Help with HUD partial Claim

[Tom W.]

So Was in the process of purchasing a property from a homeowner in foreclosure, She owed less than as is value and was going to actually receive some money from sell and the numbers still made sense. After speaking with homeowner, foreclosing lender and the lender's attorney there was no mention of a 2nd mortgage. When I get the payoff letter from attorney though, there is a line item of a Hud partial claim for 50k! Obviously this throws everything off and homeowner was completely unaware of this.

From the little I have learned, this seems to happen when homeowner get a modification, Hud comes in pays the back payments and then has a sort of silent 2nd mortgage that needs to be re-payed when ever they sale in future. I also see that it cannot be shorted and must be payed in full. The help I need is the numbers dont now work in this scenario, what other options do I have as investor? There has to be a solution that can help all parties involved.

Could you short sale the 1st mortgage for the partial claim amount? Is that even possible? Anybody ever deal with this? Any help would be appreciated! Thanks in advance