HUD owes refunds to homebuyers nationwide. are you on the list – NBC Chicago
Thousands of Chicago-area families are among the long list of American homeowners who are owed refunds by a federal agency, and many may have no idea they are waiting for them.
Refunds vary in size; some for just a few hundred dollars while others run into the thousands.
A joint investigation by NBC 5 Responds and Telemundo Chicago Responde informed many families for the first time that they were owed money by the US Department of Housing and Urban Development (HUD).
The research also found that once a homeowner finds out that HUD owes them a refund, the process to retrieve it is cumbersome; one that HUD admits it’s trying to improve on.
The refunds are tied to mortgage insurance premiums that homebuyers have paid back for years on loans through the Federal Housing Administration (FHA).
These FHA loans are designed for homebuyers with poor or poor credit, and they come with a requirement that the homebuyer purchase mortgage insurance. These insurance premiums were then paid to the FHA.
Depending on when those borrowers finally sold the property they bought, they may have prepaid insurance premiums — which is now resulting in refunds HUD owes them.
In the Chicago area alone, NBC 5 found that more than 30,000 homeowners owed a total of more than $16.8 million. This area includes homeowners in 12 counties in the Chicago area of Illinois, five counties in northwestern Indiana, and four counties in southwestern Wisconsin.
Are you entitled to a refund? To find out if you are owed money, you can search your name in the database below or click here. If you’re on the list Click here to find your refund on HUD’s website, and start the process to get it. See below for more information on this process.
While many homebuyers owe refunds, a HUD spokesman warned that “most homeowners who have or have had an FHA-insured mortgage are not eligible for a refund.”
Those owed refunds “prepaid a mortgage insurance premium on a loan closing after September 1, 1983 or in other limited circumstances,” the HUD spokesman said.
While many families across the country are still recovering from the economic fury of the pandemic, the news of that money comes at an important time.
NBC 5 Responds and Telemundo Chicago Responde tracked down some of the local families on the HUD refund list to see if they even knew they were owed that kind of money.
On a case-by-case basis, the refunds were a welcome surprise.
“Thank god I can’t believe it,” Juana Sanchez said when NBC 5 told her she was owed more than $600.
Sanchez’s refund was tied to an FHA loan she was approved when she purchased a condo in Humboldt Park in 1998. a moment that never left her.
“I remember the day she [the FHA] called us and said, “You qualify,” Sanchez recalled. “You know, that’s an experience few people have, especially a Latina and a single mom.”
HUD told NBC 5 that the agency is “committed to finding and helping homeowners who are in debt.” [these] refunds.”
But Sanchez wonders why HUD didn’t get to her sooner.
“It’s because they’re not looking,” Sanchez said. “They are the government: if they want to find you, they can find you.”
The same sentiment is shared by the Magana family in Logan Square.
“If you owe the government money, the government is looking for you,” Raul Magana Sr said. “But if they owe you that money, they’re not looking for you.”
Last October, NBC 5 informed Raul and his wife Teresa Magana that they were owed more than $4,100, according to the HUD list. The refund was for insurance premiums they paid for an FHA loan they received in the late 1980s when they bought a house in Logan Square.
The good news came at a crucial time: Raul Magana’s tractor-trailer he uses for work broke down and was sitting in the workshop. The repair bill was in the thousands.
“This [refund] will help my family a lot,” Raul said, adding that he “never heard anything [HUD] never informed me about this money.”
In addition to locating and notifying homeowners of these refunds, NBC 5 also noted that the process that followed for HUD to verify that a person was owed these funds and then actually paid them was lengthy. Homeowners describe it as a hassle.
Last October, NBC 5 Responds and Telemundo Chicago Responde located many on the refund list, broke them the good news, and then watched the process unfold.
One of the first steps in obtaining a refund is obtaining the necessary documentation from HUD to begin the claim process. This application form – called “Form HUD-27050-B” – is tailored to each homeowner and comes directly from HUD.
The agency will only share it with a homeowner by mail through the postal service.
For Juana Sanchez, it took five weeks for the request to arrive after multiple calls to HUD, including calls from NBC 5 on her behalf.
Almost the same schedule for Raul and Teresa Sanchez: the application arrived in four weeks.
When asked why the process is taking so long, and specifically why HUD is not electronically distributing the application to homebuyers, a spokesperson said, “Due to the amount of specific information that is pre-generated on the form, it is not publicly available, nor can it be.” it can be emailed.”
The agency also pointed out that while a “large percentage” of refunds are processed automatically, in these other cases it is the homeowner’s responsibility to provide HUD with the necessary details and documents it needs to issue a refund pay a refund claim.
“[This] often depends on a number of factors, including the homeowner’s willingness to respond, providing accurate contact information, and identifying heirs or estates, among other things,” a spokesperson wrote via email.
HUD’s figures for the last two years seem to show that a small portion of these refunds are processed nationwide each year.
In the first year of the coronavirus pandemic, in 2020, HUD says it processed 3,800 refund requests totaling $5.9 million. The average refund was $1,500.
The next year, the numbers were smaller: HUD processed 3,300 claims totaling $4.4 million, with an average claim amount of $1,300.
Those numbers might be a drop in the bucket given in the Chicago area alone, NBC 5 found 30,269 homeowners who were owed a total of $16.8 million last June.
When NBC 5 and Telemundo Chicago asked HUD the total amount owed to homeowners across the country, the agency said it didn’t have that number on hand and that it needed a Freedom of Information Act request to get it .
For its part, HUD said it recently made changes to try and expedite the refund process.
In August 2020, the agency announced that it had implemented an “interactive process” for homeowners to electronically submit supporting documents related to their award refunds to the agency.
And starting this year, on January 14, HUD removed a notary requirement on the refund request form that homeowners receive in the mail.
The agency said it is working in the future to reduce the amount of documentation required to process homeowner mortgage premium refunds of $300 or less.
After Juana Sanchez and the Magana family received the good news of their refund, the hardest part was waiting.
“This shouldn’t be happening,” Juana said, referring to the challenges she faced trying to get her refund. “It took over my life towards the end.”
Despite this, both families encourage everyone to check the site and follow up on the money they are rightfully owed.
“I encourage people to try and get that money,” Raul Magana said.