would be the same as the last known address. Keep in mind, however
that if they sold
the home they would no longer be at that address, but the new owner
may have a
forwarding address.
4. Incomplete Addresses.
A. We suggest you not spend too much time on incomplete addresses.
Remember, you have many names to work with.
5. The Date The Money Became Available.
A. This information can become valuable. Although we do not suggest you
completely disregard older names, try to work the most recent names
first.
6. The Amount Of Money Due The Borrower.
A. Naturally, you will want to work the clients with the largest amount
of refund but do not disregard the smaller amounts. Sometimes they
prove to be the easiest ones to trace.
7. The Case Number.
This is the case number assigned to that particular borrower. It is a
very important number as the claim cannot be processed without the
correct case number.
Chapter Seven:
Why The Borrower Needs You
You Will Eliminate Frustration For Your Client
As a tracer of mortgage insurance funds you will be fulfilling a
tremendous need for
your clients. If the borrower is not contacted by HUD/FHA, it becomes
very difficult to
recover the money due to them.
They first must know their case number which is listed on the information
you receive
on your lists. Without this number they will not be able to correspond
with HUD/FHA
to start the procedure of the refund.
You will find that many people you contact have already made an attempt
to have the
money refunded. However, without information on the necessary procedures,
they have
become extremely frustrated and will be glad to turn the program over to
a competent tracer.
You Will Make The Client Aware That Money Is Due
At the act of sale or closing of a HUD/FHA loan, it is the responsibility
of the loan
officer to inform the buyer of the 1/2 percent insurance fund.
Unfortunately, this is
seldom done and when it is done many people do not understand or forget
that the money
is waiting to be returned. This creates a great need for tracers to not
only locate the money but
help the person or persons get the refund.
Chapter Eight:
First Things First
What Do I Do First?
Read through the booklet carefully and familiarize yourself with not only
the concept of
tracing, but the actual steps and correspondence used. Feel free to copy
or reproduce
anything in this manual.
With the purchase of this publication we have provided you with all the
informational
tools necessary to begin working out of your home or office. What we
can't provide is motivation
that's up to you. The important thing is to use this manual only if you
do will it be worth many
times the money you paid for it.
We are providing you with a very valuable tool. A tool that can be used
to build your dream.
Don't allow anyone to steal that dream by convincing you that it can't be
done.
Dedicate Time Each Day
The unique thing about becoming a tracer is that you will not only be
able to be your
own boss and work from your own home, but you will also be able to
control your own
time. However, we suggest that you dedicate a certain amount of time each
day to your
new business. You may start with two to three hours if you have that much
spare time.
Once you see the results we feel sure that you will spend much more.
Obtain Professional Stationery
It has been said that "you only have one chance for a first
impression". With this in mind, we
strongly suggest that as soon as you can, have professional stationery
prepared by your local
office supply company.
You can have your printer typeset any form in this booklet. The printer
will place your name
and address at the top leaving spaces for the variables (names,
addresses, refund amounts, etc.).
Type or print the information very neatly in the spaces. Remember, some
people may be
contacted by another tracer, so you want to always have the upper edge by
showing a
professional image. There is no doubt they will choose you over a
sloppily hand written letter.
Envelopes
Keep in mind, the envelope is the first thing your client will see. If it
is not opened you will
not have a chance of doing business with this client. We suggest that you
let your printer prepare
your envelopes. You will be able to purchase in quantity which can save
you a considerable
mount of money. The main reason, however, is that it lends a more
professional image.
Bulk Rate Mail
You might also check with your local post office regarding bulk rates.
Most have a minimum
of 200 mail-outs, however, the cost can be less than seventeen cents
each.
You will incur a cost for the original bulk rate permit which can run as
much as $125.00, but this
is something you can do later with the profits from your new business.
Post Office Box
We suggest that you use a post office box. A street address denotes more
of a permanent
business.
Chapter Nine:
Contacting Your First Clients
Step Number One
Once you have obtained your list you will want to start contacting the
people. There are
several ways to accomplish this. The first is to simply mail a letter to
the name and address
shown on the list. (We will provide the verbiage for the letters and
agreements later in this text.)
You will note that we supply two types of introductory agreements. One
agreement is
designed to have the refund check mailed to the borrower that is owed the
refund, (your client).
The other is designed to have the refund check mailed to you, (the
tracer).
Undeliverable Mail
As you start mailing out your letters you will see that many borrowers
have moved. You will
receive their letter back marked undeliverable. Do not be discouraged,
this a numbers game and
you only need about two percent of your clients to respond to make this a
very profitable
business.
Step Number Two
If you receive the letter back from step number one, you will want to
re-send the letter under a
different form of correspondence. The next letter will be sent to
"Resident" at the same address.
(Remember, you will be supplied with samples of all letters in this
text.) The reason the next
letter is sent Resident is very simple. Many times the person or persons
currently living at this
address will know where the borrower has moved. In many cases they will
contact the borrower
or contact you with the new address of the borrower. Keep in mind this is
why you are called a
tracer. You will be tracing the individual owed the money. Also keep in
mind that once the client
is found, a return of $200-$300 is well worth your time and effort
Note: Always include "address correction requested" with any
correspondence you send. When
possible, the post office will look up the forwarding address.
Step Number Three
Because there are so many names to work from, most tracers go no further
than these two
steps, however, there are many other ways to trace a borrower.
Telephone Books
The telephone book can be a very valuable tool in tracing if you know how
to use it. If a
borrower has not moved from the city they can be found by simply looking
up their telephone
number and giving them a call. You might want to invest in having several
large metropolitan
area telephone books sent to you in the areas that you will be working.
They will more than pay
for the investment in a short period of time. Call your telephone company
and they can instruct
you on how to obtain these books.
Library
The library is another good source for your tracing business. Most
libraries carry several
different telephone books in adjacent communities. Chances are your
client has left the city or
town, but not the area. The library will also have what is known as a
"crisscross" directory.
This directory will tell you who lives across the street from your
client. Most people become
close to their neighbors and keep in touch after they move. A letter or
telephone call to a neighbor
is always a good source of finding the client. The "crisscross"
directory will also give you the
telephone numbers.
Telephone Information
By using your telephone book you can get the area code of the city that
you will be calling.
Use this information to call the information operator. The operator
should be able to tell you if
the borrower still lives at the address on the list. Although this can
cost you money, as you can
see it saves you a lot of time. In many cases the operator will be able
to give you a new number
and address if your client has moved, but lives at a new address in the
same area.
The National Five Digit Zip Code
As soon as possible you should obtain a "National Five Digit Zip
Code Directory"; the
cost is approximately $10.00. Many addresses on your list will have
incomplete or no zip
codes. Not everyone knows about this publication and this information
will allow you to
send a letter immediately to your client.
Chapter Ten:
Introductory Letters
Unless you choose to make telephone contact with your client, the letter
of introduction will be
the first letter to be sent, and your first communication with the
client. Keep in mind that this will
be your first impression on the client and should be done in a
professional manner.
The introductory letter basically tells the borrower (your client) that
they have money due them
from the Federal Government. You can use two different letters. One that
allows the check to be
sent directly to the borrower, and one that allows the check to be sent
to your address. We find
that most tracers prefer to have the check mailed to them. Both ways have
proven to be
successful and it will be up to you to decide how you want to handle it.
Let's take a look at both letters on the following pages.
Letter Number One - Used When Check Is Mailed To Borrower
(Your Professional Stationary At Top)
(Today's Date)
(Borrower's Name)
(Borrower's Address)
Dear Mr./Mrs./Ms.,
The intent of this letter is to notify you that the U.S. Government is
holding money (put in amount from list) that is rightfully yours. This money
has been available to redeem since (Put in date from list) and it is not
earning interest. If you qualify, we can help you receive this money.
We are in the business of helping people, like yourself, recover their
money. As a business we charge a processing fee of 25% of your claims value
(put in amount of percentage) which covers our cost and the time involved to
recover your money. This charge is not applicable until you receive your
check from the government.
Our service includes: Locating the recipient. Processing the paper work,
on going communication with the Government offices involved on your behalf,
filing the necessary documents, having your refund to you within six weeks
of the date your completed paperwork is received at our office.
There will be no further charge to you in the event our costs exceed this
amount. if you are interested in our services, please sign the authorization
agreement which must be notarized. This document allows us to recover your
money by acting as your agent. Prompt return of both documents will speed up
the recovery process.
If you have any questions regarding our services, please call our office.
We are looking forward to working with you in the near future. I remain,
Sincerely,
(your name and address)
(your telephone number)
Letter Number Two - Used When Check Is Mailed To Tracer
(Your Professional Stationary At Top)
(Today's Date)
(Borrower's Name)
(Borrower's Address)
Dear Mr./Mrs./Ms,
The intent of this letter is to notify you that the U.S. Government is
holding money (put in amount from list) that is rightfully yours. This money
has been available to redeem since (Put in date from list) and it is not
earning interest. If you qualify, we can help you receive this money.
We are in the business of helping people, like yourself, recover their
money. As a business we charge a processing fee of 25% of your claims value
(put in amount of percentage) which covers our cost and the time involved to
recover your money. This charge is not applicable until you receive your
check from the government.
Our service includes: Locating the recipient. Processing the paper work,
on going communication with the Government offices involved on your behalf,
filing the necessary documents, having your refund to you within six weeks
of the date your completed paperwork is received at our office. We will then
notify you within five working days of its arrival.
There will be no further charge to you in the event our costs exceed this
amount, if you are interested in our services, please sign the authorization
agreement which must be notarized. This document allows us to recover your
money by acting as your agent. Prompt return of both documents will speed up
the recovery process.
If you have any questions regarding our services, please call our office.
We are looking
forward to working with you in the near future. I remain,
Sincerely,
(your name and address)
(your telephone number)
Chapter Eleven:
The Contract
You will be working with your client to recover the mortgage insurance
funds due them from
HUD/FHA. To insure payment for your involvement you will want to enter
into a simple
contract with your client. We suggest that you use the following
contract:
This contract is made this____ day of____ ,19____
By and between: (Borrower's name)
(Borrower's address)
And: (Your name)
(Your address)
With regard to the following recitals:
Whereas, (borrower's name) may have a valid claim, for funds in the
amount of (encumber amount) from the U.S. Government;
And whereas, (borrower's name) waives all of his/her rights of privacy
and expressly authorizes (your name) to obtain payment information that has
been approved and certified by the U.S. Government relative to his/her claim
for (encumber amount);
And whereas, (borrower's name) has not knowingly applied for the
(encumber amount) governmental claim since (encumber date) at any other time
or any other individual or company;
And whereas, (your name) is in the business of locating and issuing the
necessary documents to the U.S. Government for the payment of funds on
behalf of a valid claimant;
And whereas (borrower's name) is desirous of having (your name) process
the necessary documents in (borrower's name) behalf for a fee.
Therefore, the parties, by reason of the aforesaid recitals and by their
mutual agreement hereinafter contained, do hereby stipulate and agree as
follows.
1. (Borrower's name), authorized (Your name) to act as his/her agent for
a fee.
2. (Borrower's name), certifies that he/she has occupied and/or retained
title to: (property address).
3. (Borrower's name), shall execute any and all documents necessary for
(your name) to perform the service to obtain the government check in the
amount of (encumber amount) which has been available since (encumber date).
By and Between: (Borrower's name)
(Your name)
4. (Borrower's name), shall pay to (your name) a processing fee of
(percentage) equaling to (percentage of encumber amount) for his services,
within five (5) working days from the receipt of the (encumber amount)
government check.
5. (Borrower's name), understands that the (encumber amount) government
check will arrive at tracer's address, direct from the government, within
six weeks after this agreement is received by (your name) at (your address).
6. Should suit be commenced or an attorney employed to enforce payment of
the sum of (percentage of encumber amount, or processing fee) pursuant this
agreement (borrower's name) agrees to pay such additional sum as the court
may adjudge reasonable as attorney's fees in said suit.
Signed, this____ day of________,19____
__________________________________
Signature of Borrower
__________________________________
Telephone number
__________________________________
Signature of Tracer
__________________________________
Telephone number
SPECIFIC POWER OF ATTORNEY
( I ) ( We ), the undersigned. (am) (are) the claimants entitled to be
paid by the Distributive Shares Branch of the United States Department of
Housing and Urban Development (MUD), Washington DC 20410, a distributive
share in the amount of_________________ , generated by the property located
at
_________________________________________________.
(I) (We ) understand that a U.S. Treasury check which is payable to the
undersigned in this amount would ordinarily be sent to (me) (us) at (my)
(our) home address of:
________________________________________________
located at:________________________________________
It is expressly understood that this Specific Power of Attorney does not
authorize nor empower anyone other than the undersigned to affix (my) (our)
signature (s) to the check.
Signed, this ______day of ________ , 19______
____________________________ ________________________________
Witness Signature
____________________________ ________________________________
Witness Signature
On this _____ day of ______ , 19_____ personally appeared before me;
________________________________________
the person or persons signing this specific Power of Attorney and
acknowledge to me they have executed this instrument as their own act of
deed.
________________________________________
NOTARY PUBLIC
Chapter Twelve:
HUD/FHA
REQUIREMENTS
Third party tracers are required to comply with the following procedures
when reporting a
claimant (owner of record at the time the mortgage was paid in full or
the legal heir) due
distributive share or premium refund from the Department Housing and
Urban Development's
(HUD) Mutual Mortgage Insurance Fund. Note: HUD is NOT a party to any
agreements,
financial or otherwise, between the tracer and the claimant(s).
EP #1.
Tracers must submit all of the mandatory claimant information to HUD on
the attached
Tracer Found Case (TFC) form. (The form may be reproduced locally).
Incomplete forms
will not be processed.
SEND FORM TO:
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
DISTRIBUTIVE SHARES BRANCH
P. O. BOX 23699, WASHINGTON, D. C. 20016-3699
Claimant(s) must certify that they have not received a distributive share
or premium refund from
HUD in connection with the FHA-insured mortgage payoff.
Claimant(s) shall authorize only one tracer to submit the TFC form on
their behalf.
HUD will accept only one TFC form for each unpaid case.
EP #2.
HUD will mail the form HUD-2042, Notice of Distributive Share or Premium
Refund to
the claimant(s), at the mailing address provided. The form HUD-2042 will
not be mailed
to the tracer due to widespread abuse of the program.
Claimant(s) signs and returns the form HUD-2042 along with proof of
ownership. (A copy
of the canceled original Deed of Trust Note. Quit Claim Deed or other
deeds is considered
proof of ownership and any supporting documentation showing entitlement
such as divorce
decree with property settlement and death certificate. (All documents
submitted must be properly
recorded and executed.) NOTE: HUD no longer accepts copies of recorded
instruments which
were obtained from public records as sole proof of ownership. Such copies
are readily available
to the general public and their possession does not prove that a
particular claimant was the owner
of the property when the FHA insured mortgage was paid in full.
Only claimant(s) who were the owner(s) of record of the mortgaged
property at the time the
FHA-insured mortgage was paid in full or the legal heir may be entitled
to a premium refund or
distributive share. All claimants(s) shown on the proof of ownership must
sign form HUD-2042.
EP#3.
Upon receipt of a properly executed form HUD-2042 and acceptable proof of
ownership
HUD certifies the case for payment and provides advice to the Department
of the Treasury to
issue the check.
The check is made out to the claimant(s) and sent to the mailing address
provided on the form
HUD-2042. Addresses different from claimants shall be authorized only
upon submission of a
properly notarized specific power of attorney with the form MUD-2042.
HUD will only accept the power of attorney using the language in the
attached sample form.
Note: This power of attorney only authorizes the check to be sent to a
different address, The
check is not made payable to the tracer.
Allow 90 days from submission of the form MUD-2042 for payment processing
before making
an inquiry. Tracers must submit inquiries or payment status request in
writing, accompanied by a
release under the Privacy Act signed by the Claimant(s).
Chapter Thirteen:
The Tracer Found Case
As a tracer you will be requested to submit all claimant information to
HUD/FHA on a tracer
found case (TFC) form. This form may be reproduced locally. However, it
is important that it
be reproduced with the same information. Feel free to use the TFC form
supplied with this
publication.
TRACER FOUND CASE
DISTRIBUTIVE SHARE-MORTGAGE INSURANCE PREMIUM REFUND
THIRD PARTY TRACER INFORMATION
Tracer Name: ___________________________________________________
Address: ___________________________________________________
Street Apt. No.
_____________________________________________________________
City State Zip Code