What is a Partial Claim?

When a borrower who purchased their home with a Federal Housing Authority Loan (FHA) falls delinquent on their they may apply and be considered for review of a loan modification. Typically if approved for a loan modification and when the borrower has a FHA loan, they receive a partial claim for the arrearage on the account. This is an interest free loan guaranteed by the Housing and Urban Development (HUD) made to a homeowner in an amount needed to reinstate their mortgage. This will show up on title as a silent 2nd mortgage.

How to settle a partial claim while being reviewed for the Pre Foreclosure Sale Porgram (FHA short sale)

Due to FHA’s strict guidelines a partial claim should raise a healthy concern as it will affect the NET to the 1st mortgage greatly as it will be required per HUD guidelines to be paid off in full. This is important to consider as you may need a higher purchase price to NET the 1st mortgage what they require per the ATP due to the partial claim. In order to get a payoff for this lien you will need to contact Deval LLC. Once you have the payoff you need to have the negotiator assigned to the file with the 1st lien holder to submit a request to HUD for the partial claim to be paid off in full.  Please be advised that variances placed with HUD are not guaranteed to be approved, but one of this nature typically is.

For any questions in regards to how to settle this type of lien or if you are having trouble with a FHA Short Sale please fill out the form below and someone will reach out to you.