HUD Claims Without Conveyance Of Title (cwcot)

[BarrySW1963]

Can someone ELI5 (explain like I'm 5) what this is? Yes, I've read the docs and still don't get it.

Subject was sold as an REO two months ago. Bought by investor for a steep discount in a hot market. Minor work done to fix it up, now back on the market for much much more (70% increase), and under contract. Assignment is for a 2055, not the purchase appraisal. Am going to turn it down, but still am hoping someone can succinctly explain what it is. (in the implications for the parties involved, including the original owner).

 

[glenn walker]

I know 2055s are done on some Pre-Foreclosed homes but I have never heard of one being completed after the home was sold. What's kind of weird is the investor has since updated the home and it's being sold again. Is it possible the previous owner or lender believe they were ripped off by a previous low appraisal and want to see what it was really worth before ? I would think the liability for you is high because you really have no idea what the condition of the property was at the time of sale to the investor. Personally I would consider walking from the assignment not enough money and way too much liability.

 

[BarrySW1963]

Thank you. It looks all sorts of fishy, so turned it down.

 

[Mr Rex]

Basically the CWCOT is intended to lessen the overall loss in a foreclosure by FHA/HUD by allowing the lender to buy the property at the courthouse foreclosure sale at an amount established by HUD via the CAVMA appraisal process. The basic down and dirty is to keep it off FHA's back to carry, sell etc in recognition that sometimes its better to accept the loss than add it to FHA's REO inventory and lose more via extended carrying costs and inevitable REO stigma values etc.

 

[glenn walker]

Mr Res unless I missed something this property was already sold to an investor and he fixed it up and is reselling and is in escrow (under-contract) for 70% more. I also did not see anything about this being a FHA or A HUD REO but frankly that's not an issue . The issue was the property was already purchased from the lender-bank etc by a flipper and is now being resold by the new owner ( investor ) Flip property ?

 

[BarrySW1963]

It was an FHA REO. It sold in 2014 for about $200k-ish, then as an REO for $165k-ish 2 months ago, and went under contract after being re-listed (after some updates) for $240k-ish. The huge discount in the middle, in a hot market just looks fishy. The purchasers in 2014 would have had to *severely* trash the place for it to drop so much, but the REO listing photos don't look that bad.

 

[glenn walker]

Thank you for updating us ... Yes I would be a little concerned about this transaction because it may end up in court and the lender , previous owner or AMC is not telling you the whole story . My experience has been if it doesn't feel right move on to another assignment . In 30 years this policy has worked fairly well. *** Unless the scope of work clearly explains what and why this report is being done , especially as a 2005 it just does not appear to be a win for the appraiser.

 

[Tom D]

i think that glen cat is killing the order. seems odd enough. how would you know the current condition, is it listed and they have photos. was the 2014 $200k reasonable. is the 2055 for today, or a retrospective date. me thinks, i don't know what i think. is it being a 2055 to keep it a secret from the owner? makes for a good appraisal from hell either for you, or the owner.

 

[glenn walker]

Tom D you could and may be correct I just don't see the value in a 2055 at this point . If the lender or AMC takes it up a notch to a full inspection then by all means it may be reasonable assignment for the appraiser .

 

[Evincere]

http://portal.HUD.gov/hudportal/documents/huddoc?id=14-24ml.pdf

http://appraisersforum.com/forums/threads/cwcot-interior-appraisal.196660/page-2