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Refunds Forgotten

You pay nothing unless she gets money for you.
Legal secretary Deborah Ludwig knows where $333 million is held by the government. She is looking for the people to whom that money belongs.
Her new business, Refunds Forgotten, traces people who bought homes with backing provided by the Federal Housing Administration or Department of Housing and Urban Development, then forgot they had money coming back when the homes were sold or mortgages paid off.
Over the terms of their mortgages, those people were paying 0.5 percent interest that the government socked away to cushion against the possibility it would have to foreclose. In cases where that need never materialized, the 0.5 percent piled up in a special HUD/FHA fund.
HUD has given up on the people Refunds Forgotten will try to track down. After two years in the government’s “location cycle,” their names go on a list available to the public. That is when Ludwig and other tracers go to work.
Phone books, criss-cross directories and other public records are the tools of the tracer’s trade.
Ludwig’s dba may give her access to credit records and other business sources to find people who moved away or made life changes that put them out of reach of their refunds.
If she can connect a former mortgagor to money, Ludwig will collect a fee in the 25 percent range. She gets her money from the person found, after the government pays off.
Ludwig says she discovered the idea in a magazine. The government says it has too many refunds to give back and too few people to do the work, so it makes only a basic effort to get to those not in easy reach.
When a house is paid off or sold, HUD sends notices, or one-time refund checks or letters to the last known address. But by the time the government moves, the intended recipients often have moved on, and the money never catches up.
Ludwig has little more than that last known address to start with, on a list of hundreds of names in New York alone.
“I’m just going to start looking and see what happens,” said Ludwig, who works full time as a legal secretary in Rochester. She expects to have new business, she added, as long as people keep borrowing for homes with government backing.


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