John Tierney: “this amendment seeks to assist those individuals who are eligible borrowers that have been unfairly impacted by a…”

“this amendment seeks to assist those individuals who are eligible borrowers that have been unfairly impacted by a statutory change to HUD's upfront mortgage insurance premium refund policy. Under the HUD program, borrowers pay an upfront mortgage insurance of 1.5 percent of their FHA loan amount, and if they repay that loan, the borrowers may be due refunds of the prepaid insurance. However, back in 2005 when Congress passed a Consolidated Appropriations Act, it included language directing that, for mortgages endorsed for insurance on or after the date of enactment, which was December 8 of 2004, borrowers would not be eligible for refunds on their prepaid insurance. I have heard from constituents in my district, and I am sure there are constituents in other districts as well, who closed on their mortgage prior to December 8, 2004, but regrettably have been prevented from receiving their refund because HUD did not endorse their loan until after December 2004. These constituents reportedly were not adequately informed by their lender about the potential revisions to the refund policy because the lenders themselves were not informed by HUD of the change until January of 2005. I have heard from one family, for instance, who is seeking to buy a home in Gloucester, Massachusetts, and found themselves harmed by this provision.”