A mortgage insurance policy is mandatory for anyone who finances their home purchase or refinances with a HUD/FHA loan.  The premium for this insurance policy is paid at closing and may cost up to 3% of the loan amount. This expense is usually folded into the loan—which explains why many homeowners have forgotten they have paid for this insurance premium.

If the homeowner pays the loan off early, sells the home or refinances with a conventional loan, the mortgage insurance is terminated. In most circumstances, the homeowner is entitled to a prorated refund of this insurance premium.

However, by the time HUD/FHA is notified that the insurance is to be terminated, the homeowner has moved.  There could be a lapse of many months before HUD/FHA notifies the home owner of their pending refund. But by then there is either no forwarding address on file, or the forwarding address has expired.  

Currently there are over 120,000 people with over $250,000,000 dollars in unclaimed FHA mortgage insurance refunds.