[Code of Federal Regulations]

[Title 24, Volume 1]

[Revised as of April 1, 2006]

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

[CITE: 24CFR30.35]



[Page 309]

 

                 TITLE 24--HOUSING AND URBAN DEVELOPMENT

 

PART 30_CIVIL MONEY PENALTIES: CERTAIN PROHIBITED CONDUCT--Table of 

Contents

 

                          Subpart B_Violations

 

Sec.  30.35  Mortgagees and lenders.



    (a) General. The Mortgagee Review Board may initiate a civil money 

penalty action against any mortgagee or lender who knowingly and 

materially:

    (1) Violates the provisions listed in 12 U.S.C. 1735f-14(b);

    (2) Fails to comply with the requirements of Sec.  201.27(a) of this 

title regarding approval and supervision of dealers;

    (3) Approves a dealer that has been suspended, debarred, or 

otherwise denied participation in HUD's programs;

    (4) Makes a payment that is prohibited under Sec.  202.5(l).

    (5) Fails to remit, or timely remit, mortgage insurance premiums, 

loan insurance charges, or late charges or interest penalties;

    (6) Permits loan documents for an FHA insured loan to be signed in 

blank by its agents or any other party to the loan transaction unless 

expressly approved by the Secretary;

    (7) Fails to follow the mortgage assignment procedures set forth in 

Sec. Sec.  203.650 through 203.664 of this title or in Sec. Sec.  

207.255 through 207.258b of this title.

    (8) Fails to timely submit documents that are complete and accurate 

in connection with a conveyance of property or a claim for insurance 

benefits, in accordance with Sec. Sec.  203.365, 203.366, or 203.368 of 

this title;

    (9) Fails to:

    (i) Process requests for formal release of liability under an FHA 

insured mortgage;

    (ii) Obtain a credit report, issued not more than 90 days prior to 

approval of a person as a borrower, as to the person's creditworthiness 

to assume an FHA insured mortgage;

    (iii) Timely submit proper notification of a change in mortgagor or 

mortgagee as required by Sec.  203.431 of this title;

    (iv) Timely submit proper notification of mortgage insurance 

termination as required by Sec.  203.318 of this title;

    (v) Timely submit proper notification of a change in mortgage 

servicing as required by Sec.  203.502 of this title; or

    (vi) Report all delinquent mortgages to HUD, as required by Sec.  

203.332 of this title;

    (10) Fails to service FHA insured mortgages, in accordance with the 

requirements of 24 CFR parts 201, 203, and 235;

    (11) Fails to fund loans that it originated, or otherwise misuses 

loan proceeds;

    (12) Fails to comply with the conditions relating to the assignment 

or pledge of mortgages;

    (13) Fails to comply with the provisions of the Real Estate 

Settlement Procedures Act (12 U.S.C. 2601 et seq.), the Equal Credit 

Opportunity Act (15 U.S.C. 1691 et seq.), or the Fair Housing Act (42 

U.S.C. 3601 et seq.);

    (14) Fails to comply with the terms of a settlement agreement with 

HUD.

    (15) Fails to engage in loss mitigation as provided in Sec.  203.605 

of this title.

    (b) Continuing violation. Each day that a violation continues shall 

constitute a separate violation.

    (c) Amount of penalty--(1) Maximum penalty. Except as provided in 

paragraph (c)(2) of this section, the maximum penalty is $6,500 for each 

violation, up to a limit of $1,250,000 for all violations committed 

during any one-year period. Each violation shall constitute a separate 

violation as to each mortgage or loan application.

    (2) Maximum penalty for failing to engage in loss mitigation. The 

penalty for a violation of paragraph (a)(15) of this section shall be 

three times the amount of the total mortgage insurance benefits claimed 

by the mortgagee with respect to any mortgage for which the mortgagee 

failed to engage in such loss mitigation actions.



[61 FR 50215, Sept. 24, 1996, as amended at 63 FR 9742, Feb. 26, 1998; 

68 FR 12788, Mar. 17, 2003; 70 FR 21578, Apr. 26, 2005]



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