Mortgage Foreclosure & Refinance Resource

If you bought your home after Sept. 1, 1983 with a FHA loan, you had to purchase mortgage insurance. The FHA was supposed to refund that insurance back to you if you made all of your payments and have paid off your mortgage. The Department of Housing and Urban Development (HUD) says that approximately 30 percent of those refunds never get claimed.

Who is eligible for an FHA refund or share?

Premium Refund: You may be eligible for a refund of a portion of the insurance premium if you:

• acquired your loan after September 1, 1983
• paid an up-front mortgage insurance premium at closing
• did not default on your mortgage payments.

Review your settlement papers or check with your mortgage company to determine if you paid an up-front premium.

Distributive Share: You may be eligible for a 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
• had your FHA insurance terminated before November 5, 1990.

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 think you’re eligible, you can use a free search on HUD’s website to look if you are owed money.

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 up-front 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.