You build the seller's net sheet off the loan balance they read you off their statement, and you have never had a reason to doubt it. On an FHA loan that went through a pandemic-era workout, the balance on that statement can be missing tens of thousands of dollars that get repaid at closing.
A mortgage show walks through one real FHA loan, traced by someone who combs the Ginnie Mae disclosure database and posts examples publicly.
The loan: $236,000 at 3.5% in Tennessee, first payment due May 2020. From July 2020 to July 2022, no payments. Then, in the narration, "the FHA stepped in and provided a partial claim of $38,000 to cover the missed payments in that period."
Here is the mechanism that matters to an agent. Paying the arrears brought the loan current, but "it added a zero interest subordinate lien to the back of the loan." As they put it, "this is just a government payment with a promise that the borrower will eventually pay later or when he sells the house."
Then it happened again: from July 2022 to April 2023, no payments, and "the FHA issues a partial claim of $13,000 to cover the 9 months of missed payments" — added to the same subordinate lien.
After a third stretch with no payments, the loan was modified rather than foreclosed. "The interest rate is raised from 3.5% to 7.25% and the monthly payment increases by approximately $400."
So the owner's first mortgage balance looks ordinary. Behind it sit two silent liens totaling $51,000 that come due the day the house sells.
“the FHA stepped in and provided a partial claim of $38,000 to cover the missed payments in that period”
A seller in this position is not hiding anything. They were told their loan was brought current, they have been making a payment ever since, and the statement they hand you shows one balance. Nothing about a partial claim announces itself monthly. So your net sheet is right about everything except the total, and the number you promised is wrong by more than most sellers' entire equity cushion — which you both discover from a title commitment, days before you expected to be scheduling movers.
Fix it with two questions and one document. Ask every seller whether they ever missed payments or went into forbearance, deferral or a modification, and ask it in those words rather than asking whether they are current. Then order the title search early instead of after inspections, so any subordinate lien surfaces while the deal can still be structured around it. On an older FHA loan, treat the balance the seller quotes as one line item, not the payoff.