The Bridgewaters, Massachusetts

If you're in foreclosure and if you have an FHA-insured loan, did you know that you can easily stop the foreclosure process? FHA has a loss mitigation option that allows a borrower, with help from a lender, to get an interest-free loan from HUD to bring their mortgage payments up to date.

FHA loans come with a mortgage insurance premium. As such, you can file a "partial claim" to have your mortgage insurance help you with a one-time payment to get your mortgage caught up - and avoid foreclosure. You will need to contact your lender to file a partial claim.

Working together with The Department of Housing and Urban Development (HUD), your lender will agree to help you with a one-time payment from the FHA Insurance Fund. It doesn't matter if you're in foreclosure or not. You may qualify if:

1. Your loan is at least 4 months but no more than 12 months delinquent
2. You are able to begin making full mortgage payments
3. You have resolved the hardship that caused you to fall behind
4. You have the long-term financial stability to support the mortgage debt or make the payment
5. You are not financially qualified to support monthly mortgage payments on a modified mortgage or on a refinanced mortgage in which the total arrearage is included
6. You do not have the ability to repay the past due amount through a special forbearance or modification
7. The property is your primary residence
8. The partial claim must fully reinstate the loan. The partial claim advance may include only principal, interest and escrow advances required to reinstate the loan. In no event may the total arrearage exceed the equivalent of 12 months PITI.
9. You will have to pay all other charges (late fees, legal fees, administrative fees, etc.)

If you have filed for Bankruptcy, you may still qualify for a partial claim. However, the Bankruptcy Court must give its approval.

You will be required to sign a promissory note with HUD and they will place a lien on your property. This HUD loan is interest-free and will bring your account up to date immediately, but it is due when you pay off the loan or when you sell or leave the property.

Here are the terms for the Partial Claim:

1. The note will be interest free.
2. You will NOT be required to make monthly or periodic payments
3. The note will be due when the Mortgage is paid off (or refinanced), or when you sell the property
4. There will be no pre-payment penalty
5. You can apply for a refund in the mortgage insurance premium when the note is paid in full
6. The note is payable to HUD
7. You can make partial payments, but they must be by cashiers check or certified funds