A partial claim moves your missed mortgage payments into a separate zero-interest loan with no monthly payment. It is due only when the house sells or transfers, the loan is refinanced or paid off, or the mortgage term ends. Your monthly payment, rate and term stay the same, and the loan is current again.
Most homeowners only hear about two choices: reinstatement, where you pay all the missed payments in cash, or a short sale, where the lender takes a loss. A partial claim is a third option. The missed amount is set aside in a second, subordinate lien that charges no interest and has no monthly payment. It is not a loan modification, so the first mortgage keeps the same rate, term and payment you have today.
A Harris County homeowner with an FHA loan had fallen about a year behind. The servicer reviewed the file, HUD issued a partial claim for the full arrears, and the homeowner signed a zero-interest note and a subordinate deed of trust. The servicer posted the back payments at once, the loan showed current, and the monthly payment did not change at all. The note says it is due when the property is sold or transferred, when the loan is paid off, or at maturity.
Yes, but the partial claim is due when the house sells or transfers, so any sale has to account for it. That is something to plan with your title company up front, not discover at closing. A partial claim also takes a servicer review, so it is rarely fast enough when a foreclosure sale is only days away. If you are behind and thinking about selling, call early so both paths stay open. Start at our sell page.
Tell our team about the house and the loan. No commissions, no repairs, and a closing in as little as 14 days.
No. The partial claim balance is interest free and has no monthly payment.
Your mortgage servicer, the company you send your payment to. Ask for a loss mitigation review and name the partial claim.
No. A modification changes the loan terms. A partial claim leaves the first mortgage exactly as it is.