Thursday, December 13, 2007

Does Uncle Sam Owe You Money?

If you ever held an FHA-insured mortgage -- a loan insured through the Federal Housing Administration -- there may be a refund check waiting for you.
Go to the
FHA Refund Site where you can search the database by name or by case number. When I last looked, a quick search under CARR revealed two refundees, who only need to call the Department of Housing and Urban Development to claim their checks.

One Mr. Carr in California had a check waiting for him in the amount of $301.54, while another Carr with no address, could pick up $735.07. Fred's refund has been sitting there since September 1983.

If your name is on the list, call 1-800-697-6967 to get your refund. For those who search the list and don't find their names but believe they are owed a refund, the site advises to call this same toll-free number to ask about the account status.

There are two types of refunds for FHA borrowers. You can find out if you qualify for a "premium" refund if you meet the following criteria:

  • You acquired your loan AFTER September 1, 1983;
  • You paid an upfront mortgage insurance premium (MIP) at closing; AND
  • You did not default on your mortgage payments.

Review your settlement papers or check with your mortgage company to determine if you paid the upfront premium.

Some borrowers may be eligible for a "distributive share" of any excess earnings from the Mutual Mortgage Insurance fund if you:

  • Originated your loan before September 1, 1983
  • Paid on your loan for more than seven years, AND
  • HUD processed your FHA insurance termination BEFORE November 5, 1990.

There are always exceptions to the rules, and these HUD refunds have their own set of exceptions:

  • Assumptions: When an FHA insured loan is assumed, the insurance remains in force (and the seller receives no refund). The owner(s) of the property at the time the insurance is terminated are entitled to any refund.
  • FHA to FHA Refinances: When an FHA loan is refinanced, the refund from the old premium may be applied toward the upfront premium required for the new loan.
  • Claims: When a mortgage company submits a claim to HUD for insurance benefits, no refund is due the homeowner.
  • Statute of Limitations: HUD is not liable for a distributive share that remains unclaimed 6 years from the date notification was first sent to the last known address of the mortgagor.

If you qualify for a refund, here's how the process works:
The mortgage company notifies HUD of the insurance termination.
If you are eligible for a refund, HUD will either request Treasury to issue you a check directly, or will send you an Application for Premium Refund or Distributive Share Payment (form HUD-27050-B) for more information.

Read the application carefully, sign it, have it notarized, and attach proof of ownership.
HUD either requests Treasury to issue a check or requests additional information from you.
Finally, if you figured you were owed a refund, but have not received a check or an application within 45 days after you have paid off your loan, check with your mortgage company to confirm it has sent HUD a request for termination. If the mortgage company confirms it sent the termination information, contact HUD. If after 60 days from the date you mailed your claim form you still have not received a refund or any other documentation from HUD, contact HUD immediately.

HUD can be notified by:
Phone: 800/697-6967;
By mail: P.O. Box 23699, Washington DC 20026- 3699;
Or by


As in any program where money is involved, there are some scoundrels who will offer to help people get refunds for a fee. Known as "tracers," these folks will get information from this free list and contact the people, offering to help them get their money for a portion of the proceeds.
"You do not need to hire someone to collect your money. You can obtain your refund directly from HUD for free," says HUD.

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