I came across a SFH foreclosure in my neighborhood, house appears to be in alright shape and the owner let it go.
It sold to the bank at the county auction, now it is listed on Xome as a second chance foreclosure. From my understanding, the bank holds deed to these CWCOT properties? So I don't have to worry much about prior liens etc etc? I searched the counties recorder site and the history looks good, only this 1 mortgage that went through foreclosure. Can't find any open building violations either.
Judgement against the place was 270k, without looking at the inside my guess is it would have been worth ~300k on the open market. Opening bid is 200k now. Looking at other Xome CWCOT properties, the opening bid is 60% of reserve, meaning the reserve will eventually show at 330k??? How does that make sense?
Do these second chance foreclosures just fester on the auction sites with ridiculous reserves? Does this eventually turn into the bank evicting the occupants and sell the house with the interior photos for the reserve price?
Second chance foreclosure/CWCOT auction – need to worry about title?
byu/accountingbossman inrealestateinvesting
Posted by accountingbossman
1 Comment
Basically, CWCOT stands for Claims Without Conveyance of Title. It’s an FHA program where the bank/servicer tries to sell the property before actually transferring it to HUD. The bank holds the deed in trust and has the right to sell.
These usually come with clean title because foreclosure wipes out junior liens, and HUD won’t take them back unless the title’s insurable.
So ya it’s kinda complicated but basically the property essentially didn’t sell at opening bid and now it’s on those second bid websites such as xome or auction.com.
I’m more on the conservative side so me personally I would wait until the property hits the MLS so I could do a standard contract and get title insurance.