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Partial claim. 


Directive Number: 203.371 


 
(a) General. Notwithstanding the conveyance, sale or assignment
requirements for payment of a claim elsewhere in this part, HUD will pay
partial FHA insurance benefits to mortgagees after a period of
forbearance, the maximum length of which HUD will prescribe, and in
accordance with this section.
 
(b) Requirements. The following conditions must be met for
payment of a partial claim:
 
(1) The mortgagor has been delinquent for at least 4 months or such
other time prescribed by HUD;
 
(2) The amount of the arrearage has not exceeded the equivalent of 12
monthly mortgage payments;
 
(3) The mortgagor is able to resume making full monthly mortgage
payments;
 
(4) The mortgagor is not financially able to make sufficient
additional payments to repay the arrearage within a time specified by
HUD; and
 
    (5) The mortgagor is not financially qualified to support monthly
        mortgage payments on a modified mortgage or on a refinanced mortgage in
        which the total arrearage is included.
 
(c) Repayment of the subordinate lien. The mortgagor must
    execute a mortgage in favor of HUD with terms and conditions acceptable
    to HUD for the amount of the partial claim under Sec. 203.414(a).
    HUD may require the mortgagee to be responsible
    for servicing the subordinate mortgage on behalf of HUD.
 
(d) Application for insurance benefits. Along with the
    prescribed application for partial claim insurance benefits, the
    mortgagee shall forward to HUD the original credit and security
    instruments required by paragraph (c) of this section.
 
[61 FR 35018, July 3, 1996, as amended at 62 FR 60130, Nov. 6, 1997]
 
Condition of Property



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