www.hudclips.org 


U. S. Department of Housing and Urban Development
Washington, D.C. 20410-8000

April 19, 1995
 
Mortgagee Letter 95-16
 
TO:  ALL APPROVED MORTGAGEES
 
ATTENTION:  SERVICING MANAGERS
 
SUBJECT:  Expedited Homeowner Mortgage Insurance Premium (MIP)
            Refund Process and Revised FHA Homeowners Fact Sheet
 
     The Single Family Insurance Operations Division has
implemented a system enhancement which expedites the disbursement
of MIP refunds to homeowners on pre-paid Federal Housing
Administration (FHA) insured loans.  Cooperation is essential for
this streamlined process to work efficiently.
 
     This process, already in production, has decreased the time
that it takes for a homeowner to receive a FHA refund from 120
days to 30 days.  A benefit to the servicing mortgagee is a
reduction in time spent answering homeowner questions on FHA
refunds.
 
     FHA will, in most cases, disburse refunds to homeowners
automatically following the successful processing of the Mortgage
Insurance Termination data.  However, for this process to be
initiated, the termination data and FHA's database must have
exact matches on the following fields: the FHA case number, the
homeowner's insured property address and the last names of the
homeowners.  The current mailing address is essential in order
for homeowners to receive their refund.  Since disbursements are
sent directly to homeowners based on the information provided by
the mortgagee, it is critical that accurate information is
provided to FHA on the termination record, especially the current
address.
 
     Please note that the rules governing the eligibility of
premium refunds and distributive share payments are based on the
financial status of the FHA fund and are subject to change.  For
more information on homeowner refunds, a revised FHA Homeowners
Fact Sheet, HUD 27050-C, dated 2/95, is attached.  Please
discard all previous editions since they are obsolete.
 
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     If you have any questions concerning this mortgagee letter,
please contact Eva Fontheim at (202) 708-1233.
 
Sincerely yours,
 

Nicolas P. Retsinas
Assistant Secretary for Housing
- Federal Housing Commissioner
 
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