Here is a little bit of information About Home Refund processing. What it is? And who gets a refund?
Each borrower of HUD/FHA funds pays 1/2 percent of 1/2 point on the money they borrower for the duration of the loan. This money becomes available for refund to the borrower when they terminate the note in good faith, meaning refinancing or paying off the loan. In the case of foreclosure the borrower forfeits any mortgage refund due to them. This 1/2 percent goes toward the HUD/FHA shared distribution section which covers any losses due to foreclosure and other expenses. The money then sits, drawing no interest for the borrower until they are contacted and register their claim for refund. However, this system breaks down from the beginning because the borrower doesn’t realize they have any money due to them. They have never been told that 1/2 percent if their mortgage payment was being held for a foreclosure fund. Thus, 95% of the individuals with FHA loans never receive the money they are due.
In the 1980’s the General Services Administration directed HUD/FHA to expedite the distribution of unclaimed refunds. One method they chose was allowing individuals, like me, to become “Third Party Processors,” a.k.a. “Tracers” or “Home Refund Specialists” to locate borrowers and assist them in recovering their refunds. At the time of closing on a HUD/FHA loan, the loan officer is supposed to inform the borrower of the 1/2 percent insurance fund. Unfortunately, this seldom is done, and the borrower never realizes this money is waiting to be refunded to them. There are many borrowers who were told at the beginning of their loan, but through the years people tend to forget this item. These circumstances create a great need for Refund Recovery Specialists to locate these borrowers and refund their money.
For a borrower to attempt to recover their HUD refund or their FHA refund with no assistance is very difficult. A borrower must first know their case number. Without this number they cannot correspond with HUD/FHA about the procedures necessary to receive their refund. This can be an extremely time consuming and frustrating proposition. Most people, after several months of failure, will allow a Refund Recovery Specialist to help them. With the addition of new names monthly, and such a small number of individuals being located and refunded the money due to them, this fund grows each month at an amazing rate! This is why we are here for you!