The Real Estate Encyclopedia
Partial Claim
Category - Real Estate Glossary - Real Estate Terminology
1.   A loss mitigation technique used with HUD insured loans wherein HUD pays a claim to the loan servicer which brings the account current.

2.   This applies to FHA mortgages only - a lender may be able to work with a homeowner to obtain a one-time payment from the FHA-Insurance fund to bring a delinquent mortgage current.

A homeowner may qualify for a Partial Claim if:

  • The loan is at least 4 months delinquent but no more than 12 months delinquent;
  • The property owner is able to begin making full mortgage payments.


  • When a lender files a Partial Claim, the U.S. Department of Housing and Urban Development will pay the lender the amount necessary to bring the mortgage current. The homeowner must execute a Promissory Note, and a Lien will be placed on the property until the Promissory Note is paid in full.

    The Promissory Note is interest-free and is due when the first mortgage is paid in full or when the property is sold.


References
 
Category(s)
Real Estate Glossary - Real Estate Terminology
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