(The Center Square) – The U. S. Department of Housing and Urban Development owes 31,670 Illinoisans refunds for Federal Housing Administration loans that were issued with outdated mortgage insurance requirements.
Many of the FHA loans that qualify for refunds were written in the 1980s and 1990s, Ian Davis, director of single-family insurance operations for HUD, said. But not all of them. He encourages anyone who used an FHA loan to buy a house to go to the HUD website to check to see if they qualify.
Even if a home has been sold and/or if the original FHA borrower is deceased, HUD will issue refund checks to people or to the heirs of people who paid the required mortgage insurance payments.
“These were not overcharges. This is the result of different program requirements and loan requirements back then,” Davis said.
The refunds range from as little as one cent to as much as $6,000 or even more, Davis said.
“The amount of the refund depends on the underwriting that occurred with the loan,” he said. “These are funds owed to the public and we are doing our best to make it easier for people not only to inquire about the refunds but also to get the money back that is owed to them.”
HUD is streamlining the process for people to apply for the refunds, Davis said. Typing the phrase “Does HUD owe you a refund?” in a search engine directs people to the HUD webpage where you can start the process.
If people have the original FHA loan number for the property, that will help. Locate the HUD1 sheet that was issued when the home was purchased or when it was sold and the loan was paid off. Three companies may have copies of the HUD1 sheet: the bank that issued the loan, the settlement company or title company and sometimes the real estate agent.
If the house has been sold, a HUD1 form should be part of the paperwork that the title company issued at closing.
For questions, get in touch with HUD for further assistance.