[Note from Joe 7/17/08: If you read the discussion in the comments section below, you’ll see that Darlene was at one time offering her book for free. She is no longer doing so. Visit her at http://www.scmiprefunds.com/shop/ to purchase it.]
How I Learned about Mortgage Refund Processing
I first heard about mortgage refund processing by reading a job ad on Craigslist. Can you really make money as a refund tracer? By getting refunds for people who paid too much for their mortgage insurance? Hey, I’m a helping kinda gal, and if I could make some money by helping, well that would be just as cool as helping people without getting paid. Maybe cooler!
I wrote to the email address listed and received a reply with more information. The reply said that I could become a third party tracer and would have to pay for software, lists, and a manual, and to visit eaglesoftwareservices.com to learn more. Uh-oh. Of course, that’s not a “job” at all because real jobs don’t charge you to work. I felt a little deceived, but was intrigued enough to click the link.
It led me to a presell page that told me a little bit more, but was really just trying to sell me the software, which costs $39.95. The web site left out some important details, though, that were in the email:
These 5 programs will pay you $105 if you sign up with them. It's free and it takes all of 5 minutes. Let me show you how.
- It doesn’t say that I would need to buy lists of names and refunds for at least $20 per state.
- It doesn’t say that I would need to buy a manual of instructions to learn exactly how to get people their refunds and get paid.
How is Mortgage Refund Processing Supposed to Work?
I had no idea what mortgage refund processing was until starting on this path. So for those of you who are also wondering, here’s a quick introduction. If you take out a mortgage without a down payment, you are required to buy mortgage insurance so the lender still makes its money back in case of default. The insurance premiums are tacked on to your monthly mortgage payment. When the home is sold or refinanced, you may be eligible for a refund of some of your premiums if your loan was through HUD or FHA.
The problem is that people move and HUD/FHA loses track of them, so they don’t know they have a refund coming. That’s where tracers come in. Tracers (which is what I would be) find those people, let them know they have money coming, help them collect it, and keep part of the money as a fee.
So I contacted the guys at I’ve Tried That and became a Secret Agent. They bought the software, I downloaded it, and am here to report the full results to you.
- It’s not “software.” The product you get for $39.95 is actually something like an e-book designed to be user friendly, with buttons to click through. It’s like a help file. Here’s the definition of software: “The programs, programming languages, and data that direct the operations of a computer system.” Word processing programs and Internet browsers are examples of software. This e-book is not.
What’s in it? The ebook is basically about 4-6 pages long repeating everything that is already stated on the website with a few more procedures, a contract template, and a HUD application template. That’s it!
Here’s what the “software” tells you to do:
- buy hud lists (at a minimum of $20 per state)
- make contact with claimant (no instructions on how to do this, no letter samples)
- agree with claimant that you will be his or her tracer, sign contract (template of contract provided)
- process applications for contract (one template provided)
- get paid/collect your money (no instructions on how to do this)
The e-book does not mention how you can contact your client, but when you get to the end of the e-book, you get an offer to purchase the manual for only $24.99 in which all these instructions will be given to you. Hello! What was the $39.99 for? Junk. The manual is not even sold through eaglesoftwareservices. You must contact another company or send Eagle a money order so they can place the order for you. (Yeah, right. I’m all over that). The manual is available all over the ‘Net for free. If you want to see it, let me know in the comments and I’ll send you a link.
Not Just Eagle Software Services
Upon further research, I found that several other websites are offering the manual up front, such as americanrefundservices.com. They sell the manual for $49.95 and their “startup kit” for $16.95. Which I think is what eagle sold us—a start up kit. Other companies are selling the entire kit for $79.99.
In Search of a Cheaper Manual
On eBay I found two people selling manuals. For one, the bid starts at $2 and the other has a Buy-it-Now price of $14. Then I actually found the text of the manual online, but it is missing one valuable piece of information: how to get paid. I figured out that you have to somehow collect the money yourself, but I went to another website in which they talk about another method of getting paid by having the refund check sent directly to the tracer, but they are selling their info for $49.99. The manual is available for free at geocities.com/freeebooksus/hudbook.html. I downloaded the info and made it into a PDF file.
The Bottom Line
Can you make money as a mortgage refund processor? Maybe. It’s legal, but there are big hurdles you should know about:
- You will be competing with HUD-sponsored tracers who will do what you do for free.
- You will have to hide the source of the money from your potential client, or he’ll just go directly to HUD himself and get his money without you.
- Those owed refunds can do it without you—you’re not necessary.
- It only works if your client doesn’t know who owes him money.
- You will have to spend some money to get started. Maybe a lot of it.
As far as Eaglesoftwareservices goes, this is not a good buy, in my opinion. Everything in the e-book is already stated on their website, except that the sales page “forgets” to mention that you must buy the HUD lists and that you need a manual with the more detailed instructions. Plus, Eagle’s “software” is just another marketing strategy because when you get to end of the e-book they make you offers on other products you can purchase. Oh, and the e-book also comes with re-sell rights, which means that you can build your own website and resell this book yourself. I suspect that’s how Eagle came across it. They are just reselling the e-book because they don’t even have the manual themselves.
Eagle advertises “bonus material” that comes with your purchase. What a waste! It’s just another e-book showing you how to start your own mail order business. When you get to the end of this one, you get an offer to buy another e-book/software to teach you to make your very own software to sell ebooks. And you get more offers, more offers, more offers.
I believe there is money to be made here, but Eagle’s product is not worth buying. Money Wasted. Stay posted, though, because I am going to dig through the manual and try to make contact with clients and see what happens.
(this post will self-destruct in 15 seconds. No, really: it will!)