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SALT LAKE CITY — People who bought a home using an FHA-backed loan may be owed money by the government.
Third-party companies are finding these people and telling them they can get the money, for a price. However, there is no reason to pay a third party in order to collect the money.
The U.S. Department of Housing and Urban Development website lists thousands of people who are owed money. Most of them have no idea. Many are people who took out an FHA loan which required mortgage insurance. The premium was to be paid upfront.
Kelly Jorgensen, Utah's HUD office director, said people who pay off their loans in full and on time can get some of that premium back.
“If we can’t find them, and sometimes that’s the case in a very small percent, it goes into kind of a holding area and those are unclaimed refunds,” he explained.
HUD is holding $412 million in its refunds box. Those unclaimed refunds can be as little as a couple of dollars or as much as a couple of thousand dollars.
Looking through HUD's unclaimed refunds list, KSL found HUD owed Utah residents Nate and Kristin Harbertson more than $2,000 from the sale of their first home in Park City over 10 years ago. Today, both work in real estate.
“To be so involved in the real estate industry, and to have $2,000 sitting out there and not know about it, and my wife doesn’t know about it, it’s kind of ironic, interesting,” Nate said.
He said he did receive a couple of short letters over the years from people telling him the government owed him money and they'd get it for him, for a cut.
“You just never really think there is money sitting out there. I thought it was somebody trying to prospect me, get a loan, do something with them,” he said.
Jorgensen warned, “There’s no reason why you would need to pay for that.”
He said there are people called HUD tracers who'll track down refund owners, tell them that getting their HUD refund is a long, drawn-out process that can only be done through them. Not true, Jorgensen said.
Usually it just involves a couple of phone calls and sending in some documents.
“You have to prove that it’s you,” he said. “You have to show you have an FHA-insured mortgage and that mortgage has been paid off.”
The question now for the Harbertsons is not whether HUD owes them a refund, it's what they will do with it.
“It’s surprising, it’s special. Maybe I’ll go and take the family on a trip or something,” Nate said.
For anyone who took out an FHA loan in the 21 year period between September 1983 and December 2004, there's a chance you have a mortgage insurance premium refund coming to you. Visit the HUD website or call (800) 697-6967.
Jorgensen said it can take up to 120 days to get a refund, but usually it's quicker.
