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ARTICLE · 11 FEBRUARY 2026

HUD Revised Foreclosure Bidding Process For FHA Loans

Ballard Spahr LLP
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The U.S. Department of Housing and Urban Development (HUD) recently revised the requirements for bidding at a foreclosure sale and for utilizing Claims Without Conveyance of Title (CWCOT)...

United StatesFinance and Banking
Richard J. Andreano, Jr.
Richard J. Andreano, Jr.
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The U.S. Department of Housing and Urban Development (HUD) recently revised the requirements for bidding at a foreclosure sale and for utilizing Claims Without Conveyance of Title (CWCOT), including Post-Foreclosure Sales Efforts through the issuance of Mortgagee Letter 2026-03. The changes apply to all single-family forward mortgages under the Title II program, except for Hawaiian Home Lands Mortgages and Insured Mortgages on Indian Land. The changes may be implemented immediately, but must be implemented for foreclosure sales scheduled on or after April 29, 2026.

HUD advises that through the Mortgagee Letter it is:

  • Restating its policy that a mortgagee may only participate in the CWCOT program if the mortgagee bids the Commissioner's Adjusted Fair Market Value (CAFMV) at the foreclosure sale. The CAFMV is the estimate of the fair market value of the property, less adjustments that may include, without limitation, HUD's estimate of holding costs and resale

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