February 21, 2019

what is a partial claim?

What is a HUD Partial Claim and how will it affect my home sale?

If you have an FHA backed mortgage and you’ve ever had any type of loan workout – including a loan modification or forbearance, odds are you have a partial claim against the home.

What is a HUD partial claim?

A partial claim is an interest-free loan from HUD to get caught up on overdue payments on an FHA loan, and is usually completed along with a loan modification or forbearance. The partial claim does not need to be paid off until the property is sold or the first mortgage is paid off.

should i modify my loan

How do I eliminate the partial claim?

The claim needs to be paid in full at refinance or resale. 

Can the partial claim be forgiven or settled?

HUD does not forgive or settle partial claims and they must be paid in full.

What happens if I sell my home and I can’t sell for enough to satisfy the mortgage and the partial claim?

If the proceeds of the home sale are insufficient to pay off both loans, you will need to pay the remainder out of pocket or pursue a short sale

fha short sale

FHA has their own short sale process (FHA PFS Program),  and if you qualify you can sell the property for less than you owe and have the remainder of the debt forgiven.  

The problem with HUD partial claims is that they almost always end up being far larger than expected by the homeowner, and usually this additional debt lands the homeowner in a position where they owe more than their home is worth.

*Effective October 8, 2021, ISN is servicing all HUD partial claims:

ISN Corporation – Western Operations Center

Attention: Secretary Held Loan Servicing

2000 N Classen Blvd Suite #3200

Oklahoma City, Ok 73106

Phone:  1-800-225-5342

Fax:  1-405-724-7800

Contact by email:

Hours of Operation: Monday-Friday                           

7:00 A.M. – 7:00 P.M. Central Time

If requesting a payoff statement, include the FHA Case number, property address, names of the parties on mortgage and if you are not authorized on the account, send a third party authorization form.


We went through a short sale and Minna's team was amazing every step of the way. They made a very sad and stressful time seem easier by handling all the little details. They always stayed positive and put us in contact with an amazing legal team. We couldn't be more pleased.

partial claim infographic CT

Last Updated on March 18, 2024 by Minna Reid

About the author 

Minna Reid

Minna Reid is The Broker - Owner of Reid Real Estate Group. Reid Real Estate Group is a full-service Connecticut residential real estate brokerage, specializing in helping homeowners with legal and financial challenges including short sales, probate sales and tax lien complications.

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  1. Hello Mina,

    Question for you. I have a HUD partial claim on my current home. I am now able to buy a new home. I will be renting out my current home while maintaining ownership of it. So I will be owning two homes.

    Will the HUD partial claim show up negatively in the underwriting process and prevent me from getting final approval for my new mortgage loan? (which is conventional btw).

    Your assistance will be greatly appreciated.

    Thank you.

    1. Although I am not a lender, since no payments are made on a partial claim and since it just increases the mortgage balance, I would suspect that it would not affect your ability to qualify for a new home.

      1. can a partial claims mortgage be paid off anytime?
        I have a client that has a HUD partial claims mortgage obtained
        November 2020. I believe they obtained it based on Covid.
        They are in a position to pay it off.

    2. I just closed on the sale of my home and had a partial claim on my home but don’t see in the documents where it was paid off. I received a profit from the sale of my home at closing. I would think that the partial claim would have to be included in the final payoff amount from the title company in order to close. Is this correct?

      1. It should have been paid off but I’ve gotten many calls where it was not done properly, which will most definitely lead to problems for both buyer and seller. You would definitely want to discuss this with the attorney who closed your sale.

        1. Hello, I am currently in the same situation… I did a loan modification and received HUD partial claim an amount they paid was $36,000 I sold my home and honestly forgot I had it. I received a few notices from HUD but once I contacted them I found out the buyer paid it off am I still legally responsible now to pay the buyer the funds back?

          1. I’m surprised the buyer paid it off. Perhaps it was a title insurance claim? I would assume someone could pursue you for these funds if they wished to.

  2. Hello,

    My question is will the payoff amount include the partial claim or is their a separate process to obtain that payoff?

    Thanking you in advance.

  3. I have partial claim on my home loan. In November 2019, I did a cash out refinance to pay for remodeling so I could prepare to sell. The underwriter or whomever did not include the partial claim in my refinance amount (which I didn’t find this out until late February 2020). In February I received a demand letter from HUD wanting to collect on the partial claim. In there eyes it appeared I payed off the loan but did not pay HUD. I tried to contact my lender but was unable to actually speak with anyone until the end of March 2020 because of covid-19 all of their offices were closed with no way to reach anyone (also notified my HUD case worker of the issue). Late March after I was able to speak with my lender’s customer service I was advised to write a statement of what happened and send to their research department. I was told there would be a 30 day turnaround for a response (also notified my HUD case worker of this). May 5, 2020 I received a call from my lender’s VP of operations acknowledging their error and was told they were working to fix it. Later I was told by the VP that after trying necessary measures because of Texas state law they cannot refinance the loan before the 12 month period is up to add the partial claim balance, but they were still working to try to correct this error. May 18, 2020, the claim balance was placed on my credit report a long with an added fee. In June, my lender asked me to forward all documents I had received from HUD and the Dept of Treasury as their legal department was now involved working to correct the error. I had not heard anything else until I started calling my lender to check the progress of what was going on because I had now placed my house up for sale and am supposed to close withing the next 30 days. However because of this outstanding partial claim (that I have started to pay on until the lender resolves it) is preventing me from getting an approval even from my current lender so that I may look for a home to purchase. I’m afraid I may wind up being homeless as this matter has not been resolved. Anytime I speak with my lender I am only told that their legal department is “working on it.” What else can I do?

    1. I don’t see how you were able to refinance without paying off the partial claim – sounds like shoddy title work from the refinancing lender. I assume you got a new title insurance policy when you refinanced? If so, try reaching out to them. If they insured title without an exception for the partial claim, I would assume they are responsible for paying the claim. Worth a shot anyway.

  4. I have an FHA loan and a subordinate partial claim. Can I submit a Compromise Offer to HUD requesting the entire claim On the partial be settled and cancelled? HUD- 56141
    I am still making payments on the 1st so the partial isn’t due yet, but I would like to refinance into a conventional, however the lender is treating the partial like a cash out which is costing me close to a grand.

    1. No – partial claims can never be settled or cancelled. They must be paid in full. The first mortgage will take the hit in a short sale, but the partial claim will always be fully paid. Obviously this will not work with a refi situation. You will have to pay of both loans in full.

  5. Hello,

    I have a partial claim on my current home. I put the house on the market and am going to settlement next week for the home with the partial claim and later in the afternoon on a new property I purchased. I already sent the info to the settlement company closing on the home with the partial claim. my question is will the partial claim delay closing on my new home later that afternoon?

  6. Will the Partial claim be paid off in the closing process, or do I need to come up with the money before closing?

    I have one, but it is very small compared to the equity I have in my home. I am scared that I will not be able to refinance. Im just not sure if I have to pay the HUD up front, or if it gets paid from the proceeds of my equity in the house?

    1. Novad currently does all the servicing for HUD partial claims. You can reach them at NOVAD Management Consulting

      Novad Consulting
      2401 N.W. 23rd St. STE 1A1
      Oklahoma City, Oklahoma 73107
      PH. 877-622-8525
      FAX: 800-963-4917

      1. Hi
        Do you have any advice when Novad hasn’t sent payoff request and several request have been made for 3 weeks. I have missed 3 closing dates due to no response back drom Novad. What is the next step when they’re saying due to covid the process are taking longer than 6 days. I néed help.

          1. Im having same issue. Im closing next Week. I really cant Delay this Closing. Who can I call. I requested like 4 times so has my title company. Im at a lost

          2. Christopher. Did you finally get your payoff? It makes me nervous we are suppose to close in 5 days and still haven’t got mine.

          3. Hi, Tina–Did you get your payoff? (I’m wondering if Christopher did, too!) Novad has transferred servicing to ISN and it has been a nightmare transition–we can’t get a response from anyone. Closing is next Monday!

            Also, if any of the info we submit for the payoff quote is incorrect, they won’t respond. I mean…what? How are we supposed to know what we need to correct or resubmit, etc?

          4. Pryn – They wont tell you, you simply wont get a response. Send an email to the payoff email address and make sure to include the FHA Case number, property address, names of the parties on partial claim and if you are not authorized on the account, send a third party authorization form.

          5. We are also having great difficulty getting our payoff. We emailed the request following the specific instructions provided via email by HUD. We have missed two closing dates thus far. Is there any other way to contact them or speak to someone regarding this issue? It was requested last Wednesday, 11/10/21.

          6. We did exactly that. They said to wait until Monday and escalate which will take another 5 days. He’s even had them review the email to verify all info is correct. We will both lose the sales of the houses if we don’t receive it by Monday. Do you know if there is anyone at ISN to contact?

          7. I am sorry to hear that. The only contact info I have is posted above. I have not yet had any issue to have to reach out further. KNOCK ON WOOD! LOL. If you do end up with contact info for higher ups, please post for the thread. A lot of people are having problems with ISN since the transfer.

          8. Will do! As of right now we are looking to pay for weekend work for emergency title work through a new company that will set up an escrow account for the amount to proceed with the closing. This has been an absolute nightmare. Good luck to all those having trouble.

          9. Can you explain this more? Did you find a way around it or to speed it up? Please reply I’m about to lose my new build due to not being able to close my current one because I don’t have the payoff

          10. Hi Sarah I was wondering if you ever got the payoff? I’ve been waiting on mine too. We close on our house on Wednesday. Thank you!

          11. We are having the same delays with ISN. We were supposed to close on December 10 and all of our emails requests have been left unresponded to.

            However, I realized this evening that we weren’t sending the request for the pay off statement as a signed attachment along with the promissory note.

            I just sent a new request this evening in hopes it works!
            Rescheduled closing to Dec. 17. Fingers crossed!

          12. Hi Minna,

            I am doing a refinance for someone and looks like HUD now requires the signed NOTE be sent over with the payoff request. They did not tell my ops team this initially when initial payoff request was made on 11-17 so they would not process the request without the NOTE. Ops team person went on vacation and resent the request last week with the NOTE this time. Cannot reach anyone by phone for a status update. Was on hold over 2 hours and gave up. Hearing now it can take 2-4 weeks for a payoff?!?! Do you have a good phone number for them to actually reach someone? How did you get yours back so quick? Request was sent to the email address you show above. This is nuts! Thanks!

          13. Did you include the FHA case number? Follow the directions above to the letter? I’ve never had to provide a note, and if that has changed it must be in the last week. Most people wont have their note so this seems like an unrealistic request.

          14. Yes, my ops person followed the instructions to the letter. I even had her show me the request she resent when she had to send the Note. She had all of the information they needed including the case number. If you go on HUD’s website and look up payoff request instructions, the first thing they say is you need a copy of the Note. If anyone is sending in their request and not including the note, it will not be processed and the clock starts over. Here are the instructions in case anyone needs this.

            Direction For submitting a Payoff Request:
            All payoff requests must be submitted in writing and include a copy of the Partial Claim Promissory Note. Borrowers unable to locate their Partial Claim Promissory Note should contact their loan servicer.
            The payoff request must include the following:
            Ten-digit FHA Case number
            Full Property address
            Borrower’s name
            Anticipated payoff date
            Requestor’s contact information
            Instruction of where to send the payoff
            Borrower signed authorization form, Power of Attorney, or other documentation showing legal authorization, if applicable.
            Written authorization is required in order for (ISN) Information Systems & Networks Corporation to release case specific information to a 3rd party: The third-party authorization, Power of Attorney, or other documentation showing legal authorization must be signed and dated by the Borrower, with a statement identifying the party to whom they wish ISN to release information.
            To provide case specific information, if the Borrower is incapacitated or deceased, please complete the authorization provide and a copy of the documents granting you legal access to the Borrower(s) loan information (such as a Power of Attorney, if incapacitated, or Letters of Administration, if deceased, etc.).
            Incomplete requests are unable to be processed.

          15. Ok then – even as of last week I’ve never been required to provide this, so it would have to be brand new. This is an extremely burdensome requirement, that will cause a ton of delays and frustration. Do you think you could link to the source of this info? I would love to update my instructions above.

          16. Sure, I went to hud.gov/answers then in the search bar typed in partial claim payoff.

            In the FAQ search for this question: How do I submit a request for a payoff statement for a COVID-19 Standalone Partial Claim held by HUD?

            Hope that helps. My ops managers are telling me turn times are 2-4 weeks! That is crazy. Hold times are long too. Was on hold 2 hours yesterday and trying them again today. It’s been 6 business days since the second request was sent.

          17. Another thing I thought of is the request cannot be in the body of the email. Must send everything over as attachments. My ops person sent 3 attachments: the payoff request with all the detail of what they need, borrower signed authorization and note.

          18. I did go to https://www.hud.gov/answers and researched the question. The process above in the post is correct. It can go in the body of the email also – that has not changed. However there is one change – You will need to provide the partial claim note IF the claim has not made it to HUD yet, so it would have to be a pretty new partial claim – most likely covid related. NO NOTE IS REQUIRED OTHERWISE. Thank you though – I will add the info to the instructions above. I just spoke to someone at HUD and they confirmed this. So the safe bet here is if your partial claim is covid related or newer in some other fashion, include the promissory note. You may have a copy of this, or your lender may.

          19. May I ask how you got through? Did you call 800-225-2342? I was on a long hold again today then got a recorded message that the facility was closed due to technical difficulties. I chose the option for “if you are a lender” on the menu. Is there a better menu option to choose to get a live person quicker? I have had no luck getting through after 3 attempts to call them.

            Thank you!

          20. Yes – I waited on hold for quite some time. I went through the real estate agent line (just an option once you call), but I’m not sure it makes any difference. You just need a live body. Also I did not call ISN direct, but it may be helpful if you’ re having a very hard time – scroll to bottom for list of phone numbers for folks at ISN. https://www.isncorp.com/hud-national-loan-servicing/

      2. Hello,

        My partial claim was paid off in August 2021 when I refinanced my home.
        I have been trying for 2 months now to get a release of lien as the loan is showing that is was paid off but it’s still showing that there is a lien.

        Do you know who I can contact to get the release of lien. I have been reaching out to FHA Resource Center @ 1-800-225-5342 and sent emails to pcreleases@hud.gov.


        1. Hello, I'm in the same boat. Did you end up finding a solution? I have been trying to get a lien release since October 2022.

    2. What ended up happening, I just found this out as well, our pay off says 45K but the loan taken out was only 19k. I Know we do not owe 45k!!!!

  7. Hi ,in 2018 ,I a chap 7.
    We did not reaffirm the mortgage.
    The mortgage was a loan mod with a partial claim
    Is the partial claim still valid ?

  8. Is the actual payoff amount due on a partial claim, going to be different than what’s on the note I signed, if I request the payoff before the maturity date of the loan?

  9. Hi, we are selling our house and looking for a new one. Our lender for our new Mortgage is asking for our partial claim promissory note. I don’t have this. I’ve tried contacting Novad- they say our Lender will have it. I contact our lender- they say our previous lender who helped set us up with the partial claim should have it.I contact this lender and they say it would have been transferred with our first Mortgage on to our new lender. I am getting nowhere! Who can I get this copy from?? Thank you!!

  10. Hello,

    I am selling my house, but just found there is a HUD lien. The pay off says $49K but the loan was only about $15k. I know we do not owe $49K!! What can we do? Our lender was Bank of America and they sold it to Carrington Mortgage. Please help. Thanks!!

    1. Partial claims are generally always larger than owners anticipate. You may reach out to Novad for a breakdown of the fees involved, however keep in mind that if you did a loan modification, it is highly likely that a portion of the principal balance was rolled in to make it possible for you to get a lower payment.

  11. I have a lien from HUD for $8,100 from 2019
    I have a forbearance I am on now for the last 9 months due to Covid. I am selling my home and the Title company says you owe HUD $8,100 I know that!
    But what about the 9 months I been in forbearance for this Covid? This assistance I am getting for the last 9 months
    I did not sign anything yet. They said that I would after I get off this assistance. Doesn’t look like the current forbearance for Covid is not showing up from HUD. They said just $8100
    Could the current forbearance be covered or dismissed because of the Covid?

    1. There has been no loan forgiveness due to Covid. Your forbearance is separate from your partial claim, but would be added to a payoff statement from your current lender. Have you requested a payoff statement?

  12. I have a partial lien from a modification I did back In 2017. My loan was sold from Bank of America to another lender, should that have been paid in the transfer? I recently got a new modification last year during Covid, I have a contract on my house, now their saying I owe both liens.

    1. Novad handles servicing for all HUD partial claims. A partial claim is separate from your loan that was transferred and would not have gone with it. If you got another modification that resulted in an additional lien, yes you will have to pay both, in addition to paying off your original mortgage. If the proceeds from the sale are insufficient to pay off all the liens you will need to bring cash to pay the difference or consider a short sale.

  13. We got accepted for the partial claim which totals $20,000 due to COVID. Does HUD have to been paid off if we want to try to get a home equity line of credit?

    1. The depends on your equity situation and the lender giving you the HELOC. If the equity is there after your mortgage and partial claim I would assume they would still write the HELOC.

  14. Hi Minna
    Thanks for sharing the knowledge. I did a modification with a partial claim that was finalized end of 2017. The partial claim was right around 30% of the loan balance, so pretty substantial. At the end of 2018 I lost work and went into a forbearances for 6 months, followed ultimately by another modification and partial claim that was finalized. During the second modification, the trail agreement terms had a “before and after” of monthly payment, interest rate and partial claim amount (nothing other than those 3 figures). The partial claim amount was significantly lower, so I assumed once approved (after the trail) , the new primary mortgage balance would increase by the reduction of the first partial claim. That was not the case. My principal balance on my primary went up slightly, while the partial claim balance significant drop remained. I assume there’s now 2 partial claims? My lender doesn’t show the partial claim details and I don’t know of anyway to check with HUD directly. So in short, is it common to have 2 partial claims (and the structure / wording of the trail agreements “before and after” was just inaccurate ?

    1. Without reviewing the title to the home it’s nearly impossible to know what liens you have. If you suspect you have two partial claims, you can review your title (at your county or town hall). Also, Novad does all the servicing for partial claims so if you get the FHA case number from your lender and call Novad you can get a detail on your partial claim(s).

  15. I bought a home from the Clerk of Courts 2018
    I paid off the Sallie Mae mortgage in 2019
    I recently sold my house & set to close in 3 days& was shocked when they told me I have a partial lien for $93,000 from the previous owners.
    Anything at all I can do about this?
    Am I fully responsible for this lien?

  16. Is the promissory note I signed with my lender for a partial claim forbearance the same as a payoff statement?

  17. I sold my home in 2019. I did a modification back in 2015 that I totally forgot about. My mistake. The title company did not pay this nor did they find it in the search so they say. Well I had more than enough to cover the balance but I payed off all of my other bills I had not realizing this was out here at the time. I didn’t get a notification from HUD until Feb 2020 that I owe $48K for $6800 they paid during the modification. Well now I do not have the funds. Can Ch.13 help with paying this back and prevent another 2% interest and penalties each year?

    1. So the house was sold to someone else and no one caught the partial claim? The lien is still on the property and that’s the new owners problem now, but it sounds like they are trying to collect from you on the promissory note? Am I understanding this correctly? If it was CH 7 I would assume its just another unsecured debt, but ch 13 can get more complicated. You need to speak to your bankruptcy lawyer to see your options for incorporating this debt into your BK.

  18. Hi
    We did a mortgage mod in 2010, and sold in 2016, the partial claim never came up in title search or even as a lien on the property. We were able to close, and shortly after were notified of this partial claim debt.
    Our understanding of the modification process, was a principle reduction that would be zeroed after 3 years in good standing.
    To date our federal income tax returns have been garnished since 2017,
    We now have a more thourough understanding of the partial claim, and are trying to figure how to resolve, as we are unable to pay the full amount which has also now accrued penalties and interest.
    Can you advise us, and are there partial lump sum payments accepted as resolution.
    If not what are our other options. Please help this is a very stressful situation.

    1. I have never heard of HUD ever accepting a settlement on a partial claim. I’m surprised you sold the property and the partial claim never showed up as there should have been a lien for it. Either way – you signed a promissory note and they can collect on that unless you file a bk. I’m sorry FHA is just not very flexible.

  19. We have a second lien on our home through HUD. We (the persons financially responsible) and our title company have reached out multiple times in the past few weeks to attempt getting payoff information about our loan but we cannot get the payoff information from Novad. Any tips on how to get them to respond to our requests for payoff information?

      1. Novad won’t answer calls or emails
        What can I do?? My closing day has been moved 2 times, also is the amount on the tittle correct?
        Thank you,

  20. hi im in the process of selling my home and i found out i have apartial claim which says i owe108 thousand dollrs i did a loan mod from bank of america u think the amount owed is lesser

    1. Probably not. The partial claim payoffs are always higher than expected. It sounds like they moved some of your principal to the back of the loan to make your mod possible.

  21. Good Morning, I am selling my home and my title company was requesting the NOVAD payoff. NOVAD sent me a partial claim payoff. Is that correct? I was expecting them to send the entire payoff on what I owe on the home.

  22. My novad payoff amount is 96000 Hud partial claim amount is 65000. Novad referred me back to the lender (wells fargo) who said the additional charges was for foreclosure charges yet I have no documents substantiating this. What should I do

  23. Minna,

    We were $7k behind on our mortgage in 2015. We received a modification and we went to close on the sell of our house today only to find out at title We have a partial of $38k with NOVAD. This modification seems padded and illegal. Can NOVAD get away with this & as there seems to be many others who have experienced this. Is it possible to file a class action lawsuit? & can this $38k be settled for a lower amount?? Please help!!

    1. In order to make modifications possible, often a portion of interest/principal is removed from the original loan and placed into the partial claim that sits interest and payment free on the back of the loan. This is how they are able to offer a lower payment, and adjust for missed payments. As a result, the partial claims are often higher than expected. Partial claims are NEVER forgiven or settled. If you need to sell and lack the equity to do so because of the partial claim, you will actually have to short the first lienholder to get the partial claim paid in full. NOVAD is just a servicer for HUD.

  24. Hello,

    I’m ready to exit forbearance and I’m considering taking the FHA standalone partial claim option and resuming making normal payments. My question is, will this hurt me in refinancing the house after making the 3 required monthly payments after forbearance? My ultimate goal is to refinance the house to take advantage of the low rates, but would I be able to do both? Use the partial claim option to end the forbearance, then make the 3 required monthly payments and finally do a streamline refinance.

    1. Either way this will cost you the same in the end, however I do understand the partial claim would leave more in your pocket now. Your best bet is to ask the lender doing your refi if they care which way you do it. Ultimately that lenders guidelines will prevail in this situation.

  25. Do I contact HUD or Novad for them to subordinate to 3rd lien position? I can’t seem to find anything online about who to contact or phone numbers.

    1. There is about a 99% chance HUD will NOT subordinate. They want full payoff if you sell or refinance.
      Novad Consulting
      2401 N.W. 23rd St. STE 1A1
      Oklahoma City, Oklahoma 73107
      PH. 877-622-8525
      FAX: 800-963-4917

        1. Makes no difference. I highly doubt HUD will subordinate and give up their lien position. I would not count on getting that HELOC unless they are willing to be in third position.

          1. Hi Sara. I am looking to do the same thing. Geting a Heloc.
            Were you successful with getting one?

  26. We are planning on selling our home, however, we have a partial claim. If we owe $75,000 on the first mortgage, $25,000 on the partial claim, and accept an offer of $125,000, will both the mortgage and partial claim be settled at closing?

  27. I did the forbearance program for the past year due to Covid. I decided to do the partial claim and modification for repayment. They sent a Promissory Noted and Partial Claim Deed of Trust. The Partial Claim Deed of Trust is for $37,457.23. If I sell the home over and above that after all fees are paid, the rest of the money made would go back to me right? They only have a claim on the $37,457.23?

  28. Hi there!

    We had a loan with BOA and did the partial claim to catch up our payments. BOA sold the loan to Carrington. We assumed the whole balance was transferred. We recently decided to refinance and HUD is showing up on our title report? Would we still owe them or would it have been paid when BOA was paid off.

    If it was not paid off, do we need to pay HUD off now in order to refinance?

    Thanks in advance


    1. Partial claims are separately serviced by Novad, and would not have been transferred. You will most likely need to pay it off to refinance. You can contact Novad to get a copy of the payoff.
      Novad Consulting
      2401 N.W. 23rd St. STE 1A1
      Oklahoma City, Oklahoma 73107
      PH. 877-622-8525
      FAX: 800-963-4917

  29. Hi there,
    We are doing a cash out refinance. I did a loan mod in 2016. I contacted Wells Fargo and requested a pay off which they stated included my loan mod payoff. It did not, I went to the county clerk assessors office to check any liens on the title, nothing comes up. My broker received the titile, no liens come up. I have contacted NOVAD and can’t get a response. What happens if this refi closes and I haven’t paid the loan mod off?

        1. Periodically I do get calls where these were somehow missed (perhaps not properly recorded) and they become a problem for the owners later. Send an email to the payoffs address. Make sure to include your FHA case number, your name and your property address and request a payoff statement.
          NOVAD Management Consulting
          2401 N.W. 23rd St. STE 1A1
          Oklahoma City, Oklahoma 73107
          PH. 877-622-8525
          FAX: 800-963-4917

  30. I requested my payoff from Novad for my Covid-19 partial note and received it. I paid it on pay.gov as the letter instructed and it was paid last Friday (6/25). How do I get my satisfaction of lien letter now? I am trying to refinance and they require this.

    Thank you

      1. Do I get the satisfaction of lien after payoff from the county clerk once it is filed or from someone else? Payoff was done on pay.gov per Novad’s instructions.

        1. Ideally Novad sends it to the county clerk, or if they send it to you – make sure to file it with the county clerk. Either way you should be able to get a copy direct from Novad but I would expect a few days/weeks.

  31. Hello,

    I just found out that I have a partial claim lien on my home. Since it’s interest free, can it be settled at closing if I show the promissory note and the payoff letter from my lender? I am due to close this week and HUD is not moving fast at all. Thank you

    1. Hi Juliette. Thanks for sharing. I’m currently in the same situation with Novad and obtaining a payoff statement. I close this Friday and still nothing received from them or to my attorney. How long did it take for you to get your payoff? And did you have to move your closing date?

  32. I refinanced on my home and the hud balance is $26,000 dollars is that correct and if so why is it so high


  33. We are selling our home, and have a hub partial claim on top of our mortgage.

    When we started the selling process I requested a pay off number from both my mortgage company and for the partial claim, so I knew what we needed to sell for in order to make a profit for our new home.

    The partial payment had “pay in 30 days” language on the letter, but my understanding is that number shouldn’t change, correct?

    We are selling for over what the two combined are, and should walk out of the sale of our current home (in the morning) with the cash to settle on our new home (in the afternoon).

    Will they both get paid off at our closing and still allow for us to move forward that afternoon with our new home? Is paying off the partial claim basically just like paying off two mortgages at the same time?

    Thanks for your thoughts and knowledge!

  34. Hello!

    I was on a forbearance plan November 2020 – January 2021 (3 months) on an FHA loan. We did a partial claim and resumed making on time payments February 2021. We then sold our home June 2021. Everything was paid off at closing, including partial claim. We are in the process of purchasing another home FHA. My mortgage broker did not even know we had a partial claim on our Home we just sold. I advised him we did. My question is, are we eligible to receive an FHA loan because we previously had a partial claim? Does this adversely affect us? We are under contract on a home and were approved for a 5% conventional loan. That loan came back from initial underwriting with some conditions that we then cleared. Right before closing the underwriter denied us (approved – ineligible) with no explanation. We assume it’s due to the new algorithms in the AUS. My husband has a 650 credit and I have a 725. We believe his credit did not qualify in the final underwriting. So we have pushed our closing date back and are going FHA with 10% down. Our DTI is very low and the mortgage broker is very confident we will receive the clear to close this go around. My fear is that we don’t. Could the partial claim have anything to do with why the conventional was ineligible? Could the partial claim hurt our chances of closing FHA?

    1. No – a Partial claim wont affect your eligibility to buy again, but the forbearance (and mod following) may have some kind of waiting period before you can get a new loan.

  35. I have an FHA loan and when requesting a payoff realized that I had the HUD claim. HUD has never sent me anything In the 17 years, and now I am in the selling process. How long does it take to hear back from them after requesting how much of a payoff they require?

    Also is there a way to transfer the HUD claim to the new mortgage in order to pay it off?

  36. Hello,

    My HUD partial claim was missed during the title search. Can NOVAD attempt foreclosure on the partial claim even though my new FHA is current? Or will the partial claim just go to collections?

  37. I have a $10,000 partial claim on my home due to covid. I want to refinance or sell my home to pay it off. My home has a lot equity. Would i have to pay the partial claim off first before a refinance or sale? Or would it be paid off at closing?

  38. Hello,

    We are in the process of signing paperwork for a partial claim. We recently fell behind and owe 3 mortgage payments. The partial claim paperwork says it will be in the amount of $3,175. We also recently were able to sell the home to an investor. We don’t have a closing date because they are working with us and willing to wait until we find a rental property. My question is, is it worth it to sign the paperwork for the partial claim? Or if we are able to close on our home in the next 30 days should we just leave the past due alone and take care of it in the payoff? My concerns are the partial lien payoff being more than the $3175. As it stands we are set to receive $8000 profit from selling the home but if the lien is more than anticipated I don’t want to walk away from the sale with zero money. I also don’t know how it would affect our credit to payoff the loan with the last 3 payments showing late or delinquent.

    1. I am unsure what the credit difference would be and you should investigate that matter. Without seeing the partial claim, it would be impossible to know what it will end up being for as it may involve a mod etc, but yes likely it will be more than the past due amount. Also, it may take a while to get the PC done and recorded which may delay your sale.


    1. Your question is a little unclear. The second loan (partial claim) is for missed payments, interest and fees, and sometimes part of any principal that had to be delayed to make a loan modification work.

  40. I’m refinancing my home and have a partial claim, ING Corporation is servicing for HUD what is the email address to request a payoff.

    1. ISN has taken over tall the servicing for HUD partial claims: ISN Corporation – Western Operations Center
      Attention: Secretary Held Loan Servicing
      2000 N Classen Blvd Suite #3200
      Oklahoma City, Ok 73106
      Phone: 1-800-225-5342
      Fax: 1-405-724-7800

      Contact by email:
      Questions: PCServicing@hud.gov
      Payoff Requests: PCPayoffs@hud.gov
      Subordination Requests: PCSubordinations@hud.gov
      Release Requests: PCReleases@hud.gov
      Mortgagee Partial Claim document submittal: PCDocs@hud.gov
      Hours of Operation: Monday-Friday
      7:00 A.M. – 7:00 P.M. Central Time

  41. Hi Minna – I am in the process of refinancing my home and have my original mortgage from PNC plus a Partial Claims Mortgage for almost $9k to cover 8 missed mortgage payments due to Covid and the loss of my job. I finally found the PCPayoffs email address (after numerous attempts to contact Novad and ISN) and sent a request on 10/15. Do you know the current turnaround time? I haven’t received a response yet.

    Also, am I understanding previous responses that the payoff may be a lot higher than the $9k? I thought it was interest free and I know the $9k literally equaled the payment amounts I missed so did not think it would be more :/. Thank you!!

    1. Amy – without seeing your partial claim documents, it would be impossible for me to know how it was structured. Since ISN only took over partial claim servicing a few weeks ago I cant speak to their response times yet, but I can say prior to this service change it could be a day for a payoff, it could be a week. I would try again if a week has passed. Make sure you are including the FHA case number, as well as all your contact info on the email to the payoff address. If you are not on the loan yourself, you will want to also attach a third party authorization to the email.

  42. We sold our House in May 2020 There was a Subordinate Morgage from Ocwen Loan Service For 96,000 Ocwen Loan went Bankrupt and-sold our Morgage to PHH when we sold our house PHH instructed out Attorney to pay Everything to them and they would pay Hud Novad 1 and 1/2 years have now gone by and we got notice PHH Morgage never paid Hud
    My Attorney can’t get any answers From PHH Morgage and Hud is Threatening to attach everything! The Buyers Title company must of missed the particular Claim we disclosed everything to our Attorney What happens now Hud has Notified the buyers and the buyers Attorney what happens next

    1. I recommend anytime you purchase, sell or refinance you should take a good look at the payoff statements from your lenders and your closing documents as they detail the payoffs made from the proceeds – make sure all the numbers match up. Partial claims get paid directly – they do not get paid off by the lender that holds the first mortgage. PHH would not have paid off your partial claim or offered to. Did they receive additional funds in excess of the first mortgage payoff statement? That sounds unlikely. It seems more likely whoever was in charge of getting payoffs right was sleeping on the job that day and did not further investigate the partial claim. However, I assume you included the partial claim in your bankruptcy? In that case they can no longer pursue you for the debt anyway. Time to go review those bankruptcy documents as well as your closing documents.
      Sounds like HUD has a valid lien on the former property as they were never paid off. Unfortunately that is the buyer’s problem now, but one their title insurance should cover as they also should have caught this unpaid lien.

  43. I have 2 HUD liens from 2013 and 2014, we did another modification in 2019 that finally went thru early 2020 (thru same lender but not HUD) would the recent modification superceed the HUD mods?

  44. I found out I needed the payoff from HUD 1 week before I closed on my current home and didn’t receive it in time so had to push closing, it has now been almost 2 weeks and I have called, emailed, the title company has also called and emailed and we were told we could expedite after 6 days. Is there anything more we can do we are in fear of losing our new build

    1. I have updated the info above as:
      Payoff Requests: PCPayoffs@hud.gov
      If requesting a payoff statement, include the FHA Case number, property address, names of the parties on mortgage and if you are not authorized on the account, send a third party authorization form.
      You must follow these directions exactly. If you do not know your FHA case number call your lender and ask for it. I have been receiving these within a day, so I cannot tell you why you would be having an issue if you in fact did it exactly this way.

  45. Hello Mina, following this post as I just sold my house and they won’t release my funds until I receive a payoff request… I’m going on business day 7 today and STILL NO LUCK!….
    Is there anyway I can contact them ? Also is it normal for my funds to be held by the closer till I receive a payoff from HUD directly?
    Any help would be greatly appreciated!

    1. I haven’t had any issues. As long as you follow the directions to a tee (on bottom of post), you should be okay. Im starting to suspect that people are not putting their FHA case numbers on the payoff request. I just did another today. Ill post back when its received. Yes it is normal for funds to be held until payoff amounts are confirmed.

        1. I submitted a request on Dec. 1st and included my FHA case number and all the details including my note and I haven’t received anything yet. The only thing I got was their automated email: Thank you for contacting the U.S Department of Housing and Urban Development. Your request has been forwarded to HUD’s Secretary-Held loan servicing contractor, Information Systems & Networks Corporation (ISN) for processing. Currently, we are experiencing higher than normal requests for Partial Claim payoffs. Your request is important and ISN is working as quickly as possible. If you are requesting a payoff statement, you should receive it within five (5) business days. Please do not submit multiple requests as this may delay processing.

          1. I assume you did get the payoff statement? In every instance where they have not been received it is due to not following the above instructions exactly.

  46. I have been trying to get my hud payoff statement since November 18. It has now been escalated twice. We can not close on the sale of our house till we get this paper. I call isn almost everyday. They just keep saying the same thing, they are behind and trying and to call back in a few days to check on it again. I asked about resubmitting my request again. They said if I did that my time would start over. Any suggestions on what to do or is there a number for higher up person to call when you have issues such as this.
    Thanks in advance

  47. I bought a home in June 2021. I am in process of selling to my son. I am using same title company. I am being told, that there is a Partial claim mortgage on my home in the Name of the people I bought the home from. It was not caught by title company because, seller signed his paperwork on June 18th 2021 and we closed on buying the property on June 25, 2021, Partial claim was not recorded till July 14 2021, that was after the property was in my name and my first lien was recorded. How can I go about getting it cleared up if I dont have any help from the previous owners?

  48. I’m selling my first property and the title search came back with HUD mortgage of $30,000 from 2011 which was from a loan modification I did. We are waiting for the payoff and it’s hard to swallow the the payoff will still be 30,000 even though nothing close to that was needed at the time to get caught up on my loan. Do they offer some type of discount or forgiveness for the amount that wasn’t used?

    1. Yes – these partial claims are almost always higher than expected as they include past due interest, payments, fees, and sometimes a portion of the principal as well. There is no “unused” portion, and no there are no forgiveness plans that I am aware of.

  49. My property had a HUD partial claim lien, which was paid off from the proceeds after refinancing in May 2021. We are refinancing again now with a different lender and during title search, the title company found that the HUD lien is still showing up against my property. The current title company has not been able to resolve this and the closing keeps getting pushed. I’ve tried contacting the previous title company that closed our refinance in May and have not received a response either by email or by phone (have not been able to speak with a person). NOVAD was the partial claim servicing company at the time of refinance. How can I obtain proof of payoff from HUD/NOVAD? I’ve gone through all of my mortgage paperwork and could only find a satisfaction letter from our previous lender that the 1st mortgage was paid in full, but could not find any notification from HUD that the partial claim lien was paid in full (not even sure if they send out satisfaction letters).

    1. If the claim was paid, the lender should have sent out a lien release. This is the document you are looking for now. The CD from your prior refinance would show a payoff to Novad for the partial claim. Take the executed CD and wire info showing the payoff to Novad for the partial claim to HUD and they should issue a new lien release.

  50. I am refinancing my house and have a subordinate lien with ISN for approximately $2,500.00. Is there a timeframe ISN has to respond to my primary mortgage servicer in regards to their request to stay “secondary?” It has been twelve business days and my primary servicer emailed a letter that I should send to ISN to help facilitate the process as the title company has not heard back from them. Interestingly enough there was no email or mailing address to send it to and when asking my primary about the letter they said not to do anything? I talk with random people when calling my servicer and get told different things, so I am not sure really what to expect with this entire process.

    1. As I am a Realtor, I do not deal with subordination requests, although I can tell you ISN does not handle all HUD servicing requests. My guess is the request is going to the wrong person. Also, since the amount is so small, paying it off through refinance seems like a fairly easy solution here.

  51. Hi, I just accepted an offer on my home. The amount will be more than enough to cover my mortgage and my partial claim. Will I need to have the partial claim paid off prior to closing or will it be paid off at closing? I just don’t want anything to cause delays or make things any more complicated.

  52. I have a closing date on my house and a líen with HUD still shows, but I already paid the full amount in 2021. Now I’m having trouble getting someone from HUD to send me the release of lien letter and having trouble communicating with someone from the HUD department. What else can I do

    1. This sounds like a newer partial claim. Please review the payoff statement directions at the bottom of the post EXACTLY and you should receive your payoff statement.

  53. I have sold my home and paid off the hud partial claim as well. Obviously the partial claim was for 30 years and my modification was only 2 years before I sold the house. I was wondering if I should get any money back from the partial claim being satisfied 28 years early? To keep the math simple the partial claim was for $74k and I keep coming up with a difference of $20k over payment. I feel like hud legally ripped me off!

  54. My husband and I paid off the bank portion of our loan in 2019 at which time we did not realize that the Hud portion became do we we inadvertently thought that we had the remaining term of our loan to pay that off. My husband passed away 6 weeks after we paid The bank’s portion of the mortgage that was in November of 2019I was not on the mortgage or on the deed of the property at that time. I contacted Hud after receiving a default notice from them in February of 2020 to try to set up payment arrangements and have the debt transferred into my name and they would not talk to me as I was not on the mortgage or the property deed indeed they asked me to send them then a copy of the marriage you’ll never get death certificate certificate and some financial paperwork And they were supposed to get back to me and they did not. Then in April of 2020 I received a notice from the department of Treasury stating that the debt had been turned over to them for collection I again contacted them to try to resolve the jet they told me the same as hood and told me that I needed to supply them with a copy of the desert to forget our marriage certificate and financial paperwork and again then her nothing in return in return I sent numerous emails trying to set up some sort of payment arrangement. And gotten no reply back. My husband handled all our financials so I was completely clueless as to how they even go about getting the household on my name so it took me approximately me approximately 18 months to have the house put in my name before I was allowed to make payments. So in July of 2021 after I had the house put on my name I contacted Hud again and inquired about getting the debt put in my name so I could Set up payment arrangements And was told that the original $73000 debt is now $94000. But after speaking with the hood workers she was able to guess to pull the debt out of Treasury collection recollection told me that the debt was now a little over $83000 set up a payment arrangement with me but yet still will not put the debt in my name. My understanding is that there was supposed to have been an offer to set up payment arrangements with me with a short period of time after my husband’s death and that never transpired I made numerous attempts to try to pay the debt before it was sent to collections with the Treasury and was denied the ability to do so. I cannot put the debt in my name and so it makes it impossible for me to have access to any sort of funding from any bank or lender. And then there’s the question of the of the additional $10000 a dollar I guess you would call fine that has been added on top of itThen I feel that isn’t fair because I did try to make paymentsAnd since I live in Washington State which is a community property state I should have been allowed to absorb the debt into my name. I’m confused and Lawson don’t know what rights I have and I can’t get anybody to tell me and I don’t know where to turn. Please advise

    1. I’m a little confused about what your question is exactly. If you are still living in the home, why not let the partial claim just sit against the house until you sell? The debt is not in your name and there is no benefit for you to get it into your name. Why did HUD even come looking for this money? It just has to be paid at resale.

  55. Hello,
    I had qualified for the HUD EHLP program back around 2010-2011 and in 2012 I was in a debilitating car accident. I was unemployed and existing on social services for two years and at that point my mortgage kept getting sold to different companies. Once I began to build up my employment, from part time produce clerk to full time hours I finally got a mortgage modification in 2018 because my income was sufficient. I recently found out at the clerk office that HUD EHLP has a $50,000 mortgage on my property. I tried to submit paperwork showing I was unemployed and could not work due to injuries from my car accident and that since my modification I have been paying consistently and asked how to get the lien released and they told me since the payments were not in February 2014 to February 2019, that there was nothing I could do. How can I get this lien released?? Any help or point in the direction where I could get help is greatly appreciated.

    1. If they modified your loan, they took a bunch of back due payments, and interest and possible principal and threw it in that partial claim. It is a valid debt, and will not be forgiven simply because you could prove you were unable to pay during that time. They never forgave your debt, they just reworked it and they still want to get paid. The ONLY way out of a partial claim is full repayment.

  56. Hello I just accepted an offer on my home, will they take the partial claim out of our sale proceeds at closing? Do I need to let my realtor know about the partial claim or will they know about it, during a title search? I also feel like the payoff statement my lender sent me includes the partial claim? Thanks

    1. Your payoff statement from the lender would not include your partial claim. A title search would reveal a partial claim, unless it has not yet been recorded.

  57. Hello

    My dad and brother own a home together. My brother just passed away….my sister inlaw wants to take over mortgage but just found out there’s a HUD lein for 59,000 the house mortgage balance is 250,000 which now brings the payoff to 310,000 if she wants to by house it’ll be $310,000??? Shes only on deed not mortgage.

  58. I was supposed to close on the sale of my current home yesterday but found out about a few partial claim liens that i was unaware of from the title search it showed 3 different subordinate Liens. I am in the midst of disputing. There was One in 2009 for $8360 from GMAC, another in 2013 for $7248 from Ocwen and the last in 2015 for $15,640 from
    Ocwen as well. I was told that these were not all supposed to be partial claim. The numbers do not add up as well. We bought the home for
    roughly $234,000 15 years ago and never did a cash out refi and we are being told we currently owe
    roughly $196,000 with PHH and 3 additional lien amounts owed on our property totaling of roughly
    $31,000 from Housing and Urban development. That means in 15 years we have only paid roughly $7000
    towards principal. That is impossible to me. I remember when doing these modifications that the arrears and fees were included in the primary lien raising our principal balance. I sware we are being charged twice. We have been paying our mortgage since the last modification on time for several years now so I cannot believe that we only paid roughly $7000 towards the principle since we purchased this home 15+ years ago. Something is completely off. My opinion is that when I was with GMAC it was sold to OCwen and then to PHH and caused issues.

    Your advice?

    1. Without seeing the liens and how they break down I am unable to advise, however I have never heard of someone having three partial claims – that seems off. However, partial claims are almost always way higher than folks expect so that does not surprise me. Your best bet is to get these liens in hand and look through the details of each one.

  59. I had a modification done on my loan back in 2010, knew nothing about the HUD lien. I am buying a new house and selling mine. Went through the entire process with finance company and HUD lien never showed up. When I closed on my current house is when this lien popped up. I have asked mortgage company and HUD to send me documentation of why the lien is so high, neither have provided anything. HUD said the amount is set by mortgage company and mortgage company said it was up to HUD. Has been a nightmare. I have never received any information ( even during modification) about having a second lien on house.

    1. Unfortunately it is very common that the amount of the partial claim exceeds expectations. Folks don’t realize that during the loan modification process back due payments, fees, interest, and sometimes a portion of principal gets added into the partial claim to make the modification work. The paperwork you signed during the mod would have allowed for this second lien.

  60. hello I have two partial claims and I am closing on the sale of my home on Monday when I requested for a pay off through isn online through the portal they only provided me with one pay off amount one is for 5369 done in 2013 and the other is for 38830 done in 2017 and the only payoff i get is the one that was done in 2017 its as if the one for 5369 doesn’t exist but i have the paperwork for it and can see it on the website but cant get a payoff

    please help

      1. The lien that wont generate a payoff was recorded in error and they are releasing it that was started on july 26th. what is the typical time frame of this process? I’ve missed my closing twice unfortunatly and the deal is possibly going to fall through due to my previous mortgage company CitiMortgage not claiming the partial claim

          1. thanks for the info ,but the buyer backed away from the sale due to their (CitiMortgage and hud)error and lack of getting it resolved in a timely fashion its been close to 5 weeks since they initiated their "process"

          2. I’m sorry to hear that. Its actually not a Citi error. They have nothing to do with the HUD partial claim. HUD is the issue here. As a general rule, if you need HUD to get you something give it a few weeks. If you need HUD to resolve something give it a few months.

          3. Yea its been a nightmare I've been going back and forth with them. Each one has been blaming the other ever since the closing attorney started trying to figure all this out back in June I even offered just to pay it but ISN cant get a Payoff letter to generate so citi is just doing a lien release and now they are waiting for them to send it back so they can send it to the court for recording I hope its resolved soon

          4. I got a response on the 7th of september that the Lien Release document that was sent to HUD for execution was lost on return back to Citimortgage and now neither company is responding to any update request from the closing attorneys i am at a loss do you have any further advice

            thank you

          5. I’m sorry they have bungled this so badly. I have no idea why they attempted to get this lien released prior to close when they could just have paid it at close. However, now that they have made the payment you must wait for the release to prove that it has been paid. I would request a new release. There is never any finding documents that lenders lose.

          6. yea so back in 2013 this mortgage was recorded but no claim was filed with hud when the partial claim was done I've requested so many times to get this lien release document and haven't had an update since September and they wont even respond to the closing attorney even the rep from ISN cant help me anymore

  61. Hi,
    I am struggling to understand a financial situation I’m in and hope you can help me to get my brain around it.

    I’m selling my home and recently learned we have a partial claim through HUD. I knew about it but didn’t realize it was a separate loan.

    When I took the HUD loan I had been in forbearance for around 12 months. Still, now that I’m selling and see the payoff amount, I’m surprised to learn it is as much as it is.

    As you have referenced, some of the HUD loan includes deferred principle from the primary loan.

    What I don’t understand is, if we pay both loans off at closing, doesn’t paying off the deferred amount in the HUD loan, which wasn’t discounted from the amount we owe on our primary loan, result in me paying off what would ultimately be an excess of the principle borrowed?

    A different way of asking, if I’m not being clear or saying something wrong, is, before we took the HUD loan we owed 182k on our principle loan. Now that we’re selling, we’re paying off 187k on our principle loan along with 25k for the HUD loan. I’m unclear how it is that paying off the HUD loan wouldn’t result in a lower amount being owed on the principle loan.

    1. The payoff statement for your mortgage and your partial claim documents should tell you how these figures break down. Without them I can only take a reasonable guess. That guess is that there was no adjustment of the principal. I would guess the 187k is your 1st mortgage loan payoff (including PB, some fees, interest and perhaps an escrow adjustment included), and the partial claim is for the 12 months of missed payments along with more interest and fees. I believe the banks,media and government have portrayed these forbearances as “homeowner friendly” and “free”, when in fact they are a profit factory for the lenders. Every single partial claim I have ever seen is a huge surprise for the sellers. Its probably as simple as that.

  62. Hello, I am about to file for a bankruptcy and two partial claims total $93,.000. I have $50,000 equity in my home, Will I be able to file a chapter 7 bankruptcy and kept my home, since $26;000 of the of equity secured by law?

  63. Hi. I did a loan modification with my lender during the COVID-19, now I'm trying to sell my home the pay off from my lender is not showing of any payments received from HUD when they took out loan on my behalf from HUD as second mortgage. It seems to me the mortgage lender is getting paid twice. What can I do please

    1. HUD did not pay your lender anything. They simply took all the missing payments/fees etc and turned it into a partial claim, which is now a second lien against your property. Follow the instructions at the bottom of the post to get a partial claim payoff statement from HUD.

  64. We currently have a partial claim on our FHA loan. Back in 2021, I asked my mortgage company if I could forbore 2 payments. I was only behind 1 payment. My mortgage company agreed and sent me paperwork to fill out and have notarized. They stated that when I received the paperwork, to call them and they would walk me through it. The paper work was of coarse legal in nature and was difficult to decipher but we always had a great experience with our mortgage company so myself and a rep from the mortgage company went through the paper work. We skipped through a lot of the verbiage as she told me it was just verbiage and wasn't important. Remember, this was over 1 late payment. We were never in jeopardy of foreclosure. I signed the paperwork as advised by the mortgage rep, had it notarized and sent it back in. Fast forward to Summer 2022 and I inquired about a refi to do some renovation work to our home and pay off a credit card. A new lender went through the process with us, got us approved and literally a few hours away from signing when the lender cam back and said they could not work with us because we had a partial HUD lien on our home. I called our mortgage company and filed a complaint with them. They investigated, went back through phone conversations and admitted the process was misleading but unfortunately there was nothing they could do. HUD stated they will not forgive the partial so now we are stuck. My question is, can we do a streamline refi with HUD to get rid of the lien and come back a year later and do a cash out refi with another lender?

  65. Hi Minna-
    We unfortunately had to do a Covid forbearance plan and ended up with a small partial claim from HUD. Will that affect us if we try to obtain a Home Equity Line of Credit?

    Your knowledge and assistance is appreciated.
    Thank you.

  66. Hello! A few questions if you will. I have a partial claim that I got during Covid. I was recently able to pay off my mortgage through a gift. How long do I have to pay the partial claim? Can HUD take the home if it is not paid in a certain amount of time? Is there assistance to help pay it?

    I appreciate any help you can offer.

    1. The partial claim will be due at resale. I am not aware of any time restrictions to pay on it, as long as you do not sell the home. There is no assistance for partial claims payment.

  67. Hello,

    I truly need help. Please give me a call 309-253-5094. I have a buyer on my own but also a partial claim on my home. I want to avoid foreclosure

  68. We went through a forbearance in 2008. I assume this is called a partial claim for $64k.

    My husband refinanced our house in 2022. Almost a year later we received a letter from HUD saying we have to pay back the 64k because we did not follow through with the original terms. It also said our refinancing company should have included this in their search and notified us & they do not know how or why it wasn't found.

    I called our refi company & explained what they did and they have not called me back. It's now a month later.

    HUD wants $1000.00 a month. We can not afford this.

    Is this legal? Can I sue the refi company ? ( Loandepot)

    1. The refi company would have performed a title search, and forced you to get title insurance. I would look to the title company to see if a resolution is available. If HUD did not properly file the lien (common), then you have no recourse with the title company. If you in fact agreed to pay the 64K, it will be documented in your loan modification documentation. Surely you can negotiate that payment amount down.

  69. Hello Mina,
    I have a situation that is just overwhelmingly confusing here. Seeking advice on on second lien that appeared years after closing. 2015 I took out a HAMP modification through BOA and sold the home in 2016 with profit at closing received with sale. I informed title company or this modification of loan during closing prep and understood it to be included in the final payout that BOA sent at closing. Fast forward three years later (right before Covid hit) I receive a bill in the mail for triple the amount of the HUD modification (Novad) I spoke with them and forwarded them all closing documents in attempts to find a reasonable solution to this very disturbing problem. I heard nothing from Novad for a few years and recently was shocked to find this 26k debt has been brewing up to 89k now (credit report trying to start the home buying process) And within months a wage garnishment order that was sent to my current employer as Department of Treasury doesn’t have to go to court to garnish the 15% -20% of all wages. What kind of attorney would I need here.. where do I start to stop the madness and start to correct this error. Had I known this was owed separately while selling my home – I would have made certain to clear the debt at sale of home . Any advice would help . Thank you for such an informative article

    1. Sorry to hear this. In a perfect world, title would have been searched prior to the sale and the buyer would have gotten title insurance to cover this, but it sounds like perhaps HUD never properly filed a lien. With that said, you would have signed a promissory note agreeing to pay this debt during your loan modification. This document must exist somewhere? Almost 100% of the time, partial claims are way higher than expected, so the amounts do not surprise me. If you in fact have signed a note for this, I am not sure what attorney can help you, unless you wish to file bankruptcy.

  70. My husband and I are looking at buying a home with two different HUD leins totaling 32k. If we buy the home will we become responsible for the hud loans or will they be dismissed under the foreclosure?

    1. Is the property for sale? If you are buying it before the foreclosure, yes, all the liens are your responsibility. If HUD forecloses on the home, they will list it with a Realtor at market value with a clean title.

        1. Buying at auction can be tricky as the property may come with some liens. I am unsure about the partial claim. You should speak to a title insurance agent and see if they would be willing to insure the title.

  71. Hi Minna,

    I would like to know if a partial claim and/ or modification is reversible? Can I revert back to my original loan?

    1. What do you mean reversible? After a mod and a filed partial claim, no there is no going back. You can however pay off your partial claim anytime you like.

  72. Minna,
    In Texas, you can only have one Home Equity Loan (or HELOC) which takes lien position two. If you have a mortgage that you did not take cash out or have an existing HELOC, but have a partial claim mortgage from HUD, must you pay that off before the HELOC or as part of the HELOC process? The partial claim isn't due until 2047 and it's not interest bearing. I'm not selling or refinancing, just looking for a Home Equity Loan. They said HUD won't let a HELOC be provided to me before they were paid in full. The HUB partial claim isn't due for 24 years and I'm looking at a TX 5/15 and in Texas max loan to value can be 80%. I wouldn't want to pay the partial claim as part of my HELOC with interest when the HUD partial claim is interest free. I'm ok with adding it to my "debt" owed on the property to figure the debt % owed and then how much of a HELOC I would qualify for, but not include it in the amount of my HELOC.

    Can't the HUD partial claim take lien position 3 and 4 or be included in the "debt owed" on my property or must I pay it off before I can receive a HELOC? Thank you for any advice you have to offer, you have such a grasp of knowledge on these partial claim mortgages.

    1. Interesting laws Texas has about HELOCs. I had no idea. It may be worth a shot, but I do not believe you will get HUD to subrogate their lien. Why would they? I think you would have to pay off the PC, which makes no sense to do with the HELOC as you would be trading in an interest free loan.

      1. Agreed – and that was the answer I thought I would get, but was hoping that I did not!. Oh well – "life is like a box of chocolates, you never know what you're going to get", as Forrest Gump would say. LOL.

        Thanks again – I truly appreciate your insight!

  73. I sold my home in March of 2022 and has a partial claim that was not paid off. The home was sold to Opendoor. The property was closed through their own title company and they have since resold the property.
    I am unsure how they were able to get clear title with the partial claim still outstanding. Shouldn't the title company and Opendoor have some responsibility on this?

    I have not owned the property in over a year and a half and the partial claim is now showing as a collection on my credit. I am not even sure if I can file bankruptcy on this.

    1. It sounds like the partial claim had not made it to title by the time it closed. That is unfortunate. However, you certainly signed a promissory note to pay the debt as well. To see if you qualify for bankruptcy you would have to speak with a local bankruptcy attorney.

  74. So I thought my house was finally gonna get sold since Im supposed to be closing in a week but just found out I had a partial claim on my house. So now the sale wont cover the mortgage and my equity line of credit( obtained 4 years ago and maxed out) and the partial claim.. But Im also paying a 4th payee… Is there any way that the 4th payee will just has to wait?

  75. Hello,

    Thank you for your services and wealth of information provided through this website. My wife and I had our load modified in 2014. We sold our house last September. Presently, looking back at the commitment from the title company, I see a reference to the loan modification. At the time, we presumed that all liens and obligations were addressed at the close, due to our own ignorance.

    We recently received a letter from HUD stating that we owe $22K. This was initially a shock, but after reading through the questions and comments on your page, I realize that unfortunately it's not unheard of.

    I've seen references in some questions to these partials being a lien on the sold property and other situations being referred to in regards to the signed promissory. Are there some cases in which borrowers modify their loan without a promissory? Regardless, our notice from HUD arrived with a copy of the signed promissory from 2014.

    From what I've read, my only option is to repay the full amount disclosed in the notice. My question is this – Do title companies have any liability in cases that homes are sold with active liens? Isn't one of their primary responsibilities to be sure that all issues are addressed and resolved? To me, it seems reasonable to expect them to make sure that the partial was paid off at closing with everything else with fidelity.


    1. So let me just say after writing this post and watching the responses for the last several years, I am actually kind of surprised at how often HUD fails to record their liens.
      However – almost all mortgages ( including partial claims) have two parts – a promissory note and a lien. That way you are signing for the debt personally, and also giving HUD a lien on the property. Either is sufficient to collect on.
      You are correct about title insurance protecting against liens, but at closing it was the buyer who bought title insurance to protect himself, not you. So if this lien was missed, the buyers title company would be liable.
      But no lien was recorded so there was nothing to find.
      The title insurance you bought when you purchased the home does protect you – but only against events that happened prior to your owning the property.
      So yes – I am afraid I am not seeing a way for you to eliminate this debt without simply paying it. Sorry.

      1. I am writing because I am surprised the stand alone liens and partial claim payments are considered legal, and not real estate "Usury". Do you have a calculation table that explains the percentage rate on loan balance principal that are means of calculating the additional interest paid along with the arrearages that amount to the total balance on the said strand alone liens? I am confused as to how these amounts are derived, and would like the government tables used to calculate the loan amounts. Plus, how can thirty years of interest be applied on a loan that is possibly paid in full at time of sale early (say 12 months), and no refund on those additional years of interest are refunded by HUD? I am asking on behalf of a family member who just got surprised at her home sale following death of husband, and found out she had a stand alone lien she did not know about that had 18 months of arrearages on a home with approx. $152, 000 principal balance on loan and her standalone lien after using the Covid Relief program amounted to 12 months of arrearages which amounted to $14,000 and her standalone payment in full amounted to $44,000? You think a program was designed to help you, was not thoroughly explained, and you come to find out it costs you $33,000 to be allowed 12 months of forbearance that costs $33,000? How does our government respond to that? That is not HELP!!! If this relative had not had quite a bit of equity in her home, she would have been forced into a short sale predicament. At time of sale, neither her realtor nor the title company knew what this loan was (it had same loan number as her original mortgage). How can you be charged interest like that and it not be considered Usury? Why doesn't HUD respond to her when she requests a refund on the 28 1/2 years of interest she paid on a time frame of 18 months? Can you provide an answer or have the table the government uses to derive these loan amounts? Please respond and send if you do. She would love to know if there are class action lawsuits that are now being instigated against this loan fraud practice, too. Hoping to hear back from you. Molly

        1. Welcome to “bank math”. HUD partial claims are not new. They’ve been around for decades. They were just pushed very heavily in the last couple of years as “relief”. My work is selling homes encumbered by these, so my expertise is making them go away and no I don’t know exactly how they are calculated. I’m sure there are some servicing guidelines available somewhere on the web where you can find that information. However, HUD is government, so good luck trying to sue them or getting answers or any accountability at all. In the last few years they have reworked these partial claims to allow almost anybody to not have to pay their mortgage for a couple years. What people don’t realize is that while the free ride is nice, the cost of such is greater than you could ever expect.
          I understand your frustration and I’ve seen it hundreds of times over my career as people realize the amount of their partial claims. It is almost always a huge shock and complete mystery.
          I’m sorry that you’re facing this situation, but the only advice I have to offer you and anyone reading is to never, ever take a “workout” offered by your lender. Loan workouts never truly benefit the borrower in the end, and are in fact, nothing but a massive profit machine for banks and HUD.

  76. We sold our home and found out we had to pay HUD $75,000 from a loan modification. When we closed we ended up paying more for our home then when we purchased it. This was with Wells Fargo.
    Wells Fargo now has put our home down as a foreclosure. I don’t know where to start. I would love to get some of the money back and definitely want to get the foreclosure off. It was a regular sale.
    We hired an attorney when we found out about the $75K but we were told we had to close or risk being sued.