This is a saga, but i will try to keep it as brief and succint as possible...
Several years ago, my (now) husband had been laid off from his job. He was facing foreclosure and was working with his FHA loan servicer at the time, Chase, to come to a repayment program that would meet his financial needs and Chase's. I moved in with him a couple months after he'd started this whole "modification" journey.
Long story short, Chase eventually agreed to modify his mortgage using his current (May 2013) earnings and my monthly household contributions. There were SEVERAL iterations of paperwork that were sent to him, all needing to be signed and returned via FedEx within 24 hours or he would be disqualified from participating in the modification program. My (now) husband, signed every document Chase sent him without reviewing them too closely because he was afraid of being thrown out of the modification program.
Fast forward a few years. I've now become much more entrenched in the the month-to-month payment of bills and everything, and I can't quite understand the balances that Chase was listing on my husband's mortgage statements in 2014 and 2015. There was a "principal owed" of around $130K and a balloon balance of $40k, but I didn't know if the balloon balance was part of the principal owed, or a separate amount. Then his loan was transferred to another servicer in June 2015. In an effort to better understand what the total amount due on the loan was, I requested a payoff statement. The payoff statement sent, thankfully, said he owed somewhere around $130K. His house was valued at $150K, so we felt confident we could move forward with selling our current home and buying a new one.
We received about 6 offers the first weekend the house was on the market, all above asking. We picked the best offer and went into "Option Pending" status. About a week and a half before our scheduled close, however, the title company alerted us to a HUD lien of approx. $40K they'd found on the property. Now....I could detail all of the crap we went through trying to verify this lien, but instead I will just recap to say that HUD/FHA had no record of any debt owed to them. At all. They held the lien, which had been filed by the previous servicer (Chase), but there was no actual debt recorded in their system that related to the lien. Our current servicer, after two weeks of stating that they had no idea what this lien was in relation to, stopped HUD from releasing the lien on their own as an inaccurately filed lien. All of a sudden, our current servicer was telling us and HUD, that while they couldn't validate the amount of the lien or that it was ever owed to them, they didn't think HUD should release the lien because ithe funds were "owed to the prior servicer." Chase, in our case.
Now, anyone who has ever dealt with the government will tell you that they are not all that likely to start accepting blame and apologizing for things, but that was all HUD did. They were embarrased by the situation and kept telling me that our current servicer coming up with "funds owed to prior servicer" on a revised payoff statement to the title company was "shady." But there was nothing HUD could do about it. They had no record of any debt, so it was really a private matter between the current and prior servicers.
So I set out to prove that any and all claim that Chase, as our prior servicer, had on the property had been released when they transfered title to our current servicer. Our closing was delayed 4 times, but our buyer held out. We are talking about a $40K lien here...not an insignficant amount of money to most people. If we had had to pay $40K at close, then we just wouldn't have been able to sell our house. Plain and simple. So our only recourse was to prove that 1) Chase had no interest in the property after they transferred it to our current servicer and 2) if they claimed they WERE owed $40K, then we would ask that they provide full debt validation under the state laws of TX.
Chase was not able, in the end, to prove the $40K debt. They, ultimatley, released the lien completely and reported nothing against my husband's credit. It came down to the fact that even though Chase had reported a "partial claim" against my husband's FHA loan, they had never properly documented the claim with FHA/HUD. They had sold only the principal balance of my husband's note, but had never attempted to collect anything related to the so-called partial claim in over a year since transferring. If not for being a completely doggedly determined ass when it came to emailing everyone and anyone at Chase, and even hiring a lawyer, I do not think this issue would have been resolved and we would have seen $40K coming out of our loan proceeds, that the current and prior lender would have worked out how to distribute long after our close.
Thankfully, we're not made of money and couldn't afford to have $40K taken out of our sale proceeds...and I'm a doggedly determined bitch when it comes to research. I proved a lot more than Chase couldn't validate my husband's debt....I found enough to call into question every debt they'd claimed between 2010-2016.
I wanted to post this message because I had a hard time finding record of ANYONE who had a partial claim dispute on an FHA insured mortgage. I believe, though, that in the coming years, as those who were "rescued" from foreclosure by their mortgage servicers participating in the "Home Affordable" act, but not properly documenting their claims or the amounts owed under those claims, that this post might help someone.
Don't give up. Make them prove the amount they say you owe. Because I guarantee you they can't. They applied a "maximum partial claim" rule against your loan, most likely, but if they can't back that up with what you were actually in arrears at the time you applied for assistance under they Home Affordable act, then they can't actually collect it from you. Especially if the "partial claim" was never filed with FHA/HUD.
Good luck to all! I hope this helps someone!
