---
kind: "section"
citation: "24 C.F.R. § 1005.611"
title: "24"
number: "1005.611"
heading: "HUD imposed penalties."
url: "https://uscodex.org/cfr/24/1005.611"
---

# §1005.611. HUD imposed penalties.

- (a) **Prohibited penalty pass through.** The Holder, Direct Guarantee Lender or Servicer shall not recover or attempt to recover from the Borrower any penalties HUD imposes upon the Holder, Direct Guarantee Lender or Servicer.
- (b) **Failure of Direct Guarantee Lender to timely remit Up-Front loan guarantee to HUD.**
  - (1) The Direct Guarantee Lender shall include a late fee if the Up-Front Loan Guarantee Fee is not remitted to HUD within 15 days of settlement.
  - (2) Failure to remit the Up-Front Loan Guarantee Fee, with a late fee where applicable, may result in HUD rejecting the endorsement or Claim case binder.
- (c) **Failure of Servicer to timely remit the monthly installment of the Annual Loan Guarantee Fee to HUD.**
  - (1) The Servicer shall include a late fee for each monthly installment of the Annual Loan Guarantee Fee remitted to HUD after the15th of each month.
  - (2) Failure to remit monthly installment of the Annual Loan Guarantee Fee to HUD, with late fee, may result in HUD rejecting the Claim case binder, where applicable.
- (d) **Failure of Servicer to adjust the amount of the Annual Loan Guarantee Fee.**
  - (1) When a Servicer fails to make the annual adjustment to the amount of the monthly installment of the Annual Loan Guarantee Fee in accordance with [§ 1005.607(b)](/cfr/24/1005.607.md?p=b), the Holder shall, in addition to reimbursing the Borrower as required in [§ 1005.609(c)](/cfr/24/1005.609.md?p=c), pay HUD a penalty for each month the Servicer collects an overpayment of the Annual Loan Guarantee Fee.
  - (2) The Servicer shall provide annual written notice, in the manner prescribed by [Section 184](/cfr/24/184.md) Program Guidance to the Borrower prior to the scheduled change in the monthly installment of the Annual Loan Guarantee Fee, with such advance notice as required by [12 CFR 1026.9](/cfr/12/1026.9.md), or other applicable Federal law.
- (e) **Failure to cease collection of the Annual Loan Guarantee Fee.** When a Servicer fails to cease collection of the monthly installment of the Annual Loan Guarantee Fee after the loan to value ratio reaches the threshold described in [§ 1005.609(d)](/cfr/24/1005.609.md?p=d), the Holder shall, in addition to reimbursing the Borrower as required in [§ 1005.609(d)](/cfr/24/1005.609.md?p=d), pay HUD a penalty for each month the Servicer collects an overpayment of the Annual Loan Guarantee Fee.
- (f) **Late fee and penalty amounts.** Late fees and penalty amounts under this section shall be prescribed by HUD in [Section 184](/cfr/24/184.md) Program Guidance.

## Notes

### Authority

Authority: 12 U.S.C. 1715z-13a; 15 U.S.C. 1639c; 42 U.S.C. 3535(d).

### Source

Source: 89 FR 20056, Mar. 20, 2024; 89 FR 22084, Mar. 29, 2024, unless otherwise noted.