FHA Reports HUD Second Liens Are Being Missed
The U.S. Department of Housing and Urban Development (HUD) has several tools to help borrowers avoid foreclosure. One of the resources is through an interest-free second lien—called a partial claim lien—that borrowers can use to pay down arrearages. FHA has reported persistent instances in all areas of the country in recent years where the lien is successfully recorded but not detected by title agents.
According to HUD, the best way to obtain payoffs for partial claims is through the SMART Integrated Portal (SIP). Title companies and attorneys with third-party authorization may create accounts to request and to receive documentation online, often with a short turnaround.
Information and about how to obtain payoffs and make payments can be found here:
Wire Transfers
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.)
