Housing Counselor Certification (HUD) Practice Exam

Which loss mitigation option allows a borrower an FHA Partial Claim?

1. FHA-HAMP Loan Modification

2. Loan Modification

3. Forbearance

4. Refinance

The correct answer is: FHA-HAMP Loan Modification

The FHA Partial Claim program is designed to assist borrowers who are struggling with their mortgage payments by allowing them to bring their loan current without requiring immediate repayment of all delinquent amounts. This option is only available under specific circumstances and is often paired with a loan modification process, which can include the FHA-HAMP (Home Affordable Modification Program) option. In the case of the FHA-HAMP Loan Modification, the Partial Claim works by enabling the borrower to defer part of their unpaid principal balance to a subordinate mortgage. This allows borrowers to reduce their monthly payments to a more manageable level while minimizing the risk of foreclosure. Under this option, the borrower must meet certain eligibility criteria, and the aim of this modification is to provide long-term affordability and stability for borrowers facing financial difficulties. The distinction of the FHA-HAMP specifically includes provisions that integrate the Partial Claim process, making this choice the correct one when discussing which loss mitigation option allows for an FHA Partial Claim. Other options like Loan Modification, Forbearance, and Refinance do not inherently include the FHA Partial Claim provisions in the same way that the FHA-HAMP method does, which emphasizes the structured approach that targets both immediate relief and longer-term sustainability for affected borrowers.