at: '2026-07-13T02:16:19Z'
    content_hash: sha256:735c0c3bc9c2d315ff23be492d2820af7e0d596bd413c2fd96286822cd1ad447
    paragraph_quote: The provisions of this ML may be implemented immediately but must be implemented
      for foreclosure sales scheduled on or after April 29, 2026. All updates will be incorporated into
      a forthcoming update of the HUD Handbook 4000.1, FHA Single Family Housing Policy Handbook (Handbook
      4000.1).
- id: hud-ml-2026-03-affected-programs
  canonical_id: hud-ml-2026-03-affected-programs
  section: HUD ML 2026-03 — Affected Programs
  type: reference
  tags:
  - round-b
  - regulator-direct
  - hud-ml
  - fha
  - full-text
  - servicing
  - foreclosure
  - cwcot
  - claims
  - ml-2026-03
  primary_source:
    tier: 1
    authority: HUD Mortgagee Letter 2026-03 — Updates to Bidding at Foreclosure and Post-Foreclosure Sales
      Efforts — Affected Programs
    source_class: hud-ml-pdf
    source_url: https://www.hud.gov/sites/default/files/hudclips/documents/2026-03hsgml.pdf
    snapshot_id: 388709fbee965e0a
    fetched_at: '2026-07-13T02:16:19Z'
    content_hash: sha256:735c0c3bc9c2d315ff23be492d2820af7e0d596bd413c2fd96286822cd1ad447
    paragraph_quote: The provisions of this ML apply to all FHA-insured Title II Single Family forward
      mortgage programs, except for Hawaiian Home Lands Mortgages and Insured Mortgages on Indian Land.
- id: hud-ml-2026-03-background-1
  canonical_id: hud-ml-2026-03-background-1
  section: HUD ML 2026-03 — Background (CWCOT and fair market value)
  type: reference
  tags:
  - round-b
  - regulator-direct
  - hud-ml
  - fha
  - full-text
  - servicing
  - foreclosure
  - cwcot
  - claims
  - ml-2026-03
  primary_source:
    tier: 1
    authority: HUD Mortgagee Letter 2026-03 — Updates to Bidding at Foreclosure and Post-Foreclosure Sales
      Efforts — Background (1)
    source_class: hud-ml-pdf
    source_url: https://www.hud.gov/sites/default/files/hudclips/documents/2026-03hsgml.pdf
    snapshot_id: 388709fbee965e0a
    fetched_at: '2026-07-13T02:16:19Z'
    content_hash: sha256:735c0c3bc9c2d315ff23be492d2820af7e0d596bd413c2fd96286822cd1ad447
    paragraph_quote: FHA’s CWCOT program allows a Mortgagee to file an insurance claim without transfer
      of title provided the Property is sold at foreclosure for at least its fair market value. HUD is
      responsible for determining a Property’s fair market value, which may include any adjustments the
      Secretary deems appropriate.
- id: hud-ml-2026-03-background-2
  canonical_id: hud-ml-2026-03-background-2
  section: HUD ML 2026-03 — Background (CAFMV and Post-Foreclosure Sales Efforts)
  type: reference
  tags:
  - round-b
  - regulator-direct
  - hud-ml
  - fha
  - full-text
  - servicing
  - foreclosure
  - cwcot
  - claims
  - ml-2026-03
  - cafmv
  primary_source:
    tier: 1
    authority: HUD Mortgagee Letter 2026-03 — Updates to Bidding at Foreclosure and Post-Foreclosure Sales
      Efforts — Background (2)
    source_class: hud-ml-pdf
    source_url: https://www.hud.gov/sites/default/files/hudclips/documents/2026-03hsgml.pdf
    snapshot_id: 388709fbee965e0a
    fetched_at: '2026-07-13T02:16:19Z'
    content_hash: sha256:735c0c3bc9c2d315ff23be492d2820af7e0d596bd413c2fd96286822cd1ad447
    paragraph_quote: This amount is referred to as the Commissioner’s Adjusted Fair Market Value (CAFMV).
      HUD regularly updates this amount based on market conditions and is continuing efforts to obtain
      additional information to continually improve and refine those adjustments. As part of the CWCOT
      program, HUD also established a Post- Foreclosure Sales Efforts procedure, which permits Mortgagees
      a second attempt to achieve a third-party sale in lieu of conveying the Property to HUD.
- id: hud-ml-2026-03-background-3
  canonical_id: hud-ml-2026-03-background-3
  section: HUD ML 2026-03 — Background (CAFMV bidding policy and elimination of small servicer exemption)
  type: reference
  tags:
  - round-b
  - regulator-direct
  - hud-ml
  - fha
  - full-text
  - servicing
  - foreclosure
  - cwcot
  - claims
  - ml-2026-03
  - cafmv
  primary_source:
    tier: 1
    authority: HUD Mortgagee Letter 2026-03 — Updates to Bidding at Foreclosure and Post-Foreclosure Sales
      Efforts — Background (3)
    source_class: hud-ml-pdf
    source_url: https://www.hud.gov/sites/default/files/hudclips/documents/2026-03hsgml.pdf
    snapshot_id: 388709fbee965e0a
    fetched_at: '2026-07-13T02:16:19Z'
    content_hash: sha256:735c0c3bc9c2d315ff23be492d2820af7e0d596bd413c2fd96286822cd1ad447
    paragraph_quote: The use of CAFMV ensures that this alternative to conveying the Property adequately
      offsets the losses to the Mutual Mortgage Insurance Fund (MMIF). In many cases, HUD potential losses
      exceed what a state allows to be included in a credit bid. For example, when the Borrower has received
      a Partial Claim, the amount of the debt would not be included in the Mortgagee’s credit bid, and
      HUD has limited opportunity to recapture those losses. Nevertheless, HUD recognizes the challenges
      Mortgagees face when required to bid an amount greater than the credit bid at a foreclosure sale.
      Through this ML, HUD is restating its policy that a Mortgagee may only participate in the CWCOT
      program if the Mortgagee bids CAFMV at the foreclosure sale. HUD is also now permitting Mortgagees
      to bid below the CAFMV at foreclosure sale and then elect to convey the Property to HUD or forgo
      filing a claim. In light of this change, HUD is also eliminating the exemption for small servicers
      because they can convey the Property to HUD instead if they are unable to meet the CAMFV bidding
      requirement. HUD believes these changes align with HUD’s broader goals to safeguard the MMIF in
      stewardship of taxpayer dollars, making it easier to do business with HUD.
- id: hud-ml-2026-03-summary-of-changes
  canonical_id: hud-ml-2026-03-summary-of-changes
  section: HUD ML 2026-03 — Summary of Changes
  type: reference
  tags:
  - round-b
  - regulator-direct
  - hud-ml
  - fha
  - full-text
  - servicing
  - foreclosure
  - cwcot
  - claims
  - ml-2026-03
  primary_source:
    tier: 1
    authority: HUD Mortgagee Letter 2026-03 — Updates to Bidding at Foreclosure and Post-Foreclosure Sales
      Efforts — Summary of Changes
    source_class: hud-ml-pdf
    source_url: https://www.hud.gov/sites/default/files/hudclips/documents/2026-03hsgml.pdf
    snapshot_id: 388709fbee965e0a
    fetched_at: '2026-07-13T02:16:19Z'
    content_hash: sha256:735c0c3bc9c2d315ff23be492d2820af7e0d596bd413c2fd96286822cd1ad447
    paragraph_quote: 'This ML: • replaces Claims Without Conveyance of Title (III.A.2.p.iii) with Foreclosure
      Sales and Post-Foreclosure Sales Efforts (III.A.2.p.iii); • deletes Small Servicer Exception (III.A.2.p.iii(B)(3));
      • updates Reporting Foreclosure/CWCOT Outcomes (III.A.4.a.ii(G)(6)); • updates Foreclosure and Acquisition
      Costs – Standard (IV.A.2.a.ii(L)(2)); • adds Foreclosure and Acquisition Costs (IV.A.2.d.ii(F));
      and • updates Submission of Claim Form Parts to HUD for CWCOT (IV.A.2.d.iii).'
- id: hud-ml-2026-03-hb-required-appraisal
  canonical_id: hud-ml-2026-03-hb-required-appraisal
  section: HUD ML 2026-03 — Foreclosure Sales and Post-Foreclosure Sales Efforts (III.A.2.p.iii) — (A)(1)
    Required Appraisal
  type: do
  tags:
  - round-b
  - regulator-direct
  - hud-ml
  - fha
  - full-text
  - servicing
  - foreclosure
  - cwcot
  - claims
  - ml-2026-03
  - appraisal
  primary_source:
    tier: 1
    authority: HUD Mortgagee Letter 2026-03 — Updates to Bidding at Foreclosure and Post-Foreclosure Sales
      Efforts — Property Valuation — Required Appraisal (III.A.2.p.iii(A)(1))
    source_class: hud-ml-pdf
    source_url: https://www.hud.gov/sites/default/files/hudclips/documents/2026-03hsgml.pdf
    snapshot_id: 388709fbee965e0a
    fetched_at: '2026-07-13T02:16:19Z'
    content_hash: sha256:735c0c3bc9c2d315ff23be492d2820af7e0d596bd413c2fd96286822cd1ad447
    paragraph_quote: Foreclosure Sales and Post-Foreclosure Sales Efforts (III.A.2.p.iii) (A) Property
      Valuation and Commissioner’s Adjusted Fair Market Value (1) Required Appraisal Unless otherwise
      directed by HUD, Mortgagees must first obtain and review for accuracy an “As-Is” FHA appraisal,
      which includes both an interior and exterior evaluation of the Property. The FHA appraisal must
      be completed in accordance with the Claims Without Conveyance of Title Properties (II.D.11.e.iii(H))
      requirements. If the Property is occupied and an interior appraisal cannot be obtained, an exterior-only
      appraisal may be used.
- id: hud-ml-2026-03-hb-appraisal-validity
  canonical_id: hud-ml-2026-03-hb-appraisal-validity
  section: HUD ML 2026-03 — (A)(1)(a) Appraisal Validity Period and (b) Extension
  type: do
  tags:
  - round-b
  - regulator-direct
  - hud-ml
  - fha
  - full-text
  - servicing
  - foreclosure
  - cwcot
  - claims
  - ml-2026-03
  - appraisal
  primary_source:
    tier: 1
    authority: HUD Mortgagee Letter 2026-03 — Updates to Bidding at Foreclosure and Post-Foreclosure Sales
      Efforts — Appraisal Validity Period and Extension (III.A.2.p.iii(A)(1)(a)-(b))
    source_class: hud-ml-pdf
    source_url: https://www.hud.gov/sites/default/files/hudclips/documents/2026-03hsgml.pdf
    snapshot_id: 388709fbee965e0a
    fetched_at: '2026-07-13T02:16:19Z'
    content_hash: sha256:735c0c3bc9c2d315ff23be492d2820af7e0d596bd413c2fd96286822cd1ad447
    paragraph_quote: (a) Appraisal Validity Period The appraisal must be valid on the date of the foreclosure
      sale. Appraisals are valid for 180 Days from the effective date of the appraisal report. (b) Extension
      to Appraisal Validity Period HUD provides an automatic 30-Day extension from the appraisal expiration
      date for delays due to bankruptcy, court delays, or delays outside of the Mortgagee’s control. The
      Mortgagee must request and obtain HUD approval via EVARS for extensions beyond the automatic 30-Day
      extension.
- id: hud-ml-2026-03-hb-subsequent-appraisals
  canonical_id: hud-ml-2026-03-hb-subsequent-appraisals
  section: HUD ML 2026-03 — (A)(1)(c) Subsequent Appraisals for Foreclosure Sales and Post-Foreclosure
    Sales Efforts
  type: do
  tags:
  - round-b
  - regulator-direct
  - hud-ml
  - fha
  - full-text
  - servicing
  - foreclosure
  - cwcot
  - claims
  - ml-2026-03
  - appraisal
  primary_source:
    tier: 1
    authority: HUD Mortgagee Letter 2026-03 — Updates to Bidding at Foreclosure and Post-Foreclosure Sales
      Efforts — Subsequent Appraisals (III.A.2.p.iii(A)(1)(c))
    source_class: hud-ml-pdf
    source_url: https://www.hud.gov/sites/default/files/hudclips/documents/2026-03hsgml.pdf
    snapshot_id: 388709fbee965e0a
    fetched_at: '2026-07-13T02:16:19Z'
    content_hash: sha256:735c0c3bc9c2d315ff23be492d2820af7e0d596bd413c2fd96286822cd1ad447
    paragraph_quote: '(c) Subsequent Appraisals for Foreclosure Sales and Post- Foreclosure Sales Efforts
      If a Property that had an exterior-only appraisal becomes vacant, the Mortgagee must obtain a new
      appraisal that includes both an interior and exterior inspection if: • before foreclosure, any delay
      due to obtaining a new appraisal will not cause the foreclosure sale to be canceled; or • after
      foreclosure, the Mortgagee conducts Post-Foreclosure Sales Efforts. Mortgagees must use an FHA Roster
      Appraiser to conduct the new appraisal.'
- id: hud-ml-2026-03-hb-subsequent-appraisal-reimbursement
  canonical_id: hud-ml-2026-03-hb-subsequent-appraisal-reimbursement
  section: HUD ML 2026-03 — (A)(1)(c) Reimbursement for new appraisal following vacancy
  type: do
  tags:
  - round-b
  - regulator-direct
  - hud-ml
  - fha
  - full-text
  - servicing
  - foreclosure
  - cwcot
  - claims
  - ml-2026-03
  - appraisal
  - claims
  primary_source:
    tier: 1
    authority: HUD Mortgagee Letter 2026-03 — Updates to Bidding at Foreclosure and Post-Foreclosure Sales
      Efforts — New appraisal reimbursement (III.A.2.p.iii(A)(1)(c))
    source_class: hud-ml-pdf
    source_url: https://www.hud.gov/sites/default/files/hudclips/documents/2026-03hsgml.pdf
    snapshot_id: 388709fbee965e0a
    fetched_at: '2026-07-13T02:16:19Z'
    content_hash: sha256:735c0c3bc9c2d315ff23be492d2820af7e0d596bd413c2fd96286822cd1ad447
    paragraph_quote: HUD will reimburse the Mortgagee for the cost of one new appraisal following vacancy
      through the FHA insurance claim.
- id: hud-ml-2026-03-hb-appraisal-damage-updated-documentation
  canonical_id: hud-ml-2026-03-hb-appraisal-damage-updated-documentation
  section: HUD ML 2026-03 — (A)(1)(d) Damage after Appraisal, (e) Updated Appraisals due to Postponed
    Foreclosure Sales, (f) Required Documentation
  type: do
  tags:
  - round-b
  - regulator-direct
  - hud-ml
  - fha
  - full-text
  - servicing
  - foreclosure
  - cwcot
  - claims
  - ml-2026-03
  - appraisal
  primary_source:
    tier: 1
    authority: HUD Mortgagee Letter 2026-03 — Updates to Bidding at Foreclosure and Post-Foreclosure Sales
      Efforts — Damage / Updated Appraisals / Required Documentation (III.A.2.p.iii(A)(1)(d)-(f))
    source_class: hud-ml-pdf
    source_url: https://www.hud.gov/sites/default/files/hudclips/documents/2026-03hsgml.pdf
    snapshot_id: 388709fbee965e0a
    fetched_at: '2026-07-13T02:16:19Z'
    content_hash: sha256:735c0c3bc9c2d315ff23be492d2820af7e0d596bd413c2fd96286822cd1ad447
    paragraph_quote: (d) Damage to the Property after Appraisal The Mortgagee must request a variance
      from HUD via EVARS to proceed with the current appraised value if the Mortgagee becomes aware that
      the Property sustained significant damage, other than damage resulting from Borrower neglect, that
      may impact the value after the appraisal was completed. If HUD denies this request, additional instructions
      will be provided with the denial. (e) Updated Appraisals due to Postponed Foreclosure Sales If the
      foreclosure sale does not take place within 180 Days from the effective date of the appraisal, and
      within such additional time provided under Extension to Appraisal Validity Period, the Mortgagee
      must request an updated appraisal and obtain an updated Commissioner’s Adjusted Fair Market Value
      (CAFMV). (f) Required Documentation Mortgagees must upload the appraisal information and related
      FHA case number through HUD’s system of record (P260) within 30 Days of the date of the appraisal.
- id: hud-ml-2026-03-hb-cafmv-determination
  canonical_id: hud-ml-2026-03-hb-cafmv-determination
  section: HUD ML 2026-03 — (A)(2) Determining the CAFMV — Definition and Standard for Foreclosure Sales
  type: do
  tags:
  - round-b
  - regulator-direct
  - hud-ml
  - fha
  - full-text
  - servicing
  - foreclosure
  - cwcot
  - claims
  - ml-2026-03
  - cafmv
  primary_source:
    tier: 1
    authority: HUD Mortgagee Letter 2026-03 — Updates to Bidding at Foreclosure and Post-Foreclosure Sales
      Efforts — Determining CAFMV — Definition and Foreclosure Sales (III.A.2.p.iii(A)(2))
    source_class: hud-ml-pdf
    source_url: https://www.hud.gov/sites/default/files/hudclips/documents/2026-03hsgml.pdf
    snapshot_id: 388709fbee965e0a
    fetched_at: '2026-07-13T02:16:19Z'
    content_hash: sha256:735c0c3bc9c2d315ff23be492d2820af7e0d596bd413c2fd96286822cd1ad447
    paragraph_quote: (2) Determining the Commissioner’s Adjusted Fair Market Value (a) Definition The
      Commissioner’s Adjusted Fair Market Value (CAFMV) is HUD’s estimate of the Fair Market Value (FMV)
      of the mortgaged Property and is published in FHA Connection (FHAC). In cases where the jurisdiction
      mandates a specific bid at the foreclosure sale, that becomes the CAFMV for the foreclosure sale.
      (b) Standard (i) Foreclosure Sales After determining the Property’s appraised value using the most
      recent appraisal, the Mortgagee’s authorized employees must access the CAFMV link in FHAC to determine
      a Property’s CAFMV. The CAFMV remains valid and in effect for 120 Days from the date of the appraisal.
- id: hud-ml-2026-03-hb-cafmv-validity-expires
  canonical_id: hud-ml-2026-03-hb-cafmv-validity-expires
  section: HUD ML 2026-03 — (A)(2)(b)(i) CAFMV update on expiry of 120-Day validity period
  type: do
  tags:
  - round-b
  - regulator-direct
  - hud-ml
  - fha
  - full-text
  - servicing
  - foreclosure
  - cwcot
  - claims
  - ml-2026-03
  - cafmv
  primary_source:
    tier: 1
    authority: HUD Mortgagee Letter 2026-03 — Updates to Bidding at Foreclosure and Post-Foreclosure Sales
      Efforts — CAFMV validity expiry (III.A.2.p.iii(A)(2)(b)(i))
    source_class: hud-ml-pdf
    source_url: https://www.hud.gov/sites/default/files/hudclips/documents/2026-03hsgml.pdf
    snapshot_id: 388709fbee965e0a
    fetched_at: '2026-07-13T02:16:19Z'
    content_hash: sha256:735c0c3bc9c2d315ff23be492d2820af7e0d596bd413c2fd96286822cd1ad447
    paragraph_quote: If the 120-Day validity period expires, Mortgagees must update the CAFMV.
- id: hud-ml-2026-03-hb-cafmv-post-foreclosure
  canonical_id: hud-ml-2026-03-hb-cafmv-post-foreclosure
  section: HUD ML 2026-03 — (A)(2)(b)(ii) CAFMV for Post-Foreclosure Sales Efforts
  type: do
  tags:
  - round-b
  - regulator-direct
  - hud-ml
  - fha
  - full-text
  - servicing
  - foreclosure
  - cwcot
  - claims
  - ml-2026-03
  - cafmv
  primary_source:
    tier: 1
    authority: HUD Mortgagee Letter 2026-03 — Updates to Bidding at Foreclosure and Post-Foreclosure Sales
      Efforts — CAFMV — Post-Foreclosure Sales Efforts (III.A.2.p.iii(A)(2)(b)(ii))
    source_class: hud-ml-pdf
    source_url: https://www.hud.gov/sites/default/files/hudclips/documents/2026-03hsgml.pdf
    snapshot_id: 388709fbee965e0a
    fetched_at: '2026-07-13T02:16:19Z'
    content_hash: sha256:735c0c3bc9c2d315ff23be492d2820af7e0d596bd413c2fd96286822cd1ad447
    paragraph_quote: (ii) Post-Foreclosure Sales Efforts Prior to listing the Property for Post-Foreclosure
      Sales Efforts, the Mortgagee must check FHAC. If the CAFMV has been updated, the Mortgagee must
      use the updated CAFMV for Post- Foreclosure Sales Efforts. In addition, if the Property was valued
      through an exterior-only appraisal and is vacant following the foreclosure sale, the Mortgagee must
      obtain a new appraisal that includes both an interior and exterior inspection and update the CAFMV
      accordingly.
- id: hud-ml-2026-03-hb-cwcot-qualification
  canonical_id: hud-ml-2026-03-hb-cwcot-qualification
  section: HUD ML 2026-03 — (B) Qualification Criteria for Claims Without Conveyance of Title
  type: do
  tags:
  - round-b
  - regulator-direct
  - hud-ml
  - fha
  - full-text
  - servicing
  - foreclosure
  - cwcot
  - claims
  - ml-2026-03
  primary_source:
    tier: 1
    authority: HUD Mortgagee Letter 2026-03 — Updates to Bidding at Foreclosure and Post-Foreclosure Sales
      Efforts — CWCOT Qualification Criteria (III.A.2.p.iii(B))
    source_class: hud-ml-pdf
    source_url: https://www.hud.gov/sites/default/files/hudclips/documents/2026-03hsgml.pdf
    snapshot_id: 388709fbee965e0a
    fetched_at: '2026-07-13T02:16:19Z'
    content_hash: sha256:735c0c3bc9c2d315ff23be492d2820af7e0d596bd413c2fd96286822cd1ad447
    paragraph_quote: '(B) Qualification Criteria for Claims Without Conveyance of Title (1) Definition
      Claims Without Conveyance of Title (CWCOT) is a procedure under which the Mortgagee attempts to
      secure a third-party purchaser for the mortgaged Property so that conveyance to HUD is not required
      in exchange for mortgage insurance benefits. (2) Standard Mortgagees must use the Commissioner’s
      Adjusted Fair Market Value (CAFMV) for all foreclosure sales and Post-Foreclosure Sales Efforts
      associated with defaulted FHA-insured Mortgages to utilize the CWCOT procedures. A Mortgage is eligible
      for CWCOT when all the following criteria are met: • the FHA-insured mortgage insurance is still
      active for the FHA case number; • the Mortgagee has worked with the Borrower to exhaust all applicable
      Home Retention Options and has determined that the Borrower’s case does not meet the criteria for
      a Home Disposition Option, or the Mortgagee has been unable to locate the Borrower and the Property
      is vacant or has been abandoned by the Borrower; and • the Property has no Surchargeable Damage
      (III.A.2.j.ii(E)(1)).'
- id: hud-ml-2026-03-hb-bidding-intro
  canonical_id: hud-ml-2026-03-hb-bidding-intro
  section: HUD ML 2026-03 — (C) Bidding at the Foreclosure Sale — Introduction
  type: do
  tags:
  - round-b
  - regulator-direct
  - hud-ml
  - fha
  - full-text
  - servicing
  - foreclosure
  - cwcot
  - claims
  - ml-2026-03
  - bidding
  primary_source:
    tier: 1
    authority: HUD Mortgagee Letter 2026-03 — Updates to Bidding at Foreclosure and Post-Foreclosure Sales
      Efforts — Bidding at the Foreclosure Sale — intro (III.A.2.p.iii(C))
    source_class: hud-ml-pdf
    source_url: https://www.hud.gov/sites/default/files/hudclips/documents/2026-03hsgml.pdf
    snapshot_id: 388709fbee965e0a
    fetched_at: '2026-07-13T02:16:19Z'
    content_hash: sha256:735c0c3bc9c2d315ff23be492d2820af7e0d596bd413c2fd96286822cd1ad447
    paragraph_quote: (C) Bidding at the Foreclosure Sale At the foreclosure sale, the claim and disposition
      requirements depend on whether the successful bidder is the Mortgagee or a third party and on the
      bid amount relative to the CAFMV.
- id: hud-ml-2026-03-hb-bidding-must-bid-cafmv
  canonical_id: hud-ml-2026-03-hb-bidding-must-bid-cafmv
  section: HUD ML 2026-03 — (C) Bidding at the Foreclosure Sale — must bid CAFMV to file a CWCOT claim
  type: do
  tags:
  - round-b
  - regulator-direct
  - hud-ml
  - fha
  - full-text
  - servicing
  - foreclosure
  - cwcot
  - claims
  - ml-2026-03
  - bidding
  primary_source:
    tier: 1
    authority: HUD Mortgagee Letter 2026-03 — Updates to Bidding at Foreclosure and Post-Foreclosure Sales
      Efforts — Must bid CAFMV to file CWCOT claim (III.A.2.p.iii(C))
    source_class: hud-ml-pdf
    source_url: https://www.hud.gov/sites/default/files/hudclips/documents/2026-03hsgml.pdf
    snapshot_id: 388709fbee965e0a
    fetched_at: '2026-07-13T02:16:19Z'
    content_hash: sha256:735c0c3bc9c2d315ff23be492d2820af7e0d596bd413c2fd96286822cd1ad447
    paragraph_quote: The Mortgagee must bid the CAFMV to file a CWCOT claim. All conveyances must meet
      the requirements for Conveyance of Acquired Properties (III.A.2.r).
- id: hud-ml-2026-03-hb-mortgagee-successful-bidder
  canonical_id: hud-ml-2026-03-hb-mortgagee-successful-bidder
  section: HUD ML 2026-03 — (C)(1) Mortgagee as Successful Bidder
  type: do
  tags:
  - round-b
  - regulator-direct
  - hud-ml
  - fha
  - full-text
  - servicing
  - foreclosure
  - cwcot
  - claims
  - ml-2026-03
  - bidding
  primary_source:
    tier: 1
    authority: HUD Mortgagee Letter 2026-03 — Updates to Bidding at Foreclosure and Post-Foreclosure Sales
      Efforts — Mortgagee as Successful Bidder (III.A.2.p.iii(C)(1))
    source_class: hud-ml-pdf
    source_url: https://www.hud.gov/sites/default/files/hudclips/documents/2026-03hsgml.pdf
    snapshot_id: 388709fbee965e0a
    fetched_at: '2026-07-13T02:16:19Z'
    content_hash: sha256:735c0c3bc9c2d315ff23be492d2820af7e0d596bd413c2fd96286822cd1ad447
    paragraph_quote: '(1) Mortgagee as Successful Bidder (a) Amount Equal to the CAFMV If the Mortgagee
      is the successful bidder for an amount equal to the CAFMV, the Mortgagee may: • retain the Property
      and file a claim for insurance benefits under CWCOT; • convey the title to the Property to HUD and
      file a claim for insurance benefits as a conveyance claim; or • proceed to Post-Foreclosure Sales
      Efforts. (b) Amount Less than CAFMV Where the Mortgagee is the successful bidder at the foreclosure
      sale for an amount less than the CAFMV, the Mortgagee may either: • convey the Property to HUD and
      file a claim for insurance benefits as a conveyance claim; or • retain title and not file a claim
      for any insurance benefits. (c) Amount Greater than CAFMV Where the Mortgagee’s bid exceeds the
      CAFMV, resulting in the Mortgagee acquiring title to the Property at a foreclosure sale, unless
      the sheriff or other appropriate local authority has mandated the subject bid as the minimum bid
      that could be set for the Property, the Mortgagee is deemed to have elected to retain title of the
      Property, and the Mortgagee’s FHA claim for insurance benefits will be calculated in accordance
      with 24 CFR § 203.401(b). The Mortgagee may not utilize Post-Foreclosure Sales Efforts and may not
      convey title to the Property to HUD.'
- id: hud-ml-2026-03-hb-third-party-bidder-less
  canonical_id: hud-ml-2026-03-hb-third-party-bidder-less
  section: HUD ML 2026-03 — (C)(2)(a) Third Party as Successful Bidder — Amount Less than CAFMV
  type: do
  tags:
  - round-b
  - regulator-direct
  - hud-ml
  - fha
  - full-text
  - servicing
  - foreclosure
  - cwcot
  - claims
  - ml-2026-03
  - bidding
  primary_source:
    tier: 1
    authority: HUD Mortgagee Letter 2026-03 — Updates to Bidding at Foreclosure and Post-Foreclosure Sales
      Efforts — Third Party Successful Bidder — less than CAFMV (III.A.2.p.iii(C)(2)(a))
    source_class: hud-ml-pdf
    source_url: https://www.hud.gov/sites/default/files/hudclips/documents/2026-03hsgml.pdf
    snapshot_id: 388709fbee965e0a
    fetched_at: '2026-07-13T02:16:19Z'
    content_hash: sha256:735c0c3bc9c2d315ff23be492d2820af7e0d596bd413c2fd96286822cd1ad447
    paragraph_quote: (2) Third Party as Successful Bidder (a) Amount Less than CAFMV Where a third party
      is the successful bidder at the foreclosure sale for an amount less than the CAFMV, the Mortgagee
      may not file a claim for any insurance benefits.
- id: hud-ml-2026-03-hb-third-party-bidder-redemption
  canonical_id: hud-ml-2026-03-hb-third-party-bidder-redemption
  section: HUD ML 2026-03 — (C)(2)(b) Third Party Bidder Equal/Greater and (3) Borrower or Third Party
    Redemption
  type: do
  tags:
  - round-b
  - regulator-direct
  - hud-ml
  - fha
  - full-text
  - servicing
  - foreclosure
  - cwcot
  - claims
  - ml-2026-03
  - bidding
  - redemption
  primary_source:
    tier: 1
    authority: HUD Mortgagee Letter 2026-03 — Updates to Bidding at Foreclosure and Post-Foreclosure Sales
      Efforts — Third Party equal/greater and Redemption (III.A.2.p.iii(C)(2)(b)-(3))
    source_class: hud-ml-pdf
    source_url: https://www.hud.gov/sites/default/files/hudclips/documents/2026-03hsgml.pdf
    snapshot_id: 388709fbee965e0a
    fetched_at: '2026-07-13T02:16:19Z'
    content_hash: sha256:735c0c3bc9c2d315ff23be492d2820af7e0d596bd413c2fd96286822cd1ad447
    paragraph_quote: (b) Amount Equal to or Greater than CAFMV Where a third party is the successful bidder
      at the foreclosure sale for an amount equal to or greater than the CAFMV, the Mortgagee may submit
      its claim for insurance benefits under CWCOT. (3) Borrower or Third Party Redemption Notwithstanding
      the foreclosure sale, the Borrower or a third party may exercise a legal right and redeem the Property.
      Where the Borrower or a third party redeems the Property and acquires title for an amount not less
      than the CAFMV, the Mortgagee may submit its claim for insurance benefits under CWCOT.
- id: hud-ml-2026-03-hb-postforeclosure-def-eligibility
  canonical_id: hud-ml-2026-03-hb-postforeclosure-def-eligibility
  section: HUD ML 2026-03 — (D) CWCOT Post-Foreclosure Sales Efforts — Definition, Eligibility, Requirements
  type: do
  tags:
  - round-b
  - regulator-direct
  - hud-ml
  - fha
  - full-text
  - servicing
  - foreclosure
  - cwcot
  - claims
  - ml-2026-03
  - post-foreclosure
  primary_source:
    tier: 1
    authority: HUD Mortgagee Letter 2026-03 — Updates to Bidding at Foreclosure and Post-Foreclosure Sales
      Efforts — Post-Foreclosure Sales Efforts — Definition/Eligibility/Requirements (III.A.2.p.iii(D))
    source_class: hud-ml-pdf
    source_url: https://www.hud.gov/sites/default/files/hudclips/documents/2026-03hsgml.pdf
    snapshot_id: 388709fbee965e0a
    fetched_at: '2026-07-13T02:16:19Z'
    content_hash: sha256:735c0c3bc9c2d315ff23be492d2820af7e0d596bd413c2fd96286822cd1ad447
    paragraph_quote: (D) CWCOT Post-Foreclosure Sales Efforts (1) Definition Post-Foreclosure Sales Efforts
      refer to an additional opportunity to attempt to sell a Property at the CAFMV prior to conveying
      the Property to HUD. (2) Standard (a) Eligibility Mortgagees may participate in Post-Foreclosure
      Sales Efforts only if the Mortgagee bids the CAFMV at the foreclosure sale. (b) Requirements for
      Post-Foreclosure Sales Efforts To facilitate CWCOT Post-Foreclosure Sales Efforts, the Mortgagee
      may contribute an additional amount needed to raise a third party’s bid to the CAFMV and allow the
      sale of the Property to such third party. HUD will not reimburse any contribution by the Mortgagee
      to facilitate the sale through the FHA insurance claim. The Mortgagee or its third-party provider
      must indicate that the Property is being sold in an as-is condition, and the condition is unknown
      and may include defects, possible health or safety hazards, or debris, or the Property is located
      in a Special Flood Hazard Area (SFHA). Where the Property is occupied, based on the appraisal or
      property inspection, the Mortgagee must clearly indicate that the Property is occupied in the auction
      information.
- id: hud-ml-2026-03-hb-postforeclosure-period-extensions
  canonical_id: hud-ml-2026-03-hb-postforeclosure-period-extensions
  section: HUD ML 2026-03 — (D)(2)(c) Post-Foreclosure Sales Period and (d) Extensions of Time Frames
  type: do
  tags:
  - round-b
  - regulator-direct
  - hud-ml
  - fha
  - full-text
  - servicing
  - foreclosure
  - cwcot
  - claims
  - ml-2026-03
  - post-foreclosure
  primary_source:
    tier: 1
    authority: HUD Mortgagee Letter 2026-03 — Updates to Bidding at Foreclosure and Post-Foreclosure Sales
      Efforts — Post-Foreclosure Sales Period and Extensions (III.A.2.p.iii(D)(2)(c)-(d))
    source_class: hud-ml-pdf
    source_url: https://www.hud.gov/sites/default/files/hudclips/documents/2026-03hsgml.pdf
    snapshot_id: 388709fbee965e0a
    fetched_at: '2026-07-13T02:16:19Z'
    content_hash: sha256:735c0c3bc9c2d315ff23be492d2820af7e0d596bd413c2fd96286822cd1ad447
    paragraph_quote: (c) CWCOT Post-Foreclosure Sales Period Mortgagees that utilize Post-Foreclosure
      Sales Efforts must list the Property for sale to all third parties for a 60-Day period. (d) Extensions
      of Time Frames to Engage in Post-Foreclosure Sales Efforts HUD will provide the Mortgagee with an
      automatic extension of the conveyance time frames to attempt Post-Foreclosure Sales Efforts and
      commence possessory action, where applicable, for 60 Days from the date the foreclosure deed is
      filed for recording or the expiration of the redemption period, if applicable, in circumstances
      where the Mortgagee complied with all foreclosure time frames. (i) Conveyance Time Frame if Property
      Does Not Sell If the Property does not sell through Post-Foreclosure Sales Efforts, the Mortgagee
      must convey the Property to HUD within 30 Days of the end of the post-foreclosure sales period.
      (ii) Extension of Conveyance Time Frame to Allow for Closing Where a sales contract has been ratified
      before the expiration of the 60-Day period, HUD will provide the Mortgagee with an additional, automatic
      60-Day extension to the deadline for conveyance, from the date the sales contract has been ratified,
      to allow for closing of the sale.
- id: hud-ml-2026-03-hb-postforeclosure-preservation
  canonical_id: hud-ml-2026-03-hb-postforeclosure-preservation
  section: HUD ML 2026-03 — (D)(2)(e) Preservation and Protection during Post-Foreclosure Sales Periods
  type: do
  tags:
  - round-b
  - regulator-direct
  - hud-ml
  - fha
  - full-text
  - servicing
  - foreclosure
  - cwcot
  - claims
  - ml-2026-03
  - post-foreclosure
  - property-preservation
  primary_source:
    tier: 1
    authority: HUD Mortgagee Letter 2026-03 — Updates to Bidding at Foreclosure and Post-Foreclosure Sales
      Efforts — Preservation and Protection (III.A.2.p.iii(D)(2)(e))
    source_class: hud-ml-pdf
    source_url: https://www.hud.gov/sites/default/files/hudclips/documents/2026-03hsgml.pdf
    snapshot_id: 388709fbee965e0a
    fetched_at: '2026-07-13T02:16:19Z'
    content_hash: sha256:735c0c3bc9c2d315ff23be492d2820af7e0d596bd413c2fd96286822cd1ad447
    paragraph_quote: (e) Preservation and Protection during Post-Foreclosure Sales Periods The Mortgagee
      must preserve and protect the Property in accordance with HUD requirements during the post-foreclosure
      sales periods and throughout any approved extensions to deadlines for conveyance. HUD will reimburse
      the Mortgagee through the claim for all reasonable preservation, protection, and eviction expenses
      incurred prior to the expiration of any extension of the deadlines for conveyance, as listed in
      Property Preservation Allowances (III.A.2.r.iii(B)(5)).
- id: hud-ml-2026-03-hb-postforeclosure-third-party
  canonical_id: hud-ml-2026-03-hb-postforeclosure-third-party
  section: HUD ML 2026-03 — (D)(2)(f)(ii)-(iii) Third Party Bidder at Post-Foreclosure Sales Efforts
  type: do
  tags:
  - round-b
  - regulator-direct
  - hud-ml
  - fha
  - full-text
  - servicing
  - foreclosure
  - cwcot
  - claims
  - ml-2026-03
  - post-foreclosure
  - bidding
  primary_source:
    tier: 1
    authority: HUD Mortgagee Letter 2026-03 — Updates to Bidding at Foreclosure and Post-Foreclosure Sales
      Efforts — Third Party Bidder at Post-Foreclosure Sales Efforts (III.A.2.p.iii(D)(2)(f))
    source_class: hud-ml-pdf
    source_url: https://www.hud.gov/sites/default/files/hudclips/documents/2026-03hsgml.pdf
    snapshot_id: 388709fbee965e0a
    fetched_at: '2026-07-13T02:16:19Z'
    content_hash: sha256:735c0c3bc9c2d315ff23be492d2820af7e0d596bd413c2fd96286822cd1ad447
    paragraph_quote: '(ii) Amount Equal to or Greater than CAFMV Where a third party is the successful
      bidder at Post-Foreclosure Sales Efforts for an amount equal to or greater than the CAFMV, the Mortgagee
      may submit its claim for insurance benefits under CWCOT. (iii) Property Not Sold at Post-Foreclosure
      Sales Efforts Where the Property does not sell to a third party at Post- Foreclosure Sales Efforts,
      the Mortgagee may elect to: • retain title to the Property and not file a claim for any insurance
      benefits; or • convey the title to the Property to HUD and file a claim for insurance benefits as
      a conveyance claim.'
- id: hud-ml-2026-03-hb-independent-third-party
  canonical_id: hud-ml-2026-03-hb-independent-third-party
  section: HUD ML 2026-03 — (E) Independent Third-Party Providers — Definition and Standard
  type: do
  tags:
  - round-b
  - regulator-direct
  - hud-ml
  - fha
  - full-text
  - servicing
  - foreclosure
  - cwcot
  - claims
  - ml-2026-03
  - third-party-provider
  primary_source:
    tier: 1
    authority: HUD Mortgagee Letter 2026-03 — Updates to Bidding at Foreclosure and Post-Foreclosure Sales
      Efforts — Independent Third-Party Providers (III.A.2.p.iii(E))
    source_class: hud-ml-pdf
    source_url: https://www.hud.gov/sites/default/files/hudclips/documents/2026-03hsgml.pdf
    snapshot_id: 388709fbee965e0a
    fetched_at: '2026-07-13T02:16:19Z'
    content_hash: sha256:735c0c3bc9c2d315ff23be492d2820af7e0d596bd413c2fd96286822cd1ad447
    paragraph_quote: '(E) Independent Third-Party Providers (1) Definition An Independent Third-Party
      Provider is a party that conducts the foreclosure sale or Post-Foreclosure Sales Efforts, including
      marketing efforts in support of such sales under CWCOT procedures, and who is not one of the following:
      • an Affiliate or subsidiary of the Mortgagee; • any entity over which the Mortgagee has significant
      influence; or • any entity with which the Mortgagee has a conflict of interest in fact or appearance.
      (2) Standard Where permitted by the jurisdiction, the Mortgagee may utilize an independent third-party
      provider to market the Property prior to any foreclosure or Post- Foreclosure Sales Efforts or to
      conduct such sales to ensure maximum competition for both the foreclosure sale and post- foreclosure
      sales. The Mortgagee may only use an independent third-party provider that agrees, in writing, to
      share sales and auction reporting information with the Mortgagee and HUD.'
- id: hud-ml-2026-03-hb-independent-provider-reimbursement
  canonical_id: hud-ml-2026-03-hb-independent-provider-reimbursement
  section: HUD ML 2026-03 — (E)(2) Independent Third-Party Provider reimbursement limits
  type: do
  tags:
  - round-b
  - regulator-direct
  - hud-ml
  - fha
  - full-text
  - servicing
  - foreclosure
  - cwcot
  - claims
  - ml-2026-03
  - third-party-provider
  - claims
  primary_source:
    tier: 1
    authority: HUD Mortgagee Letter 2026-03 — Updates to Bidding at Foreclosure and Post-Foreclosure Sales
      Efforts — Independent Third-Party Provider reimbursement (III.A.2.p.iii(E)(2))
    source_class: hud-ml-pdf
    source_url: https://www.hud.gov/sites/default/files/hudclips/documents/2026-03hsgml.pdf
    snapshot_id: 388709fbee965e0a
    fetched_at: '2026-07-13T02:16:19Z'
    content_hash: sha256:735c0c3bc9c2d315ff23be492d2820af7e0d596bd413c2fd96286822cd1ad447
    paragraph_quote: 'HUD will reimburse such independent third-party provider expenses incurred for successful
      third-party sales up to an amount that does not exceed: • 3 percent of the Property’s sales price
      where the independent third-party provider markets the Property but does not conduct the sale; or
      • 5 percent of the Property’s sales price where the independent third-party provider markets the
      Property and conducts the sale. Closing costs of the sale are to be paid by the third-party purchaser
      or the Mortgagee. Revenue sharing agreements of the reimbursed fee between the Mortgagee and the
      independent third-party provider are prohibited.'
- id: hud-ml-2026-03-reporting-outcomes
  canonical_id: hud-ml-2026-03-reporting-outcomes
  section: HUD ML 2026-03 — Reporting Delinquencies to HUD — Reporting Foreclosure/CWCOT Outcomes (III.A.4.a.ii(G)(6))
  type: do
  tags:
  - round-b
  - regulator-direct
  - hud-ml
  - fha
  - full-text
  - servicing
  - foreclosure
  - cwcot
  - claims
  - ml-2026-03
  - reporting
  - sfdms
  primary_source:
    tier: 1
    authority: HUD Mortgagee Letter 2026-03 — Updates to Bidding at Foreclosure and Post-Foreclosure Sales
      Efforts — Reporting Foreclosure/CWCOT Outcomes (III.A.4.a.ii(G)(6))
    source_class: hud-ml-pdf
    source_url: https://www.hud.gov/sites/default/files/hudclips/documents/2026-03hsgml.pdf
    snapshot_id: 388709fbee965e0a
    fetched_at: '2026-07-13T02:16:19Z'
    content_hash: sha256:735c0c3bc9c2d315ff23be492d2820af7e0d596bd413c2fd96286822cd1ad447
    paragraph_quote: 'Reporting Delinquencies to HUD (III.A.4.a.ii(G)) (6) Reporting Foreclosure/CWCOT
      Outcomes The Mortgagee must report the DDS Codes that apply to the foreclosure sale, CWCOT, or CWCOT
      post-foreclosure sale outcomes at the end of each reporting cycle. For Properties marketed post-foreclosure
      sale, the applicable DDS Code indicating the marketing period must be reported. For all Properties
      sold, the Mortgagee must report the buyer type. Mortgagees must report the DDS Codes as follows:
      • Status Code 1J – Post-Foreclosure Sales Period • Status Code 2U – Owner-Occupant Buyer Successful
      Bidder • Status Code 2N – Nonprofit Successful Bidder • Status Code 2G – Governmental Entity Successful
      Bidder • Status Code 2I – Investor/Other Successful Bidder • Status Code 2R – Borrower Successful
      Bidder • Status Code 2S – Servicer Successful Bidder'
- id: hud-ml-2026-03-reporting-termination-codes-a
  canonical_id: hud-ml-2026-03-reporting-termination-codes-a
  section: HUD ML 2026-03 — Reporting termination DDS Codes (46, 48, 29)
  type: do
  tags:
  - round-b
  - regulator-direct
  - hud-ml
  - fha
  - full-text
  - servicing
  - foreclosure
  - cwcot
  - claims
  - ml-2026-03
  - reporting
  - sfdms
  primary_source:
    tier: 1
    authority: HUD Mortgagee Letter 2026-03 — Updates to Bidding at Foreclosure and Post-Foreclosure Sales
      Efforts — Termination DDS Codes 46/48/29 (III.A.4.a.ii(G)(6))
    source_class: hud-ml-pdf
    source_url: https://www.hud.gov/sites/default/files/hudclips/documents/2026-03hsgml.pdf
    snapshot_id: 388709fbee965e0a
    fetched_at: '2026-07-13T02:16:19Z'
    content_hash: sha256:735c0c3bc9c2d315ff23be492d2820af7e0d596bd413c2fd96286822cd1ad447
    paragraph_quote: 'Mortgagees must report one of the existing termination DDS Codes at the conclusion
      of the Default episode: • Status Code 46 – Property Conveyed to Insurer; expected to follow 2S,
      1J, or 1E when a conveyance claim will be filed with HUD. • Status Code 48 – Claim without Conveyance
      of Title; expected to follow 2U, 2N, 2G, 2I, 2R, or 2S when a CWCOT claim will be filed with HUD.
      • Status Code 29 – Charge-off; expected after a 2S when a Mortgagee cannot pursue HUD disposition
      options and will not file any termination claim with HUD, or has elected not to convey a Property
      to HUD after foreclosure.'
- id: hud-ml-2026-03-reporting-termination-codes-b
  canonical_id: hud-ml-2026-03-reporting-termination-codes-b
  section: HUD ML 2026-03 — Reporting termination DDS Codes (30, 73)
  type: do
  tags:
  - round-b
  - regulator-direct
  - hud-ml
  - fha
  - full-text
  - servicing
  - foreclosure
  - cwcot
  - claims
  - ml-2026-03
  - reporting
  - sfdms
  primary_source:
    tier: 1
    authority: HUD Mortgagee Letter 2026-03 — Updates to Bidding at Foreclosure and Post-Foreclosure Sales
      Efforts — Termination DDS Codes 30/73 (III.A.4.a.ii(G)(6))
    source_class: hud-ml-pdf
    source_url: https://www.hud.gov/sites/default/files/hudclips/documents/2026-03hsgml.pdf
    snapshot_id: 388709fbee965e0a
    fetched_at: '2026-07-13T02:16:19Z'
    content_hash: sha256:735c0c3bc9c2d315ff23be492d2820af7e0d596bd413c2fd96286822cd1ad447
    paragraph_quote: • Status Code 30 – Third-Party Sale; expected to follow 2U, 2N, 2G, or 2I when no
      claim will be filed with HUD. • Status Code 73 – Property Redeemed; expected to follow 2S when a
      Borrower redeems the Property, and no claim will be filed with HUD.
- id: hud-ml-2026-03-foreclosure-acquisition-costs
  canonical_id: hud-ml-2026-03-foreclosure-acquisition-costs
  section: HUD ML 2026-03 — Foreclosure and Acquisition Costs — Standard (IV.A.2.a.ii(L)(2))
  type: do
  tags:
  - round-b
  - regulator-direct
  - hud-ml
  - fha
  - full-text
  - servicing
  - foreclosure
  - cwcot
  - claims
  - ml-2026-03
  - claims
  - foreclosure-costs
  primary_source:
    tier: 1
    authority: HUD Mortgagee Letter 2026-03 — Updates to Bidding at Foreclosure and Post-Foreclosure Sales
      Efforts — Foreclosure and Acquisition Costs — Standard (IV.A.2.a.ii(L)(2))
    source_class: hud-ml-pdf
    source_url: https://www.hud.gov/sites/default/files/hudclips/documents/2026-03hsgml.pdf
    snapshot_id: 388709fbee965e0a
    fetched_at: '2026-07-13T02:16:19Z'
    content_hash: sha256:735c0c3bc9c2d315ff23be492d2820af7e0d596bd413c2fd96286822cd1ad447
    paragraph_quote: 'Foreclosure and Acquisition Costs (IV.A.2.a.ii(L)) (2) Standard The Mortgagee may
      request reimbursement for fees and costs that are: • necessarily incurred in foreclosure proceedings;
      and • reasonable and customary in the area. For all Mortgages endorsed prior to February 1, 1998,
      HUD will reimburse the Mortgagee’s foreclosure costs at two-thirds of the foreclosure costs. For
      all Mortgages endorsed on or after February 1, 1998, HUD will reimburse the Mortgagee’s foreclosure
      costs based on the Tier Ranking System (TRS) ranking (V.C.2.c) of the Mortgagee as of the date the
      Part B claim is received by HUD as follows: • for non-Tier 1 Mortgagees, 67 percent of foreclosure
      costs; • for Tier 1 Mortgagees, 75 percent of foreclosure costs; and • for all Mortgagees, the amount
      actually paid by the Mortgagee over a credit bid necessary to acquire the Property at CAFMV at the
      foreclosure sale. HUD will reimburse Mortgagees 100 percent of amounts actually paid by the Mortgagee
      over the credit bid necessary to acquire the Property at CAFMV at the foreclosure sale. Mortgagees
      must list the amount in Item 305 of Part D and provide documentation in P260. HUD will not reimburse
      the Mortgagee for the following fees and costs: • fees and costs in excess of reasonable and customary
      fees and costs, which lack documentation supporting the amount claimed; • fees and costs unnecessary
      for the protection, acquisition, or conveyance of the Property, such as courier services, document
      retrieval, express mail, or property inspection by attorneys; • Mortgagee’s overhead items such
      as postage, telephone, duplication, or collection services; • compensation paid to an attorney or
      trustee who is a salaried employee of the Mortgagee; or • extra costs incurred in foreclosures that
      result from defects in the mortgage transaction or foreclosure or defects in the title existing
      at or before the time the Mortgage was filed for record.'
- id: hud-ml-2026-03-cwcot-computation-costs
  canonical_id: hud-ml-2026-03-cwcot-computation-costs
  section: HUD ML 2026-03 — Claim Type 06 CWCOT Computation — Foreclosure and Acquisition Costs (IV.A.2.d.ii(F))
  type: do
  tags:
  - round-b
  - regulator-direct
  - hud-ml
  - fha
  - full-text
  - servicing
  - foreclosure
  - cwcot
  - claims
  - ml-2026-03
  - claims
  - foreclosure-costs
  primary_source:
    tier: 1
    authority: HUD Mortgagee Letter 2026-03 — Updates to Bidding at Foreclosure and Post-Foreclosure Sales
      Efforts — Claim Type 06 CWCOT — Foreclosure and Acquisition Costs (IV.A.2.d.ii(F))
    source_class: hud-ml-pdf
    source_url: https://www.hud.gov/sites/default/files/hudclips/documents/2026-03hsgml.pdf
    snapshot_id: 388709fbee965e0a
    fetched_at: '2026-07-13T02:16:19Z'
    content_hash: sha256:735c0c3bc9c2d315ff23be492d2820af7e0d596bd413c2fd96286822cd1ad447
    paragraph_quote: Claim Type 06 - Claims Without Conveyance of Title – Computation of Claim Amount
      (IV.A.2.d.ii) (F) Foreclosure and Acquisition Costs HUD will reimburse Mortgagees for amounts actually
      paid by the Mortgagee over the credit bid necessary to acquire the Property at CAFMV at the foreclosure
      sale. Mortgagees must list the amount in Item 305 of Part D and provide documentation in P260.
- id: hud-ml-2026-03-cwcot-submission-claim-parts
  canonical_id: hud-ml-2026-03-cwcot-submission-claim-parts
  section: HUD ML 2026-03 — Claim Type 06 CWCOT — Submission of Claim Form Parts to HUD (IV.A.2.d.iii)
  type: do
  tags:
  - round-b
  - regulator-direct
  - hud-ml
  - fha
  - full-text
  - servicing
  - foreclosure
  - cwcot
  - claims
  - ml-2026-03
  - claims
  primary_source:
    tier: 1
    authority: HUD Mortgagee Letter 2026-03 — Updates to Bidding at Foreclosure and Post-Foreclosure Sales
      Efforts — Submission of Claim Form Parts to HUD for CWCOT (IV.A.2.d.iii)
    source_class: hud-ml-pdf
    source_url: https://www.hud.gov/sites/default/files/hudclips/documents/2026-03hsgml.pdf
    snapshot_id: 388709fbee965e0a
    fetched_at: '2026-07-13T02:16:19Z'
    content_hash: sha256:735c0c3bc9c2d315ff23be492d2820af7e0d596bd413c2fd96286822cd1ad447
    paragraph_quote: 'Claim Type 06 - Claims Without Conveyance of Title (IV.A.2.d) iii. Submission of
      Claim Form Parts to HUD for CWCOT The Mortgagee must submit Parts A and B simultaneously no later
      than 30 Days after: • the date the Mortgagee acquired good marketable title; • the date a third
      party acquired good marketable title; • the date the Borrower or other party redeemed the Property;
      • the date the redemption period expires; or • such other date as required by the FHA Commissioner.
      When filing via EDI, FHA Catalyst, or FHAC, the Mortgagee must submit Parts A and B no later than
      two Days after the date the form was prepared. When submitting via FHA Catalyst, the Mortgagee must
      also submit Parts C, D, and E. In all cases, the Mortgagee must also upload into P260: • all Parts
      of form HUD-27011; • the Closing Disclosure or similar legal document for post- foreclosure sales;
      • the appraisal; • appraisal invoices; • a worksheet reflecting the Mortgagee’s application of the
      CAFMV. The worksheet must include the CAFMV adjustment percentage provided in the instructions on
      FHAC, any amount paid by the Mortgagee over the credit bid necessary to acquire the Property at
      CAFMV at the foreclosure sale, and where applicable, the state- mandated foreclosure price; and
      • a third-party service fee invoice for auction services, if applicable.'
