The partial claim mortgage is a special loan from the Housing and Urban Development department that pays your lender to avoid foreclosure. This type of mortgage is designed to help borrowers who have fallen behind in payments. It provides a no interest loan to cover four to twelve months of back payments.
When applying for a partial claim, borrowers will have to demonstrate their ability to make mortgage payments, as well as their financial hardship. They can also prove that they have fallen behind in their mortgage by providing pay stubs or bank statements. These documents should show that the borrower has fallen behind on their mortgage, as well as any other debts. In addition, the borrower must prove that they intend to continue living in their home as their primary residence.
The amount that you can expect to receive in the form of a partial claim is not very large. Typically, the minimum amount of money you will be able to obtain is a 25% reduction in the principal balance. However, the amount you can get will vary depending on the lender. Usually, you will need to submit two to three years of federal income tax returns and pay stubs as evidence of your income.
A partial claim can be applied for by the homeowner or the borrower’s lender. Borrowers should consult a qualified attorney before deciding whether to pursue a partial claim. If a partial claim is not applied for in a timely fashion, it can damage a person’s credit, especially if they do not receive a timely response from the lender.
Partial claims can be used in conjunction with other FHA mortgage insurance programs. For example, the COVID-19 National Emergency Standalone Partial Claim is a mortgage modification that is available to homeowners with current mortgages. With this option, the homeowner can add a subordinate lien to the loan, which will be paid off when the home is sold.
Another option is to refinance your existing loan, which is another way to exit a partial claim. Depending on your circumstances, you may have to make a large down payment in order to take out a new loan. You will need to pay the partial claim off in full, however, if you choose to refinance. Alternatively, you can apply for forbearance, which will temporarily cut your monthly mortgage payments.
Before you apply for a partial claim, make sure you read the documents. Failure to do so can result in the mortgagee having to pay HUD back for the partial claim. After you are approved, you will be guided through the various steps to filing the paperwork and obtaining the mortgagee’s signature.
Depending on your lender, you may be asked to provide a variety of documents. For example, you may be required to send in bank statements showing that you have been making payments on your mortgage for a certain number of months. Also, the mortgagee will be required to sign a checklist that demonstrates that the applicant has met the required criteria.