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Mortgagees and lenders. 


Directive Number: 30.35 

(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
Secs.  203.650 through 203.664 of this title or in
Secs.  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 Secs.  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.
 
    (b) Continuing violation. Each day that a
        violation continues shall constitute a separate violation.
 
    (c) Amount of penalty. 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.
 
[61 FR 50215, Sept. 24, 1996, as amended at 63 FR 9742, Feb. 26,
1998]



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