Prepare To Convey

Prepare To Convey

A “Prepare To Convey” work order gives you the opportunity to prove yourself a professional or prove yourself to be a pretender. If you somehow wind up on the “pretender” side, it will probably cost you some bucks and possibly cause the loss of any additional work orders. Here’s why:

Conveyance of a property is a big deal – a really big deal. “Conveyance “ or “to convey” when used in the property preservation industry means that the property is going to be handed over to HUD. If you think about it, the property has gone through quite an ordeal:

First the property was foreclosed and the homeowner left on their own or was evicted. This is a critical time also because a foreclosed property has not yet been legally transferred to someone other than the homeowner. In fact, both the homeowner and the lender still have rights to the property until the state’s required legal process has run its course. But, let’s move on. We’re talking about conveyance here.

Second, the lender eventually gets to take responsibility for the property. We’re moving along here but we’re not yet where the lender wants to be. The lender wants their money from the mortgage and they want to get rid of the property. In order for both of these things to happen they have to request that HUD accept the property in exchange for payment of the FHA insurance agreement.

The FHA insurance agreement will pay the lender their money and take the property. But there’s a catch, not really a catch but some requirements the lender must see to before HUD will take the property back and pay the lender for the mortgage. Those requirements are spelled out in the HUD regulations, the latest being Mortgagee Letter 2010-18 issued May 13, 2010. Here’s the part the lender is worried about: