The Department has stepped up efforts to locate homeowners owed a total of $250 million in Federal Housing Administration (FHA) premium refunds. The Department awarded Walker and Company LLP a contract, not to exceed $2,588,981, to assist the FHA in finding the more than 348,000 homeowners who are owed money.

"It should not cost a homeowner to get money that is rightfully theirs. Our goal is to find that 10-12% of homeowners that we have been previously unable to locate," said Secretary Martinez. "If HUD owes you money, we are going to do more than ever before to locate you and get you your refund."

HUD has been successful in locating and paying the majority of homeowners that are due refunds through its own mailing effort, an Internet site and a 1-800 number. However, the Department has been unable to contact some of the homeowners because their mortgage company did not provide HUD with a correct mailing address or because the homeowners have moved and are no longer at the mailing address in HUD's records.

Under the Freedom of Information Act (FOIA), individuals and companies - so-called third-party "tracers" - request copies of lists of unpaid homeowners. They then use various techniques to find these homeowners and, for a fee, assist them in acquiring their MIP refunds. Tracer fees normally range from 10 to 30 percent of the refunds. HUD is not a party to the transactions between the homeowners and the tracers, and homeowners do not need to go through tracers to receive their refunds.

The new contract will save many of the homeowners the unnecessary expense of obtaining their refund through a tracer.

Refunds are owed to homeowners for upfront mortgage insurance fees paid to the FHA. When homeowners pay off their loan within five years, a portion of the unearned upfront premium is returned. In fiscal year 2002, HUD processed and returned more than 650,000 Upfront Mortgage Insurance Premium (MIP) refunds for more than $680 million.

HUD collects an upfront premium payment on all loans closed in the FHA's Mutual Mortgage Insurance Fund, the Department's most active single-family home loan program. More than six million home loans are currently insured under this program.

If cases remain unpaid for two years, information about the cases is placed on lists that are made available to the public under the FOIA. Currently, the FOIA lists contain information about 148,000 cases with unpaid refunds totaling more than $100 million.

Homeowners who believe they may be owed a refund can use HUD's Internet site to determine if they have a refund due to them. "Does HUD Owe You a Refund" enables you to fill in your name or FHA case number and search HUD's database to scan for a refund. If your name is on the list, you can call 1-800-697-6967 to get your refund. If your name is not on the list, but you believe you are owed a refund, you can call the same number to determine your status.