HUD/FHA Refunds
HUD/FHA Refunds:
The Department of Housing and Urban Development (HUD/FHA) works with several lenders nationwide in assisting potential home buyers in getting loan approval. Through an agreement with these lenders HUD/FHA will step in and make the required monthly mortgage payments if the people cannot. This in turn enables the individual to get loan approval and to purchase the home with much less down. This has helped millions of people buy homes who otherwise would never have been able to qualify.
In order for HUD/FHA to assist these people they must pay into an insurance policy on that loan. There are two insurance policies used with this program. One of these policies is the One Time Mortgage Insurance Premium (MIP). This policy requires one payment to be made upfront at the time the mortgage is acquired. The other policy is the Mutual Mortgage Insurance policy (MMI). This policy is paid during the life of the loan.
These people were told that if they paid back the loan without defaulting on any mortgage payments, either by selling the home, making the required payments, or by refinancing the home, they would be entitled to a refund on the amount that was paid into the insurance policy.
HUD/FHA even sends them a letter but if they do not make an attempt to collect the refund for a period of two years, the refund is then deposited into an unclaimed account. The result is that there are currently thousands of unclaimed cases resulting in millions of unclaimed dollars.
In 1986, HUD/FHA established an effective way of getting this money back to the people. They decided to publish state lists of these unclaimed refund cases and allow anyone who is interested to assist in getting these unclaimed refunds to the people they are owed to. You are allowed to contact these people, let them know they have an unclaimed refund, provide them with a ''found case'' form, and then collect a generous processing fee for the assistance you provide. The processing fee you collect can be as much as 20% of the amount of the refund.
Learn How To Be a Skip Tracer (Handbook) To Find Your People Click Here
The following is an actual unclaimed case. First you will see the name of the refund recipient. The address, city, state abbreviation and zip code shows you where their HUD/FHA insured mortgage was paid off. Following the address is the amount of the refund. The 9 digit number following the refund amount is the case number (the case number is needed when completing the ). And lastly, the date shows you when the refund became available.
Learn How To Be a Skip Tracer (Handbook) To Find Your People Click Here
The following is an actual unclaimed case. First you will see the name of the refund recipient. The address, city, state abbreviation and zip code shows you where their HUD/FHA insured mortgage was paid off. Following the address is the amount of the refund. The 9 digit number following the refund amount is the case number (the case number is needed when completing the ). And lastly, the date shows you when the refund became available.
| Nebot, Rosa 1901 SW 127th Ct Miami, FL 33175 Amount: $1978.92 #095-004056 Date: 03/08/2006 |
If you were to process this unclaimed case, a 20% processing fee would equal $396.
Many cases you process will have approximately the same unclaimed amount as the example above. However, some refunds are much larger therefore your processing fee would increase as well. Keep in mind that you can also charge a ''flat'' fee.
The following is another actual unclaimed case.
| Bolanos, Roberto C 1112 Caraway Ln. Las Vegas, NV 89144 Amount: $2,933.28 #332-466677 Date: 01/27/2009 |
Using the above example, you could charge a 20% processing fee which would equal $587.
Even If you were to only charge a $75 ''flat'' fee per case, and by working just part-time you helped only one or two people receive their refunds per week, you can then get a good idea of how much earning potential this program offers if you wanted to take it further.
HOW TO TRACE
FHA/HUD MORTGAGE
INSURANCE REFUNDS
This is Where You Fit In
Over a period of time the fund has grown quite large and the General Services
Administration (GSA) has ordered HUD/FHA to dispose of the money accumulating in this
account.
HUD/FHA has agreed to let individuals, like yourself, become "tracers". What the tracer
would do is locate the borrowers that are due refunds.
It is important for you to understand that you are not working for the U.S. Government.
The government only acts as a source to refund the money, and not your employer.
You will actually be working for the borrower that is due the refund. The fee that you
charge your client is entirely up to you. However, most tracers work on a fee based on 25% of
the money they collect. With the number of clients available to work with, you should not have
any trouble setting your fee at any reasonable amount.
As a tracer you will be self-employed. However, this may not be all bad. Being self-
employed allows you the ability to be your own boss, the ability to work from the convenience of
your own home, and be able to profit from your own creativity. Perhaps the best part of being
self-employed, however, is the fact that you will be able to write off your expenses such as
printing, mailing fees, and other costs associated with your business. Naturally, you should
consult with a competent accountant for proper IRS filings.
Where to Start:
The first thing that will be necessary will be to obtain a list of new names. This may be accomplished by using the order form placed in the bottom of this page.
We also include the individual price list for State listings For (California) MMI Mortgages for
mortgages paid off in 1977 through two (2) years before the present date.
The list that you receive will be a computer print out, The list may contain thousands of names .
Looking Over The List
What Does The List Contain?
After you have had time to look over your list of people due mortgage insurance
refunds, you will probably find that there may be many discrepancies. Many addresses
will not contain complete zip codes. Some have no zip codes at all. Remember,
HUD/FHA holds the list for two years before making them available and many things can
change. However, do not be discouraged; these people are not as hard to locate as
you might think!
Your lists will be described as follows:
1. The name of the person owed the refund.
A. Many times you will see two names listed, always list both names
have a shortage of names to work with.
2. Last known address.
A. This is the last known address that HUD/FHA had for the borrower. Although
this is a good place to start your search, this does not mean that they still live at
the address.
3. Property Address.
be the same as the last known address. Keep in mind, however that if they sold the home
they would no longer be at that address, but the new owner may have a forwarding address.
4. Incomplete Addresses.
A. We suggest you not spend too much time on incomplete addresses.
Remember, you have many names to work with.
5. The Date The Money Became Available.
A. This information can become valuable. Although we do not suggest you
completely disregard older names, try to work the most recent names first.
6. The Amount Of Money Due The Borrower.
A. Naturally, you will want to work the clients with the largest amount
of refund but do not disregard the smaller amounts. Sometimes they
prove to be the easiest ones to trace.
7. The Case Number.
This is the case number assigned to that particular borrower. It is a
very important number as the claim cannot be processed without
the correct case number.
Why The Borrower Needs You
You Will Eliminate Frustration For Your Client
As a tracer of mortgage insurance funds you will be fulfilling a tremendous need for
your clients. If the borrower is not contacted by HUD/FHA, it becomes very difficult to
recover the money due to them.
They first must know their case number which is listed on the information you receive
on your lists. Without this number they will not be able to correspond with HUD/FHA
to start the procedure of the refund.
You will find that many people you contact have already made an attempt to have the
money refunded. However, without information on the necessary procedures, they have
become extremely frustrated and will be glad to turn the program over to a competent tracer.
You Will Make The Client Aware That Money Is Due
At the act of sale or closing of a HUD/FHA loan, it is the responsibility of the loan
officer to inform the buyer of the 1/2 percent insurance fund. Unfortunately, this is
seldom done and when it is done many people do not understand or forget that the money
is waiting to be returned. This creates a great need for tracers to not only locate the money but
help the person or persons get the refund.
First Things First
What Do I Do First?
Read through carefully and familiarize yourself with not only the concept of
tracing, but the actual steps and correspondence used.
we have provided you with all the informational
tools necessary to begin working out of your home or office. What we can't provide is motivation
that's up to you. The important thing to do will it be worth many
times the money you paid for it.
We are providing you with a very valuable tool. A tool that can be used to build your dream.
Don't allow anyone to steal that dream by convincing you that it can't be done.
Dedicate Time Each Day
The unique thing about becoming a tracer is that you will not only be able to be your
own boss and work from your own home, but you will also be able to control your own
time. However, we suggest that you dedicate a certain amount of time each day to your
new business. You may start with two to three hours if you have that much spare time.
Once you see the results we feel sure that you will spend much more.
Obtain Professional Stationery
It has been said that "you only have one chance for a first impression". With this in mind, we
strongly suggest that as soon as you can, have professional stationery prepared by your local
office supply company.
You can have your printer typeset any form in this booklet. The printer will place your name
and address at the top leaving spaces for the variables (names, addresses, refund amounts, etc.).
Type or print the information very neatly in the spaces. Remember, some people may be
contacted by another tracer, so you want to always have the upper edge by showing a
professional image. There is no doubt they will choose you over a sloppily hand written letter.
Envelopes
Keep in mind, the envelope is the first thing your client will see. If it is not opened you will
not have a chance of doing business with this client. We suggest that you let your printer prepare
your envelopes. You will be able to purchase in quantity which can save you a considerable
mount of money. The main reason, however, is that it lends a more professional image.
Bulk Rate Mail
You might also check with your local post office regarding bulk rates. Most have a minimum
of 200 mail-outs, however, the cost can be less than seventeen cents each.
You will incur a cost for the original bulk rate permit which can run as much as $125.00, but this
is something you can do later with the profits from your new business.
Post Office Box
We suggest that you use a post office box. A street address denotes more of a permanent
business.
Contacting Your First Clients
Step Number One
Once you have obtained your list you will want to start contacting the people. There are
several ways to accomplish this. The first is to simply mail a letter to the name and address
shown on the list. (We will provide the verbiage for the letters and agreements later in this text.)
You will note that we supply two types of introductory agreements. One agreement is
designed to have the refund check mailed to the borrower that is owed the refund, (your client).
The other is designed to have the refund check mailed to you, (the tracer).
Undeliverable Mail
As you start mailing out your letters you will see that many borrowers have moved. You will
receive their letter back marked undeliverable. Do not be discouraged, this a numbers game and
you only need about two percent of your clients to respond to make this a very profitable
business.
Step Number Two
If you receive the letter back from step number one, you will want to re-send the letter under a
different form of correspondence. The next letter will be sent to "Resident" at the same address.
(Remember, you will be supplied with samples of all letters in this text.) The reason the next
letter is sent Resident is very simple. Many times the person or persons currently living at this
address will know where the borrower has moved. In many cases they will contact the borrower
or contact you with the new address of the borrower. Keep in mind this is why you are called a
tracer. You will be tracing the individual owed the money. Also keep in mind that once the client
is found, a return of $200-$300 is well worth your time and effort
Note: Always include "address correction requested" with any correspondence you send.When
possible, the post office will look up the forwarding address.
Step Number Three
Because there are so many names to work from, most tracers go no further than these two
steps, however, there are many other ways to trace a borrower.
Telephone Books
The telephone book can be a very valuable tool in tracing if you know how to use it. If a
borrower has not moved from the city they can be found by simply looking up their telephone
number and giving them a call. You might want to invest in having several large metropolitan
area telephone books sent to you in the areas that you will be working. They will more than pay
for the investment in a short period of time. Call your telephone company and they can instruct
you on how to obtain these books.
Library
The library is another good source for your tracing business. Most libraries carry several
different telephone books in adjacent communities. Chances are your client has left the city or
town, but not the area. The library will also have what is known as a "CrissCross" directory.
This directory will tell you who lives across the street from your client. Most people become
close totheir neighbors and keep in touch after they move. A letter or telephone call to a neighbor
is always a good source of finding the client. The "CrissCross" directory will also give you the
telephone numbers.
Telephone Information
By using your telephone book you can get the area code of the city that you will be calling.
Use this information to call the information operator. The operator should be able to tell you if
the borrower still lives at the address on the list. Although this can cost you money, as you can
see it saves you a lot of time. In many cases the operator will be able to give you a new number
and address if your client has moved, but lives at a new address in the same area.
The National Five Digit Zip Code
As soon as possible you should obtain a "National Five Digit Zip Code Directory"; the
cost is approximately $10.00. Many addresses on your list will have incomplete or no zip
codes. Not everyone knows about this publication and this information will allow you to
send a letter immediately to your client.
Introductory Letters
Unless you choose to make telephone contact with your client, the letter of introduction will be
the first letter to be sent, and your first communication with the client. Keep in mind that this will
be your first impression on the client and should be done in a professional manner.
The introductory letter basically tells the borrower (your client) that they have money due them
from the Federal Government. You can use two different letters. One that allows the check to be
sent directly to the borrower, and one that allows the check to be sent to your address. We find
that most tracers prefer to have the check mailed to them. Both ways have proven to be
successful and it will be up to you to decide how you want to handle it.
Let's take a look at both letters on the following pages.
Letter Number One - Used When Check Is Mailed To Borrower
(Your Professional Stationary At Top)
(Today's Date)
(Borrower's Name)
(Borrower's Address)
Dear Mr./Mrs./Ms.,
The intent of this letter is to notify you that the U.S. Government is holding money (put in amount from list) that is rightfully yours. This money has been available to redeem since (Put in date from list) and it is not earning interest. If you qualify, we can help you receive this money.
We are in the business of helping people, like yourself, recover their money. As a business we charge a processing fee of 25% of your claims value (put in amount of percentage) which covers our cost and the time involved to recover your money. This charge is not applicable until you receive your check from the government.
Our service includes: Locating the recipient. Processing the paper work, on going communication with the Government offices involved on your behalf, filing the necessary documents, having your refund to you within six weeks of the date your completed paperwork is received at our office.
There will be no further charge to you in the event our costs exceed this amount. if you are interested in our services, please sign the authorization agreement which must be notarized. This document allows us to recover your money by acting as your agent. Prompt return of both documents will speed up the recovery process.
If you have any questions regarding our services, please call our office. We are looking forward to working with you in the near future. I remain,
Sincerely,
(your name and address)
(your telephone number)
Letter Number Two - Used When Check Is Mailed To Tracer
(Your Professional Stationary At Top)
(Today's Date)
(Borrower's Name)
(Borrower's Address)
Dear Mr./Mrs./Ms,
The intent of this letter is to notify you that the U.S. Government is holding money (put in amount from list) that is rightfully yours. This money has been available to redeem since (Put in date from list) and it is not earning interest. If you qualify, we can help you receive this money.
We are in the business of helping people, like yourself, recover their money. As a business we charge a processing fee of 25% of your claims value (put in amount of percentage) which covers our cost and the time involved to recover your money. This charge is not applicable until you receive your check from the government.
Our service includes: Locating the recipient. Processing the paper work, on going communication with the Government offices involved on your behalf, filing the necessary documents, having your refund to you within six weeks of the date your completed paperwork is received at our office. We will then notify you within five working days of its arrival.
There will be no further charge to you in the event our costs exceed this amount, if you are interested in our services, please sign the authorization agreement which must be notarized. This document allows us to recover your money by acting as your agent. Prompt return of both documents will speed up the recovery process.
If you have any questions regarding our services, please call our office. We are looking
forward to working with you in the near future. I remain,
Sincerely,
(your name and address)
(your telephone number)
The Contract
You will be working with your client to recover the mortgage insurance funds due them from
HUD/FHA. To insure payment for your involvement you will want to enter into a simple
contract with your client. We suggest that you use the following contract:
This contract is made this____ day of____ ,19____
By and between: (Borrower's name)
(Borrower's address)
And: (Your name)
(Your address)
With regard to the following recitals:
Whereas, (borrower's name) may have a valid claim, for funds in the amount of (encumb amount) from the U.S. Government;
And whereas, (borrower's name) waives all of his/her rights of privacy and expressly authorizes (your name) to obtain payment information that has been approved and certified by the U.S. Government relative to his/her claim for (encumb amount);
And whereas, (borrower's name) has not knowingly applied for the (encumb amount) governmental claim since (encumb date) at any other time or any other individual or company;
And whereas, (your name) is in the business of locating and issuing the necessary documents to the U.S. Government for the payment of funds on behalf of a valid claimant;
And whereas (borrower's name) is desirous of having (your name) process the necessary documents in (borrower's name) behalf for a fee.
Therefore, the parties, by reason of the aforesaid recitals and by their mutual agreement hereinafter contained, do hereby stipulate and agree as follows.
1. (Borrower's name), authorized (Your name) to act as his/her agent for a fee.
2. (Borrower's name), certifies that he/she has occupied and/or retained title to: (property address).
3. (Borrower's name), shall execute any and all documents necessary for (your name) to perform the service to obtain the government check in the amount of (encumb amount) which has been available since (encumb date).
By and Between: (Borrower's name)
(Your name)
4. (Borrower's name), shall pay to (your name) a processing fee of (percentage) equaling to (percentage of encumb amount) for his services, within five (5) working days from the receipt of the (encumb amount) government check.
5. (Borrower's name), understands that the (encumb amount) government check will arrive at tracer's address, direct from the government, within six weeks after this agreement is received by (your name) at (your address).
6. Should suit be commenced or an attorney employed to enforce payment of the sum of (percentage of encumb amount, or processing fee) pursuant this agreement (borrower's name) agrees to pay such additional sum as the court may adjudge reasonable as attorney's fees in said suit.
Signed, this____ day of________,19____
__________________________________
Signature of Borrower
__________________________________
Telephone number
__________________________________
Signature of Tracer
__________________________________
Telephone number
SPECIFIC POWER OF ATTORNEY
( I ) ( We ), the undersigned. (am) (are) the claimants entitled to be paid by the Distributive Shares Branch of the United States Department of Housing and Urban Development (MUD), Washington DC 20410, a distributive share in the amount of_________________ , generated by the property located at
_________________________________________________.
(I) (We ) understand that a U.S. Treasury check which is payable to the undersigned in this amount would ordinarily be sent to (me) (us) at (my) (our) home address of:
________________________________________________
located at:________________________________________
It is expressly understood that this Specific Power of Attorney does not authorize nor empower anyone other than the undersigned to affix (my) (our) signature (s) to the check.
Signed, this ______day of ________ , 19______
____________________________ ________________________________
Witness Signature
____________________________ ________________________________
Witness Signature
On this _____ day of ______ , 19_____ personally appeared before me;
________________________________________
the person or persons signing this specific Power of Attorney and acknowledge to me they have executed this instrument as their own act of deed.
________________________________________
NOTARY PUBLIC
HUD/FHA
REQUIREMENTS
Third party tracers are required to comply with the following procedures when reporting a
claimant (owner of record at the time the mortgage was paid in full or the legal heir) due
distributive share or premium refund from the Department Housing and Urban Development's
(HUD) Mutual Mortgage Insurance Fund. Note: HUD is NOT a party to any agreements,
financial or otherwise, between the tracer and the claimant(s).
EP #1.
Tracers must submit all of the mandatory claimant information to HUD on the attached
Tracer Found Case (TFC) form. (The form may be reproduced locally). Incomplete forms
will not be processed.
SEND FORM TO:
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
DISTRIBUTIVE SHARES BRANCH
P. O. BOX 23699, WASHINGTON, D. C. 20016-3699
Claimant(s) must certify that they have not received a distributive share or premium refund from
HUD in connection with the FHA-insured mortgage payoff.
Claimant(s) shall authorize only one tracer to submit the TFC form on their behalf.
HUD will accept only one TFC form for each unpaid case.
EP #2.
HUD will mail the form HUD-2042, Notice of Distributive Share or Premium Refund to
the claimant(s), at the mailing address provided. The form HUD-2042 will not be mailed
to the tracer due to widespread abuse of the program.
Claimant(s) signs and returns the form HUD-2042 along with proof of ownership. (A copy
of the canceled original Deed of Trust Note. Quit Claim Deed or other deeds is considered
proof of ownership and any supporting documentation showing entitlement such as divorce
decree with property settlement and death certificate. (All documents submitted must be properly
recorded and executed.) NOTE: HUD no longer accepts copies of recorded instruments which
were obtained from public records as sole proof of ownership. Such copies are readily available
to the general public and their possession does not prove that a particular claimant was the owner
of the property when the FHA insured mortgage was paid in full.
Only claimant(s) who were the owner(s) of record of the mortgaged property at the time the
FHA-insured mortgage was paid in full or the legal heir may be entitled to a premium refund or
distributive share. All claimants(s) shown on the proof of ownership must sign form HUD-2042.
EP#3.
Upon receipt of a properly executed form HUD-2042 and acceptable proof of ownership
HUD certifies the case for payment and provides advice to the Department of the Treasury to
issue the check.
The check is made out to the claimant(s) and sent to the mailing address provided on the form
HUD-2042. Addresses different from claimants shall be authorized only upon submission of a
properly notarized specific power of attorney with the form MUD-2042.
HUD will only accept the power of attorney using the language in the attached sample form.
Note: This power of attorney only authorizes the check to be sent to a different address, The
check is not made payable to the tracer.
Allow 90 days from submission of the form MUD-2042 for payment processing before making
an inquiry. Tracers must submit inquiries or payment status request in writing, accompanied by a
release under the Privacy Act signed by the Claimant(s).
The Tracer Found Case
As a tracer you will be requested to submit all claimant information to HUD/FHA on a tracer
found case (TFC) form. This form may be reproduced locally. However, it is important that it
be reproduced with the same information. Feel free to use the TFC form supplied with this
publication.
TRACER FOUND CASE
DISTRIBUTIVE SHARE-MORTGAGE INSURANCE PREMIUM REFUND
THIRD PARTY TRACER INFORMATION
Tracer Name: ___________________________________________________
Address: ___________________________________________________
Street Apt. No.
_____________________________________________________________
City State Zip Code
Telephone Number: ( ) ___________________
CLAIMANT INFORMATION
FHA Case Number: ________ - _______________ ________
IMPORTANT!!! Do Not Omit!!!
Name: _____________________________________________________
(First, middle initial and last name)
_____________________________________________________
(Additional Names)
Address: _____________________________________________________
(Street and Apt. No.)
_____________________________________________________
(City, State, and Zip Code)
Phone Number: ________ - ________ - ___________
(Include Area Code)
Property Address:____________________________________________________
Street Apt. No.
____________________________________________________
City State Zip Code
Date Title Acquired_______ Date Property Sold: ________ Date Mortgage Paid Off:______
The Department of Housing and Urban Development is not a party to any financial agreement between the tracer and the claimant.
MORTGAGORS: I/We, hereby certify that I/We never received a distributive share or premium refund from HUD in connection with this FHA insured mortgage. I/We consent to the above Tracer submitting this form on my/our behalf.
SIGNATURE (S) ____________________________ Date _______
of Mortgagor (s) ____________________________ Date _______
FORWARD YOUR "FOUND" CASES TO: Department Of Housing and Urban Development, Distributive Shares Branch, PO Box 23699, Washington, D. C. 20026-3699
So Get A Refund List Today For Just $10.00
A List Will Be Mail To You
A List Will Be Mail To You
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