[Code of Federal Regulations]

[Title 24, Volume 2]

[Revised as of April 1, 2005]

From the U.S. Government Printing Office via GPO Access

[CITE: 24CFR203.23]



[Page 158-159]

 

                 TITLE 24--HOUSING AND URBAN DEVELOPMENT

 

 CHAPTER II--OFFICE OF ASSISTANT SECRETARY FOR HOUSING--FEDERAL HOUSING 

        COMMISSIONER, DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

 

PART 203_SINGLE FAMILY MORTGAGE INSURANCE--Table of Contents

 

     Subpart A_Eligibility Requirements and Underwriting Procedures

 

Sec.  203.23  Mortgagor's payments to include other charges.



    (a) The mortgage shall provide for such equal monthly payments by 

the mortgagor to the mortgagee as will amortize:

    (1) The ground rents, if any;

    (2) The estimated amount of all taxes;

    (3) Special assessments, if any;

    (4) Flood insurance premiums, if flood insurance is required by the 

Commissioner; and

    (5) Fire and other hazard insurance premiums, if any. The mortgage 

shall further provide that such payments shall be held by the mortgagee 

in a manner satisfactory to the Commissioner for the purpose of paying 

such ground rents, taxes, assessments, and insurance premiums before the 

same become delinquent, for the benefit and account of the mortgagor. 

The mortgage must also make provisions for adjustments in case the 

estimated amount of such taxes, assessments, and insurance premiums 

shall prove to be more, or less, than the actual amount thereof so paid 

by the mortgagor. Such payments shall be held in an escrow subject to 

Sec.  203.550.

    (b) The mortgagor shall not be required to pay premiums for fire or 

other hazard insurance which protects only the interests of the 

mortgagee, or for life or disability income insurance, or fees charged 

for obtaining information necessary for the payment of property taxes. 

The foregoing does not apply to charges made or penalties exacted by the 

taxing authority, except that a penalty assessed or interest charged by 

a taxing authority for failure to timely pay taxes or assessments shall 

not be charged by the mortgagee to the mortgagor if the mortgagee had 

sufficient funds in escrow for the account of the mortgagor to pay such 

taxes or assessments prior to the date on which penalty or interest 

charges are imposed.

    (c) Mortgages involving a principal obligation not in excess of 

$9,000 may contain a provision requiring the mortgagor to pay to the 

mortgagee an annual service charge at such rate as may be agreed upon 

between the mortgagee and the mortgagor, but in no case shall such 

service charge exceed one-half of



[[Page 159]]



one percent per annum. Any such service charge shall be payable in 

monthly installments on the principal then outstanding. The provisions 

of this paragraph shall not apply to mortgages endorsed for insurance 

pursuant to applications received by the Commissioner on or after July 

17, 1961.



[36 FR 24508, Dec. 22, 1971, as amended at 37 FR 25231, Nov. 29, 1972; 

41 FR 47934, Nov. 10, 1976; 59 FR 53901, Oct. 26, 1994]