- The Washington Times - Friday, February 16, 2001

If you ever held an FHA-insured mortgage (a loan insured through the Federal Housing Administration), you may have a check waiting for you if you are eligible for a refund on part of your insurance premium or a share of the earnings.

Go to http://www.hud.gov/refunds/index.cfm, where you can search the database by name or by case number. A quick search under CARR revealed two refundees, who only need to call the Department of Housing and Urban Development to claim their checks.

John Carr of Moreno Valley, Calif., has a check waiting for him in the amount of $301.54, and Fred A. Carr, with no address listed, could pick up $735.07. Fred's refund has been sitting there since September 1983.

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

Consumer alert

As in any program in which money is involved, some scoundrels will offer to help people get refunds for a fee. Known as tracers, these folks get information from this free list and contact the people who are owed the money, 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, according to the HUD Web site.

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

• Acquired your loan AFTER Sept. 1, 1983.

• Paid an upfront mortgage insurance premium at closing.

• Did not default on your mortgage payments.

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

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

• Originated your loan before Sept. 1, 1983.

• Paid on your loan for more than seven years.

• HUD processed your FHA insurance termination before Nov. 5, 1990.

There always are 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. (The seller receives no refund.) The owner(s) of the property at the time the insurance is terminated is 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 six years from the date notification was first sent to the last known address of the mortgagor.

If you qualify for a refund, here is how the process works:

• The mortgage company notifies HUD of insurance termination.

• If you are eligible for a refund, HUD either will request that Treasury 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 think 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 that it has sent HUD a request for termination. If the mortgage company confirms that 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; mail: PO Box 23699, Washington D.C. 20026-3699; or on line: www.hud.gov.

M. Anthony Carr has written about real estate issues for more than 12 years. Comments and questions can be sent to him via e-mail (macarr@nvar.com.)

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