When an individual or a family finances a home through an FHA Loan with the United States Federal Government, they are required to pay a year’s worth of HUD Mortgage Insurance up front – at closing. Therefore, when the individual is making their regular monthly house payments, they are actually keeping their FHA/HUD Mortgage Insurance pre-paid a year in advance at all times.
When this property is sold or re-financed or when the loan is paid off, the year’s worth of FHA/HUD Mortgage Insurance that has been PRE-PAID is supposed to be returned to the individual. Whenever an FHA/HUD Mortgage Insurance Refund goes “unclaimed” for over 2 (two) years, then this information is required (by law) to be released to the public via the Freedom of Information Act.
How Refunds are Disbursed
The United States Federal Government uses an “APPLICATION PROCESS” in order to refund this money.
In other words – the Government does NOT just write the individual a check. Instead the law requires that the individual must first “APPLY” for the Refund by submitting the following information and the necessary Real Estate Documents to HUD:
- The FHA/HUD CASE #
- The necessary paperwork (signed and Notarized)
- The Real Estate Documents
- Copy of the “Original Mortgage”
- Copy of the “Satisfaction of Mortgage”