HUD Partial Claims Deed of Trust Payoffs (AYU Nov 2024)
Presented by Kay M. Creasman, VP & Virginia State Counsel
Our October webinar focused on foreclosure issues. As part of the materials handed out were instructions on how to obtain a payoff for a HUD partial claims deed of trust. These deeds of trust are interest-free second mortgages (called a “partial claim lien”) that need to be repaid when the real estate is sold. At the national level, FHA has reported that many of these liens are not being paid when the property is refinanced or sold. Make sure your office addresses these liens if they appear in your chain of title.
Payoffs can be obtained through the SMART Integrated Portal (SIP). Information and about how to obtain payoffs and make payments can be found at:
A notice from ALTA® on October 10, 2024 as to wire transfers stated:
"As a reminder, HUD does not accept wire transfers for Secretary-held lien payoffs. The recipient of any Secretary-held lien payoff statement that contains wiring instructions should immediately contact the FHA Resource Center by email or by phone at 800-225-5342 to report that a possibly fraudulent payoff statement has been received and to obtain a correct payoff statement. (Persons with hearing or speech impairments may reach the FHA Resource Center by phone by calling the Federal Relay Service at 800-877-8339.)"
Also, take special care when underwriting a file with a foreclosure of a subordinate deed of trust. If you have any questions be sure to contact VAUnderwriting@OldRepublicTitle.com