The HUD's Mortgage Letter (ML) 2025-13, released recently, rescinds prior policies regarding post-foreclosure sales under CWCOT due to poor sales performance. Data indicated minimal sales to owner-occupants and almost no sales to HUD-approved nonprofits, resulting in property deterioration and associated losses. The updated CWCOT provisions eliminate extended listing periods and modify default reporting requirements. These changes aim to improve the efficiency of selling single-family properties and will be effective immediately, with necessary updates to the Single Family Housing 4000.1 Handbook expected soon.
HUD's ML 2025-13 rescinds previous policies affecting post-foreclosure sales, citing ineffective results and leading to an effort to reduce property deterioration and losses.
Despite extended exclusive listing periods, sales of REO properties to owner-occupants or HUD-approved nonprofits were not effective, reflecting a need for policy reassessment.
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