cfr_sections
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44 rows where part_number = 201 and title_number = 24 sorted by section_id
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| section_id ▼ | title_number | title_name | chapter | subchapter | part_number | part_name | subpart | subpart_name | section_number | section_heading | agency | authority | source_citation | amendment_citations | full_text |
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| 24:24:2.1.1.2.2.1.37.1 | 24 | Housing and Urban Development | II | B | 201 | PART 201—TITLE I PROPERTY IMPROVEMENT AND MANUFACTURED HOME LOANS | A | Subpart A—General | § 201.1 Purpose. | HUD | [50 FR 43523, Oct. 25, 1985, as amended at 61 FR 19795, May 2, 1996] | These regulations implement the provisions of section 2 of title I of the National Housing Act (12 U.S.C. 1703). They contain the requirements under which an approved financial institution may obtain insurance on loans made for the alteration, repair or improvement of property, for the purchase of a manufactured home and/or the lot on which to place such home, for the purchase and installation of fire safety equipment in existing health care facilities, and for the preservation of historic structures. The insurance granted by the Secretary of Housing and Urban Development shall be available only for loans involving property located within a State, as that term is defined in § 201.2. The insurance can cover up to 10 percent of the amount of all insured Title I loans in the financial institution's portfolio, as reflected in the total amount of insurance coverage contained at any time in an insurance coverage reserve account established by the Secretary, less amounts for insurance claims paid. As limited by the amount of insurance coverage in such a reserve account, the insurance can cover up to 90 percent of the loss of any individual loan. | |||
| 24:24:2.1.1.2.2.1.37.2 | 24 | Housing and Urban Development | II | B | 201 | PART 201—TITLE I PROPERTY IMPROVEMENT AND MANUFACTURED HOME LOANS | A | Subpart A—General | § 201.2 Definitions. | HUD | [50 FR 43523, Oct. 25, 1985, as amended at 54 FR 36263, Aug. 31, 1989; 56 FR 52428, Oct. 18, 1991; 57 FR 6480, Feb. 25, 1992; 57 FR 45246, Sept. 30, 1992; 60 FR 13836, Mar. 14, 1995; 61 FR 5206, Feb. 9, 1996; 61 FR 19795, May 2, 1996; 66 FR 56419, Nov. 7, 2001; 77 FR 51468, Aug. 24, 2012; 89 FR 14587, Feb. 28, 2024] | As used in the regulations in this part the term: Act means the National Housing Act, 12 U.S.C. 1703. Actuarial method means the method of allocating payments made on a loan between the outstanding balance of the principal amount borrowed and the interest due on a loan obligation, under which a payment is applied first to the accrued interest, and any remainder is subtracted from, or any deficiency is added to, the unpaid balance of the obligation. Borrower means one who applies for and receives a loan insured under this part. The term may also include any co-maker or co-signer or any assumptor who is obligated for the repayment of a loan obligation insured under this part. Combination loan means a loan made for the purchase or refinancing in a single transaction of a manufactured home and a manufactured home lot, and may also include a garage, patio, carport, or other comparable appurtenance. Dealer means, in the case of property improvement loans, a seller, contractor, or supplier of goods or services. In the case of manufactured home loans, dealer means one who engages in the business of manufactured home retail sales. Dealer loan means a loan where a dealer, having a direct or indirect financial interest in the transaction between the borrower and the lender, assists the borrower in preparing the credit application or otherwise assists the borrower in obtaining the loan from the lender. In the case of a property improvement loan, the lender may disburse the loan proceeds solely to the borrower, or jointly to the borrower and the dealer or other parties to the transaction. In the case of a manufactured home loan, the lender may disburse the loan proceeds solely to the dealer or the borrower, or jointly to the borrower and the dealer or other parties to the transaction. Debtor means the borrower, any co-maker or co-signer, and any assumptor who is liable for the repayment of a defaulted loan obligation insured under this part. Default means a failure by the borrower to make any payment due und… | |||
| 24:24:2.1.1.2.2.1.37.3 | 24 | Housing and Urban Development | II | B | 201 | PART 201—TITLE I PROPERTY IMPROVEMENT AND MANUFACTURED HOME LOANS | A | Subpart A—General | § 201.3 Applicability of the regulations. | HUD | [61 FR 19796, May 2, 1996] | The regulations in this part may be amended by the Secretary at any time. Such amendment shall not adversely affect the insurance privileges of a lender on any loan that has been made or for which a loan application has been approved before the effective date of the amendment. | |||
| 24:24:2.1.1.2.2.1.37.4 | 24 | Housing and Urban Development | II | B | 201 | PART 201—TITLE I PROPERTY IMPROVEMENT AND MANUFACTURED HOME LOANS | A | Subpart A—General | § 201.4 Rules of construction. | HUD | [56 FR 52429, Oct. 18, 1991] | As used in this part, and unless the context indicates otherwise, words in the singular include the plural, and words in the plural include the singular. | |||
| 24:24:2.1.1.2.2.1.37.5 | 24 | Housing and Urban Development | II | B | 201 | PART 201—TITLE I PROPERTY IMPROVEMENT AND MANUFACTURED HOME LOANS | A | Subpart A—General | § 201.5 Waivers. | HUD | [56 FR 52429, Oct. 18, 1991, as amended at 61 FR 5206, Feb. 9, 1996] | Waiver of lender's noncompliance. The Secretary may waive a lender's noncompliance with any provision of this part, subject to statutory limitations, when it is determined that enforcement of the regulations would impose an injustice upon a lender which has substantially complied with the regulations in good faith and refunded or credited any excess charge made, and when such waiver does not involve an increase in the Secretary's obligation beyond that which would have been involved if the lender was in full compliance with the regulations. | |||
| 24:24:2.1.1.2.2.1.37.6 | 24 | Housing and Urban Development | II | B | 201 | PART 201—TITLE I PROPERTY IMPROVEMENT AND MANUFACTURED HOME LOANS | A | Subpart A—General | § 201.6 Disclosure and verification of Social Security and Employer Identification Numbers. | HUD | [54 FR 39692, Sept. 27, 1989, as amended at 55 FR 420, Jan. 5, 1990] | To be eligible for loan insurance under this part, the borrower must meet the requirements for the disclosure and verification of Social Security and Employer Identification Numbers, as provided by part 200, subpart U, of this chapter. | |||
| 24:24:2.1.1.2.2.1.37.7 | 24 | Housing and Urban Development | II | B | 201 | PART 201—TITLE I PROPERTY IMPROVEMENT AND MANUFACTURED HOME LOANS | A | Subpart A—General | § 201.7 Qualified mortgage. | HUD | [78 FR 75237, Dec. 11, 2013] | (a) Qualified mortgage. A mortgage insured under section 2 of title I of the National Housing Act (12 U.S.C. 1703), except for mortgage transactions exempted under § 203.19(c)(2), is a safe harbor qualified mortgage that meets the ability to repay requirements in 15 U.S.C. 1639c(a). (b) Effect of indemnification on qualified mortgage status. An indemnification demand or resolution of a demand that relates to whether the loan satisfied relevant eligibility and underwriting requirements at the time of consummation may result from facts that could allow a change to qualified mortgage status, but the existence of an indemnification does not per se remove qualified mortgage status. | |||
| 24:24:2.1.1.2.2.2.37.1 | 24 | Housing and Urban Development | II | B | 201 | PART 201—TITLE I PROPERTY IMPROVEMENT AND MANUFACTURED HOME LOANS | B | Subpart B—Loan and Note Provisions | § 201.10 Loan amounts. | HUD | [50 FR 43523, Oct. 25, 1985, as amended at 52 FR 33406, Sept. 3, 1987; 53 FR 8880, Mar. 18, 1988; 54 FR 10537, Mar. 14, 1989; 54 FR 36264, Aug. 31, 1989; 56 FR 52429, Oct. 18, 1991; 57 FR 45246, Sept. 30, 1992; 58 FR 41001, July 30, 1993; 59 FR 9084, Feb. 25, 1994; 61 FR 19796, May 2, 1996; 62 FR 20082, Apr. 24, 1997; 89 FR 14587, Feb. 28, 2024; 89 FR 26105, Apr. 15, 2024] | (a) Property improvement loans. (1) The total principal obligation for a property improvement loan shall not exceed the actual cost of the project plus any applicable fees and charges authorized at § 201.25(b), up to the following maximum loan amounts: (i) Single family property improvement loans—$25,000, except that a loan for a manufactured home that qualifies as real property shall be limited to $17,500. (ii) Multifamily property improvement loans—$60,000 or an average of $12,000 per dwelling unit, whichever is less. (iii) Nonresidential property improvement loans—$25,000. (iv) Manufactured home improvement loans—$7,500. (v) Historic preservation loans—the lesser of $15,000 per dwelling unit in a residential structure or $45,000 per residential structure. (vi) Fire safety equipment loans—$50,000. (2) No property improvement loan shall be approved where the total outstanding balance of all title I property improvement loans on the same property exceeds the maximum loan amount prescribed for that type of loan. If more than one type of property improvement loan is involved, the total outstanding balance of such loans on a particular property shall not exceed the maximum loan amount prescribed for the larger type of loan. (b) Manufactured home purchase loans. (1) The total principal obligation for a loan to purchase a new manufactured home shall not exceed the sum of the following itemized amounts, up to a maximum set according to an index established by HUD in paragraph (h)(1) of this section and updated through notice which shall establish separate loan limits for single-section homes and multi-section homes: (i) 130 percent of the sum of the wholesale (base) prices of the home and any itemized options and the charge for freight, as detailed in the manufacturer's invoice; (ii) The charge for any sales taxes to be paid by the dealer, as detailed in the manufacturer's invoice; (iii) The actual dealer's cost of transportation to the homesite, set-up and anchoring, including the rental of wheels and a… | |||
| 24:24:2.1.1.2.2.2.37.10 | 24 | Housing and Urban Development | II | B | 201 | PART 201—TITLE I PROPERTY IMPROVEMENT AND MANUFACTURED HOME LOANS | B | Subpart B—Loan and Note Provisions | § 201.19 Refinanced and assumed loans. | HUD | [52 FR 33406, Sept. 3, 1987, as amended at 56 FR 52430, Oct. 18, 1991] | (a) Conditions on refinancing. (1) An existing insured property improvement loan or manufactured home loan may be refinanced without an advance of funds only under the following conditions: (i) A loan that is in default may not be refinanced for an amount greater than the original principal balance of the loan; (ii) The refinancing of a loan for the original borrower shall be subject to all of the requirements of this part, except §§ 201.20(b) and (c), 201.21(b) through (e), 201.22, 201.23, and 201.26; (iii) If there are co-makers or co-signers on the original note, the lender shall require the same co-makers or co-signers on the refinanced note, unless the lender obtains the Secretary's approval to release a co-maker or co-signer from liability under the note in accordance with § 201.24(e); and (iv) A loan that was assumed in accordance with paragraph (c) of this section may be refinanced, subject to all of the requirements of this part except §§ 201.20(b) and (c), 201.21(b) through (e), 201.22, 201.23, and 201.26, as long as the original borrower and any intervening assumptors were released from liability for repayment of the loan at the time the loan was assumed. A lender may not refinance a previously assumed loan under any other circumstances, unless the requirements of § 201.22 are also met and the Secretary has approved a release of the original borrower and any intervening assumptors in accordance with § 201.24(e). (2) An existing insured property improvement loan may be refinanced with an advance of funds for additional improvements only under the following conditions: (i) The existing insured loan must not be in default; and (ii) The refinancing shall be subject to all of the requirements of this part applicable to the particular type of loan and to the additional improvements being financed. (3) An existing uninsured manufactured home loan may be refinanced only for the original borrower and only under the following conditions: (i) The existing uninsured loan must not be in default; (ii) Re… | |||
| 24:24:2.1.1.2.2.2.37.2 | 24 | Housing and Urban Development | II | B | 201 | PART 201—TITLE I PROPERTY IMPROVEMENT AND MANUFACTURED HOME LOANS | B | Subpart B—Loan and Note Provisions | § 201.11 Loan maturities. | HUD | [50 FR 43523, Oct. 25, 1985, as amended at 52 FR 33406, Sept. 3, 1987; 54 FR 10537, Mar. 14, 1989; 56 FR 52430, Oct. 18, 1991; 57 FR 45246, Sept. 30, 1992; 61 FR 19796, May 2, 1996] | (a) Property improvement loans. The term of a property improvement loan shall be not less than six months and not more than 20 years and 32 days from the date of the loan, except that: (1) The maximum term for a single family property improvement loan on a manufactured home that qualifies as real property shall not exceed 15 years and 32 days from the date of the loan; (2) The maximum term for a manufactured home improvement loan shall not exceed 12 years and 32 days from the date of the loan; and (3) The maximum term for an historic preservation loan shall not exceed 15 years and 32 days from the date of the loan. (b) Manufactured home loans. The term of a manufactured home loan shall be not less than six months and not more than 20 years and 32 days from the date of the loan, except that: (1) The maximum term for a manufactured home lot loan shall not exceed 15 years and 32 days from the date of the loan; and (2) The maximum term for a multi-module manufactured home and lot in combination shall not exceed 25 years and 32 days from the date of the loan. (c) Loan refinancing. A loan to be refinanced under this part may be refinanced for an extended period. (1) The term of a loan to refinance a borrower's existing insured property improvement or manufactured home loan shall not exceed the maximum term permitted under paragraph (a) or (b) of this section for the particular type of loan. In addition, the total time period from the date of the original loan to the final maturity of the refinanced loan shall not exceed: (i) In the case of a property improvement loan, the maximum term permitted under paragraph (a) of this section plus 9 years and 11 months; and (ii) In the case of manufactured home loan, the maximum term permitted under paragraph (b) of this section plus 4 years and 11 months. (2) The term of a loan made to refinance a borrower's existing uninsured manufactured home loan shall not exceed the maximum term permitted under paragraph (b) of this section for the particular type of loan. (3… | |||
| 24:24:2.1.1.2.2.2.37.3 | 24 | Housing and Urban Development | II | B | 201 | PART 201—TITLE I PROPERTY IMPROVEMENT AND MANUFACTURED HOME LOANS | B | Subpart B—Loan and Note Provisions | § 201.12 Requirements for the note. | HUD | [61 FR 19797, May 2, 1996] | The note shall bear the genuine signature of each borrower and of any co-maker or co-signer, be valid and enforceable against the borrower and any co-maker or co-signer, and be complete and regular on its face. The borrower and any co-maker or co-signer shall execute the note for the full amount of the loan obligation. Although the note may be executed by the borrower on an earlier date, the date of the loan shall be the date that the loan proceeds are disbursed by the lender. Such date shall be entered on the note when disbursement occurs. The note shall separately recite the principal amount and any interest at an agreed annual rate that comprises the borrower's payment obligation. The lender shall assure that the note and all other documents evidencing the loan transaction are in compliance with applicable Federal, State, and local laws. If the note is executed on behalf of a corporation, partnership, or trust by an authorized representative, it shall create a binding obligation on such entity. | |||
| 24:24:2.1.1.2.2.2.37.4 | 24 | Housing and Urban Development | II | B | 201 | PART 201—TITLE I PROPERTY IMPROVEMENT AND MANUFACTURED HOME LOANS | B | Subpart B—Loan and Note Provisions | § 201.13 Interest and discount points. | HUD | [61 FR 19797, May 2, 1996] | The interest rate for any loan shall be negotiated and agreed to by the borrower and the lender, and such interest rate shall be fixed for the full term of the loan and recited in the note. Interest on the loan shall accrue from the date of the loan, and shall be calculated on a simple interest basis. The lender and the borrower may negotiate the amount of discount points, if any, to be paid by the borrower as part of the borrower's initial payment. The lender shall not require or allow any party other than the borrower to pay any discount points or other financing charges in connection with the loan transaction. | |||
| 24:24:2.1.1.2.2.2.37.5 | 24 | Housing and Urban Development | II | B | 201 | PART 201—TITLE I PROPERTY IMPROVEMENT AND MANUFACTURED HOME LOANS | B | Subpart B—Loan and Note Provisions | § 201.14 Payments on the loan. | HUD | The note normally shall provide for equal installment payments due weekly, biweekly, semi-monthly or monthly. The note may provide for either or both of the first and final payments to vary in amount but not to exceed 1 1/2 times the regular installment. Where the borrower has an irregular flow of income, the note may be payable at quarterly or semi-annual intervals corresponding with the borrower's flow of income. The first scheduled payment after the borrower's initial payment shall be due no later than two months from the date of the loan. Multiple payment schedules may not be used in connection with any loan. | ||||
| 24:24:2.1.1.2.2.2.37.6 | 24 | Housing and Urban Development | II | B | 201 | PART 201—TITLE I PROPERTY IMPROVEMENT AND MANUFACTURED HOME LOANS | B | Subpart B—Loan and Note Provisions | § 201.15 Late charges to borrowers. | HUD | [54 FR 36264, Aug. 31, 1989] | (a) Imposition of late charge. The note may provide for imposition of a late charge unless precluded by State law. The late charge may be imposed only for installments of principal and interest which are in arrears for the greater of 15 calendar days or the number of days required by applicable State law before such a charge may be imposed. Late charges must be billed to the borrower or reflected in the payment coupon, and evidence of any late charges that have been paid must be in the loan file if an insurance claim is made. (b) Amount of late charge. The late charge shall not exceed the lesser of five percent of each installment of principal and interest, up to a maximum of $10 per installment for any property improvement loan and $15 per installment for any manufactured home loan, or the maximum amount permitted by applicable State law. (c) Method of payment. Payment of any late charge cannot be deducted from the monthly payment for principal and interest, but must be an additional charge to the borrower. (d) Daily interest in lieu of late charges. In lieu of late charges, the note may provide for interest to accrue on installments in arrears on a daily basis at the interest rate in the note. | |||
| 24:24:2.1.1.2.2.2.37.7 | 24 | Housing and Urban Development | II | B | 201 | PART 201—TITLE I PROPERTY IMPROVEMENT AND MANUFACTURED HOME LOANS | B | Subpart B—Loan and Note Provisions | § 201.16 Default provision. | HUD | The loan note shall contain a provision for acceleration of maturity, at the option of the holder, upon a default by the borrower. | ||||
| 24:24:2.1.1.2.2.2.37.8 | 24 | Housing and Urban Development | II | B | 201 | PART 201—TITLE I PROPERTY IMPROVEMENT AND MANUFACTURED HOME LOANS | B | Subpart B—Loan and Note Provisions | § 201.17 Prepayment provision. | HUD | [61 FR 19797, May 2, 1996] | The note shall contain a provision permitting full or partial prepayment of the loan without penalty, except that the borrower may be assessed reasonable and customary charges for recording a release of the lender's security interest in the property, if permitted by State law. | |||
| 24:24:2.1.1.2.2.2.37.9 | 24 | Housing and Urban Development | II | B | 201 | PART 201—TITLE I PROPERTY IMPROVEMENT AND MANUFACTURED HOME LOANS | B | Subpart B—Loan and Note Provisions | § 201.18 Modification agreement or repayment plan. | HUD | [52 FR 33406, Sept. 3, 1987, as amended at 54 FR 10537, Mar. 14, 1989] | (a) Modification agreement or repayment plan. A written but unrecorded modification agreement acceptable to the lender and executed by the borrower may be used in lieu of refinancing of a delinquent or defaulted loan to reduce or increase the monthly payment, but not to increase the term or the interest rate, so as to assure that the delinquent or defaulted loan is brought current before or by the end of the loan term. A modification agreement may also be used in lieu of refinancing in connection with a loan that is current to effect a reduction in the interest rate, and in the monthly payment, for the remainder of the loan term. When a modification agreement is used, no insurance reporting is required under § 201.30. (b) Repayment plan. The lender may elect to negotiate an informal repayment plan with the borrower to enable a temporary delinquency to be cured within a short period of time. The lender may document the terms of the repayment plan by sending a letter to the borrower reciting the terms of their agreement. When a repayment plan is used, no insurance reporting is required under § 201.30. | |||
| 24:24:2.1.1.2.2.3.37.1 | 24 | Housing and Urban Development | II | B | 201 | PART 201—TITLE I PROPERTY IMPROVEMENT AND MANUFACTURED HOME LOANS | C | Subpart C—Eligibility and Disbursement Requirements | § 201.20 Property improvement loan eligibility. | HUD | [50 FR 43523, Oct. 25, 1985, as amended at 56 FR 52430, Oct. 18, 1991; 61 FR 19797, May 2, 1996; 62 FR 65181, Dec. 10, 1997] | (a) Borrower eligibility. (1) To be eligible for a property improvement loan (other than a manufactured home improvement loan), the borrower shall have at least a one-half interest in one of the following: (i) Fee simple title to the real property; (ii) Lease of the real property for a fixed term which expires not less than six calendar months after the final maturity of the loan; or (iii) A properly recorded land installment contract for the purchase of the real property. (2) To be eligible for a manufactured home improvement loan, the borrower shall have at least a one-half interest in the manufactured home, and the home must be the principal residence of the borrower. (b) Eligible use of the loan proceeds. (1) The loan proceeds shall be used only for the purposes disclosed in the loan application. If the borrower plans to use a dealer or contractor to carry out the improvement work, the lender shall obtain a copy of a proposal or contract that describes in detail the work to be performed and the estimated or actual cost. If the borrower plans to carry out the improvement work without the services of a dealer or contractor, the borrower shall be required to furnish a detailed written description of the work to be performed, the materials to be furnished, and their estimated cost. (2) The loan proceeds shall be used only to finance property improvements that substantially protect or improve the basic livability or utility of the property. The Secretary will establish a list of items and activities that may not be financed with the proceeds of any property improvement loan. If a lender has any doubt as to the eligibility of any item or activity, it shall request a specific ruling by the Secretary before making a loan. (3) The loan proceeds shall only be used to finance property improvements that are started after loan approval, unless: (i) The prior approval of the Secretary is obtained for an exception to this requirement; or (ii) The property is located in a major disaster area declared by the Pres… | |||
| 24:24:2.1.1.2.2.3.37.10 | 24 | Housing and Urban Development | II | B | 201 | PART 201—TITLE I PROPERTY IMPROVEMENT AND MANUFACTURED HOME LOANS | C | Subpart C—Eligibility and Disbursement Requirements | § 201.29 Ineligible participants. | HUD | No loan may be insured under this part where the lender has been advised in writing by HUD or otherwise knows that any participant in the transaction as a dealer, home manufacturer, contractor, supplier, or broker, or as its agent or representative, has been suspended or debarred, or has otherwise been determined by HUD to be ineligible to participate in the title I program. | ||||
| 24:24:2.1.1.2.2.3.37.2 | 24 | Housing and Urban Development | II | B | 201 | PART 201—TITLE I PROPERTY IMPROVEMENT AND MANUFACTURED HOME LOANS | C | Subpart C—Eligibility and Disbursement Requirements | § 201.21 Manufactured home loan eligibility. | HUD | [50 FR 43523, Oct. 25, 1985; 51 FR 1496, Jan. 14, 1986, as amended at 54 FR 36264, Aug. 31, 1989; 56 FR 52431, Oct. 18, 1991; 61 FR 19797, May 2, 1996] | (a) Borrower eligibility. To be eligible for a manufactured home loan (whether a manufactured home purchase loan, a manufactured home lot loan, or a combination loan), the borrower must become the owner of the particular property which is to be financed with such a loan. Where the loan involves a manufactured home which is classified as realty, ownership of the home must be in fee simple. Where the loan involves a manufactured home lot, ownership of the lot must be in fee simple, except where the lot consists of a share in a cooperative association which owns and operates a manufactured home park. (b) Eligible use of loan proceeds. (1) The loan proceeds may be used for the purchase or refinancing of a manufactured home, a suitably developed lot on which to place a manufactured home already owned by the borrower, or a manufactured home and a suitably developed lot for the home in combination. The loan proceeds may also be used to refinance an existing manufactured home already owned by the borrower in connection with the purchase of a manufactured home lot, or to refinance a lot already owned by the borrower in connection with the purchase of a manufactured home. Where the proceeds are for a manufactured home purchase loan or combination loan, the home must be the borrower's principal residence. Where the proceeds are for a manufactured home lot loan, the borrower's manufactured home must be placed on the lot and occupied as the borrower's principal residence within six months after the date of the loan. (2) A manufactured home financed with an insured loan under this part may be either: (i) A new home, which is one that is purchased by the borrower within 18 months after the date of manufacture and has not been previously occupied; or (ii) An existing home, which is one that does not meet the criteria for a new home. In order to be eligible for financing with an insured loan under this part, the manufactured home, its warranty and the site on which the home is placed must meet the requirements of paragrap… | |||
| 24:24:2.1.1.2.2.3.37.3 | 24 | Housing and Urban Development | II | B | 201 | PART 201—TITLE I PROPERTY IMPROVEMENT AND MANUFACTURED HOME LOANS | C | Subpart C—Eligibility and Disbursement Requirements | § 201.22 Credit requirements for borrowers. | HUD | [50 FR 43523, Oct. 25, 1985, as amended at 51 FR 32060, Sept. 9, 1986; 54 FR 10537, Mar. 14, 1989; 56 FR 52431, Oct. 18, 1991; 57 FR 6480, Feb. 25, 1992; 61 FR 19797, May 2, 1996] | (a) Credit application and review. (1) Before making a loan insured under this part, the lender shall exercise prudence and diligence to determine whether the borrower and any co-maker or co-signer is solvent and an acceptable credit risk, with a reasonable ability to make payments on the loan obligation. All documentation supporting this determination and relating to the lender's review of the credit of the borrower and of any co-maker or co-signer shall be retained in the loan file. (2) The lender shall obtain a separate dated credit application on a HUD-approved form, executed by the borrower and any co-maker or co-signer under applicable criminal and civil penalties for fraud and misrepresentation, for each loan made. The lender shall verify that the borrower's Social Security Number is valid, through such documentation as may be prescribed by the Secretary. (3) The lender shall conduct a credit investigation based on the credit application, and shall obtain written verification of or otherwise document the current employment and current income of the borrower and any co-maker or co-signer. If the borrower or any co-maker or co-signer has changed employment within the past two years, the lender shall obtain written verification of or otherwise document the person's prior employment and prior income during the two-year period. If the borrower or any co-maker or co-signer was self-employed during any period of the previous two years, the lender shall obtain documentation of the person's income during such period of self-employment. (4) The lender shall also determine the total amount of the borrower's existing and proposed title I loans to ensure that the loan amounts in § 201.10 are not exceeded. (5) As part of its credit investigation, the lender shall obtain a consumer credit report stating the credit accounts and payment history of the borrower and of any co-maker or co-signer. Subject to state or local law, the lender shall check with the inquirers concerning all credit inquiries reported within the … | |||
| 24:24:2.1.1.2.2.3.37.4 | 24 | Housing and Urban Development | II | B | 201 | PART 201—TITLE I PROPERTY IMPROVEMENT AND MANUFACTURED HOME LOANS | C | Subpart C—Eligibility and Disbursement Requirements | § 201.23 Borrower's initial payment. | HUD | [61 FR 19798, May 2, 1996] | (a) General requirement. The borrower shall be responsible for the payment in cash of any costs that will not be paid, or are not eligible to be paid, from the proceeds of the loan. Such costs payable by the borrower may include any required downpayment, any discount points to be paid by the borrower to the lender, any other fees and charges that may not be financed, and any other costs in excess of the loan amount. No part of such costs payable by the borrower may be loaned, advanced, or paid to or for the benefit of the borrower by the dealer, the manufacturer, or any other party to the loan transaction. If the borrower obtains all or any part of such costs through a gift or a loan from some other source, the borrower must disclose the source of such gift or loan on the credit application. Any such loan must be secured by property or collateral owned by the borrower independently of the property securing repayment of the Title I loan, unless the prior approval of the Secretary is obtained for an exception to this requirement. The lender shall consider any such loan obligation in performing the credit investigation. Documentation of any initial payment shall be retained by the lender in the loan file. (b) Manufactured home purchase loans. In the case of a manufactured home purchase loan, the borrower shall make a minimum cash downpayment of at least five percent of the purchase price of the home. The borrower's equity in an existing manufactured home and any movable appurtenances may be traded-in on a new home and accepted in lieu of full or partial cash downpayment, but without any cash payment to the borrower. The existing manufactured home being traded-in shall be clearly identified, and the borrower's equity in the home shall be based upon the retail value of the home and appurtenances (as determined by a HUD-approved appraisal), less the total of all loans outstanding on the home and appurtenances. (c) Manufactured home lot loans. In the case of a manufactured home lot loan, the borrower shall make … | |||
| 24:24:2.1.1.2.2.3.37.5 | 24 | Housing and Urban Development | II | B | 201 | PART 201—TITLE I PROPERTY IMPROVEMENT AND MANUFACTURED HOME LOANS | C | Subpart C—Eligibility and Disbursement Requirements | § 201.24 Security requirements. | HUD | [50 FR 43523, Oct. 25, 1985, as amended at 51 FR 32060, Sept. 9, 1986; 54 FR 36265, Aug. 31, 1989; 61 FR 19798, May 2, 1996; 66 FR 56419, Nov. 7, 2001] | (a) Property improvement loans —(1) Property improvement loans in excess of $7,500. (i) Any property improvement loan in excess of $7,500 shall be secured by a recorded lien on the improved property. The lien shall be evidenced by a mortgage or deed of trust, executed by the borrower and all other owners in fee simple. (ii) If the borrower is a lessee, the borrower and all owners in fee simple must execute the mortgage or deed of trust. If the borrower is purchasing the property under a land installment contract, the borrower, all owners in fee simple, and all intervening contract sellers must execute the mortgage or deed of trust. (iii) The lien need not be a first lien on the property; however, the lien securing the Title I loan must hold no less than the second lien position. This requirement shall not apply where the first and second mortgages were made at the same time or the second mortgage was provided by a state or local government agency in conjunction with a downpayment assistance program. (2) Property improvement loans of $7,500 or less. Any property improvement loan for $7,500 or less (other than a manufactured home improvement loan) shall be similarly secured if, including any such additional loans, the total amount of all Title I loans on the improved property is more than $7,500. (3) Manufactured home improvement loans. Manufactured home improvement loans need not be secured. (b) Manufactured home loans. Any manufactured home loan shall be secured by a recorded lien on the home (or lot or home and lot, as appropriate), its furnishings, equipment, accessories, and appurtenances. The lien shall be a first lien, superior to any other lien on that property, and shall be evidenced by a properly recorded financing statement, a properly recorded security instrument executed by the borrower and any other owner of the property, or another acceptable instrument, such as a certificate of title issued by the State and containing a recitation of the lender's lien interest in the manufactured home.… | |||
| 24:24:2.1.1.2.2.3.37.6 | 24 | Housing and Urban Development | II | B | 201 | PART 201—TITLE I PROPERTY IMPROVEMENT AND MANUFACTURED HOME LOANS | C | Subpart C—Eligibility and Disbursement Requirements | § 201.25 Charges to borrower to obtain loan. | HUD | [61 FR 19798, May 2, 1996] | (a) Fees and charges that may be financed in a property improvement loan. The Secretary will establish a list of fees and charges that may be included in a property improvement loan. Such fees and charges shall have been incurred in connection with the origination of the loan, and their inclusion shall not increase the total principal obligation beyond the maximum loan amounts in § 201.10. (b) Fees and charges that may be financed in a manufactured home loan. The Secretary will establish a list of fees and charges that may be included in a manufactured home loan. Such fees and charges shall have been incurred in connection with the origination of the loan, and their inclusion shall not increase the total principal obligation beyond the maximum loan amounts in § 201.10. (c) Fees and charges that may not be financed. The Secretary will establish a list of fees and charges incurred by the lender that may be collected from the borrower in the initial payment, but may not be included in the loan amount or otherwise financed or advanced by the dealer, the manufacturer, or any other party to the loan transaction. (d) Fees and charges that may not be paid. Neither the lender nor the borrower may pay a referral fee to any dealer, home manufacturer, contractor, supplier, real estate broker, loan broker, or any other party in connection with the origination of a loan insured under this part. | |||
| 24:24:2.1.1.2.2.3.37.7 | 24 | Housing and Urban Development | II | B | 201 | PART 201—TITLE I PROPERTY IMPROVEMENT AND MANUFACTURED HOME LOANS | C | Subpart C—Eligibility and Disbursement Requirements | § 201.26 Conditions for loan disbursement. | HUD | [50 FR 43523, Oct. 25, 1985, as amended at 51 FR 32060, Sept. 9, 1986; 54 FR 36265, Aug. 31, 1989; 56 FR 52432, Oct. 18, 1991, 57 FR 6480, Feb. 25, 1992; 61 FR 19798, May 2, 1996; 62 FR 65181, Dec. 10, 1997; 66 FR 56420, Nov. 7, 2001] | (a) Property improvement loans. The lender shall comply with the following applicable requirements before disbursing the proceeds of a property improvement loan. (1) The lender shall ensure that the following conditions are met: (i) The borrower is eligible for a property improvement loan in accordance with § 201.20(a) (1) or (2); and (ii) The interest of the borrower in the property is valid, through such title or other evidence as are generally acceptable to prudent lending institutions and leading attorneys in the community in which the property is situated. (2) The proposed use of the loan proceeds shall be documented in accordance with the requirements of § 201.20(b)(1). (3) Where the proceeds are to be used for an historic preservation loan, the lender shall ensure that the proposed improvements have been approved by the State Historic Preservation Officer in accordance with § 201.20(c). (4) Where the proceeds are to be used for a fire safety equipment loan, the lender shall ensure that the proposed improvements have been approved by the State or local agency having jurisdiction over the fire safety requirements of health care facilities in accordance with § 201.20(c). (5) In the case of a dealer loan, the lender shall obtain a completion certificate, on a HUD-approved form and signed by the borrower and the dealer under applicable criminal and civil penalties for fraud and misrepresentation, certifying that (i) the improvements are eligible and have been completed in general accordance with the contract or cost estimate furnished to the lender, and (ii) The borrower has not obtained the benefit of and will not receive any cash payment, rebate, cash bonus, sales commission, or anything of more than nominal value from the dealer as an inducement for the consummation of the transaction. (6) In the case of a dealer loan made on or after December 7, 2001, the lender may disburse the loan proceeds solely to the borrower, or jointly to the borrower and the dealer or other parties to the transaction. … | |||
| 24:24:2.1.1.2.2.3.37.8 | 24 | Housing and Urban Development | II | B | 201 | PART 201—TITLE I PROPERTY IMPROVEMENT AND MANUFACTURED HOME LOANS | C | Subpart C—Eligibility and Disbursement Requirements | § 201.27 Requirements for dealer loans. | HUD | [50 FR 43523, Oct. 25, 1985, as amended at 56 FR 52433, Oct. 18, 1991; 61 FR 19799, May 2, 1996; 66 FR 56420, Nov. 7, 2001] | (a) Dealer approval and supervision. (1) The lender shall approve only those dealers which, on the basis of experience and information, the lender considers to be reliable, financially responsible, and qualified to satisfactorily perform their contractual obligations to borrowers and to comply with the requirements of this part. However, in no case shall the lender approve a dealer that is unable to meet the following minimum qualifications: (i) Net worth. All property improvement and manufactured home dealers shall have and maintain a net worth of not less than $32,000 and $63,000, respectively. The required net worth must be maintained in assets acceptable to the Secretary. (ii) Business experience. All property improvement loan and manufactured home dealers must have demonstrated business experience as a property improvement contractor or supplier, or in manufactured home retail sales, as applicable. (2) The lender's approval of a dealer shall be documented on a HUD-approved form, signed and dated by the dealer and the lender under applicable criminal and civil penalties for fraud and misrepresentation, and containing information supplied by the dealer on its trade name, places of business, type of ownership, type of business, and names and employment history of the owners, principals, officers, and salespersons. The dealer shall furnish a current financial statement prepared by someone who is independent of the dealer and is qualified by education and experience to prepare such statements, together with such other documentation as the lender deems necessary to support its approval of the dealer. The lender shall obtain a commercial credit report on the dealer and consumer credit reports on the owners, principals, and officers of the dealership. (3) The lender shall require each dealer to apply annually for reapproval. The dealer shall furnish the same documentation as is required under paragraph (a)(2) of this section to support its application for reapproval. In no case shall the lender reapprove a… | |||
| 24:24:2.1.1.2.2.3.37.9 | 24 | Housing and Urban Development | II | B | 201 | PART 201—TITLE I PROPERTY IMPROVEMENT AND MANUFACTURED HOME LOANS | C | Subpart C—Eligibility and Disbursement Requirements | § 201.28 Flood and hazard insurance, and Coastal Barriers properties. | HUD | [50 FR 43523, Oct. 25, 1985, as amended at 51 FR 32060, Sept. 9, 1986; 53 FR 10537, Mar. 14, 1989; 54 FR 36265, Aug. 31, 1989; 61 FR 19799, May 2, 1996; 87 FR 70742, Nov. 21, 2022] | (a) Flood insurance. No property improvement loan or manufactured home loan shall be eligible for insurance under this part if the property securing repayment of the loan is located in a special flood hazard area identified by the Federal Emergency Management Agency (FEMA), unless the community in which the area is situated is participating in the National Flood Insurance Program, flood insurance under the National Flood Insurance Program (NFIP) is available with respect to such property improvements, and flood insurance on the property is obtained by the borrower in compliance with section 102 of the Flood Disaster Protection Act of 1973 (42 U.S.C. 4012a). Such insurance shall be in the form of the standard policy issued under the National Flood Insurance Program (NFIP) or private flood insurance, as defined in 24 CFR 203.16a. Such insurance shall be obtained at any time during the term of the loan that the lender determines that the secured property is located in a special flood hazard area identified by FEMA and shall be maintained by the borrower for the remaining term of the loan, or until the lender determines that the property is no longer in a special flood hazard area, or until the property is repossessed or foreclosed upon by the lender. The amount of such insurance shall be at least equal to the unpaid balance of the Title I loan, and the lender shall be named as the loss payee for flood insurance benefits. A lender may determine that a private flood insurance policy meets the definition of private flood insurance, as defined in 24 CFR 203.16a, without further review of the policy, if the compliance aid statement provided in 24 CFR 203.16a(c) is included within the policy or as an endorsement to the policy. (b) Hazard insurance. No manufactured home purchase loan or combination loan shall be eligible for insurance under this part unless hazard insurance on the manufactured home is obtained by the borrower and the lender is named as a loss payee of insurance benefits. Such insurance shall be mainta… | |||
| 24:24:2.1.1.2.2.4.37.1 | 24 | Housing and Urban Development | II | B | 201 | PART 201—TITLE I PROPERTY IMPROVEMENT AND MANUFACTURED HOME LOANS | D | Subpart D—Insurance of Loans | § 201.30 Reporting of loans for insurance. | HUD | [50 FR 43523, Oct. 25, 1985, as amended at 56 FR 52434, Oct. 18, 1991; 66 FR 56420, Nov. 7, 2001] | (a) Date of reports. The lender shall transmit a loan report on each loan reported for insurance within 31 days from the date of the loan's origination or purchase from a dealer or another lender. The loan report must be submitted on the form prescribed by the Secretary, and must contain the data prescribed by HUD. Any loan refinanced under this part shall similarly be reported on the prescribed form within 31 days from the date of refinancing. When a loan insured under this part is transferred to another lender without recourse, guaranty, guarantee, or repurchase agreement, a report on the prescribed form shall be transmitted to the Secretary within 31 days from the date of the transfer. No transfer of loan report is required when a loan insured under this part is transferred with recourse or under a guaranty, guarantee, or repurchase agreement. (b) Late reports. The Secretary may accept a late report on a loan where the lender certifies that the obligation is not in default. (c) Electronic loan reporting. With the prior approval of the Secretary, the lender may use electronic transmission to report loans for insurance in accordance with paragraph (a) of this section. | |||
| 24:24:2.1.1.2.2.4.37.2 | 24 | Housing and Urban Development | II | B | 201 | PART 201—TITLE I PROPERTY IMPROVEMENT AND MANUFACTURED HOME LOANS | D | Subpart D—Insurance of Loans | § 201.31 Insurance charge. | HUD | [50 FR 43523, Oct. 25, 1985, as amended at 54 FR 36265, Aug. 31, 1989; 60 FR 13855, Mar. 14, 1995; 66 FR 56420, Nov. 7, 2001] | (a) Insurance charge. For each eligible property improvement loan and manufactured home loan reported and acknowledged for insurance, the lender shall pay to the Secretary an insurance charge equal to 1.00 percent of the loan amount, multiplied by the number of years of the loan term. The insurance charge shall be paid in the manner prescribed in paragraph (b) of this section; however, no charge shall be made for a period of 14 days or less, and a charge for a full month shall be made for a period of more than 14 days. There shall be no abatement or refund of an insurance charge except as provided in paragraph (e) of this section. (b) Payment of insurance charge. (1) For any loan having a maturity of 25 months or less, payment of the entire insurance charge prescribed in paragraph (a) of this section is due on the 25th calendar day after the date the Secretary acknowledges the loan report. (2)(i) For any loan having a maturity in excess of 25 months, payment of the insurance charge shall be made in annual installments, with the first installment due on the 25th calendar day after the date the Secretary acknowledges the loan report, and the second and successive installments due on the 25th calendar day after the date of billing by the Secretary. (ii) For any loan having a maturity in excess of 25 months, payment shall be made in annual installments of 1.00 percent of the loan amount until the insurance charge is paid. (3) All insurance charges are considered earned when paid. (4) The Secretary may require that loan insurance charges be remitted electronically. Instructions implementing this requirement shall be communicated to all affected lenders. (c) Penalty charge and interest. Insurance charges not received from the lender by the due date specified in paragraph (b) of this section shall be assessed a penalty charge of four percent of the amount of the payment. Insurance charges received from the lender more than 30 days after the due date specified in paragraph (b) of this section shall also be as… | |||
| 24:24:2.1.1.2.2.4.37.3 | 24 | Housing and Urban Development | II | B | 201 | PART 201—TITLE I PROPERTY IMPROVEMENT AND MANUFACTURED HOME LOANS | D | Subpart D—Insurance of Loans | § 201.32 Insurance coverage reserve account. | HUD | [50 FR 43523, Oct. 25, 1985, as amended at 52 FR 33407, Sept. 3, 1987; 54 FR 10537, Mar. 14, 1989; 56 FR 52434, Oct. 18, 1991; 61 FR 19799, May 2, 1996] | (a) Establishment. The Secretary shall establish an insurance coverage reserve account for each lender. The amount of insurance coverage in each reserve account shall equal 10 percent of the amount disbursed, advanced, or expended by the lender in originating or purchasing eligible loans registered for insurance under this part, less the amount of all insurance claims approved for payment in connection with losses on such loans. (b) Transfer of insured loans. The lender shall not sell, assign or otherwise transfer any insured loan or loan reported for insurance to a transferee lender not approved to originate and purchase title I loans under a valid title I contract of insurance. Nothing contained herein shall be construed to prevent the pledging of such a loan as collateral security under a trust agreement, or otherwise, in connection with a bona fide loan transaction. (c) Transfer of insurance coverage. Not more than $5,000 in insurance coverage shall be transferred to or from a lender's reserve account during any fiscal year (October 1 through September 30) without the prior approval of the Secretary. Except in cases involving the sale, assignment or transfer of loans sold with recourse or under a guaranty, guarantee or repurchase agreement, the Secretary shall transfer insurance coverage to or from a lender's reserve account to accompany the loan transfers reported by lenders under § 201.30. (1) In all cases involving the sale, assignment or transfer of loans sold without recourse, guaranty, guarantee, or repurchase agreement, the Secretary shall transfer insurance coverage to the reserve account established for the transferee lender in an amount equal to 10 percent of the actual purchase price or the net unpaid principal balance, whichever is lesser, but not to exceed the amount of insurance coverage in the transferor lender's reserve account prior to the transfer. Insurance coverage shall be added to the existing amount of insurance coverage in the transferee lender's reserve account. The Secretary… | |||
| 24:24:2.1.1.2.2.5.37.1 | 24 | Housing and Urban Development | II | B | 201 | PART 201—TITLE I PROPERTY IMPROVEMENT AND MANUFACTURED HOME LOANS | E | Subpart E—Loan Administration | § 201.40 Post-disbursement loan requirements. | HUD | [50 FR 43523, Oct. 25, 1985, as amended at 56 FR 52434, Oct. 18, 1991; 61 FR 19799, May 2, 1996] | (a) Discovery of misstatements of fact. If, after a loan has been made, the lender discovers any material misstatement of fact or that the loan proceeds have been misused by the borrower, dealer or any other party, it shall promptly report this to the Secretary. In such case, the insurance of the loan shall not be affected unless such material misstatement of fact or misuse of loan proceeds was caused by or was knowingly sanctioned by the lender or its employees (see § 201.31(e)(3)), provided that the validity of any lien on the property has not been impaired. (b) Requirements on property improvement loans. (1) After receiving the proceeds of a direct property improvement loan, and after the work is completed to the borrower's satisfaction, the borrower shall submit a completion certificate to the lender, on a HUD-approved form and signed by the borrower under applicable criminal and civil penalties for fraud and misrepresentation, certifying that: (i) The improvements have been completed, (ii) the amount borrowed has been spent on improvements eligible under § 201.20(b) and in accordance with the contract or cost estimate furnished to the lender prior to disbursement of the loan proceeds, and (iii) The borrower has not obtained the benefit of and will not receive any cash payment, rebate, cash bonus, sales commission, or anything of more than nominal value from any contractor or supplier as an inducement for the consummation of the loan transaction. (2) The borrower shall submit the completion certificate promptly upon the work's completion, but not later than six months after the disbursement of the loan proceeds, with one six-month extension if necessary. If the borrower fails to submit the completion certificate within these time limits, an on-site inspection shall be conducted in accordance with paragraph (c) of this section. (3) The borrower is not required to submit a completion certificate when the property improvement loan is made by or on behalf of a State or local government agency or a nonpr… | |||
| 24:24:2.1.1.2.2.5.37.2 | 24 | Housing and Urban Development | II | B | 201 | PART 201—TITLE I PROPERTY IMPROVEMENT AND MANUFACTURED HOME LOANS | E | Subpart E—Loan Administration | § 201.41 Loan servicing. | HUD | (a) Generally. The lender shall service loans in accordance with accepted practices of prudent lending institutions. It shall have adequate facilities for contacting the borrower in the event of default, and shall otherwise exercise diligence in collecting the amount due. The lender shall remain responsible to the Secretary for proper collection efforts, even though actual loan servicing and collection may be performed by an agent of the lender. The lender shall have an organized means of identifying, on a periodic basis, the payment status of delinquent loans to enable collection personnel to initiate and follow-up on collection activities, and shall document its records to reflect its collection activities on delinquent loans. (b) Partial payments. The lender shall accept any partial payment (inclusive of late charges) under an executed modification agreement or an acceptable repayment plan, and either apply it to the borrower's account or hold it in a trust account pending disposition. When partial payments held for disposition aggregate a full monthly installment, they shall be applied to the borrower's account, thus advancing the date of the oldest unpaid installment. If a partial payment is received more than 60 days after the date of default and was not submitted under a repayment plan or a modification agreement, the partial payment may be returned to the borrower, with a letter of explanation. | ||||
| 24:24:2.1.1.2.2.5.37.3 | 24 | Housing and Urban Development | II | B | 201 | PART 201—TITLE I PROPERTY IMPROVEMENT AND MANUFACTURED HOME LOANS | E | Subpart E—Loan Administration | § 201.42 Bankruptcy, insolvency or death of borrower. | HUD | [54 FR 36266, Aug. 31, 1989] | (a) Bankruptcy or insolvency. The lender shall file a proof of claim with the court having jurisdiction when the lender has timely information that a borrower is involved in bankruptcy or insolvency proceedings, except that a proof of claim need not be filed if the court notifies the lender that the borrower has no assets and a proof of claim should not be filed. The notice of bankruptcy and a copy of the proof of claim (or the notice from the court that a proof of claim is not required) shall be retained in the loan file. (b) Death of a borrower. The lender shall file a proof of claim with the court having jurisdiction when the lender has timely information that a borrower is deceased, unless the lender determines that there will not be a probate proceeding. A copy of the proof of claim (or documentation as to why a proof of claim was not filed) shall be retained in the loan file. (c) Responsibility of the lender after insurance claim is filed. After the Secretary pays an insurance claim, the Secretary will notify the bankruptcy or probate court, as appropriate, that the loan has been assigned to the United States and will request substitution as the party to whom the claim is owed. Until the insurance claim is paid, the lender shall take all steps necessary to protect the interests of the holder of the note in any bankruptcy or probate proceeding. | |||
| 24:24:2.1.1.2.2.5.37.4 | 24 | Housing and Urban Development | II | B | 201 | PART 201—TITLE I PROPERTY IMPROVEMENT AND MANUFACTURED HOME LOANS | E | Subpart E—Loan Administration | § 201.43 Administrative reports and examinations. | HUD | The Secretary may call upon a lender for any reports deemed necessary in connection with the regulations in this part and may inspect the loan files, records, books and accounts of the lender as they pertain to the loans reported for insurance. | ||||
| 24:24:2.1.1.2.2.6.37.1 | 24 | Housing and Urban Development | II | B | 201 | PART 201—TITLE I PROPERTY IMPROVEMENT AND MANUFACTURED HOME LOANS | F | Subpart F—Default Under the Loan Obligation | § 201.50 Lender efforts to cure the default. | HUD | [50 FR 43523, Oct. 25, 1985, as amended at 52 FR 33407, Sept. 3, 1987; 56 FR 52434, Oct. 18, 1991; 57 FR 6480, Feb. 25, 1992] | (a) Personal contact with the borrower before acceleration and foreclosure or repossession. The lender shall undertake foreclosure or repossession of the property securing a Title I loan that is in default only after the lender has serviced the loan in a timely manner and with diligence in accordance with the requirements of this part, and has taken all reasonable and prudent measures to induce the borrower to bring the loan account current. Before taking action to accelerate the maturity of the loan, the lender or its agent shall contact the borrower and any co-maker or co-signer, either in a face-to-face meeting or by telephone, to discuss the reasons for the default and to seek its cure. If the borrower and the co-makers or co-signers cannot be located, will not discuss the default, or will not agree to its cure, the lender may proceed to take action under paragraph (b) of this section. The lender shall document the results of its efforts to contact the borrower and any co-maker or co-signer, and shall place in the loan file a copy of any modification agreement or repayment plan that has been offered. (b) Notice of default and acceleration. Unless the borrower cures the default or agrees to a modification agreement or repayment plan, the lender shall provide the borrower with written notice that the loan is in default and that the loan maturity is to be accelerated. In addition to complying with applicable State or local notice requirements, the notice shall be sent by certified mail and shall contain: (1) A description of the obligation or security interest held by the lender; (2) A statement of the nature of the default and of the amount due to the lender as unpaid principal and earned interest on the note as of the date 30 days from the date of the notice; (3) A demand upon the borrower either to cure the default (by bringing the loan current or by refinancing the loan) or to agree to a modification agreement or a repayment plan, by not later than the date 30 days from the date of the notice; (4) A… | |||
| 24:24:2.1.1.2.2.6.37.2 | 24 | Housing and Urban Development | II | B | 201 | PART 201—TITLE I PROPERTY IMPROVEMENT AND MANUFACTURED HOME LOANS | F | Subpart F—Default Under the Loan Obligation | § 201.51 Proceeding against the loan security. | HUD | [50 FR 43523, Oct. 25, 1985, as amended at 54 FR 10537, Mar. 14, 1989; 54 FR 36266, Aug. 31, 1989; 56 FR 52435, Oct. 18, 1991] | (a) Property improvement loans. (1) After acceleration of maturity on a secured property improvement loan, the lender may either proceed against the loan security under its title I security instrument or make claim under its contract of insurance. If the lender proceeds against the loan security, it may submit an insurance claim only if it complies with the requirements of paragraph (a)(2) of this section. (2) The lender may proceed against the secured property under its Title I security instrument and later submit a claim under its contract of insurance only with the prior approval of the Secretary. The Secretary's decision will be based upon all relevant factors, including but not limited to the appraised value and the amount of all outstanding loan obligations on the property, the estimated costs of foreclosure and disposition, and the anticipated time to dispose of the property. In proceeding against the secured property, the lender shall comply with all applicable State and local laws, and shall take all actions necessary to preserve its rights, if any, to obtain a valid and enforceable deficiency judgment against the borrower. (3) After acceleration of maturity on a defaulted unsecured property improvement loan, the lender may submit a claim under its contract of insurance. (b) Manufactured home loans. (1) After acceleration of maturity on a defaulted manufactured home loan, the lender shall proceed against the loan security by foreclosure or repossession, as appropriate, in compliance with all applicable State and local laws, and shall acquire good, marketable title to the property securing the loan. The lender shall also take all actions necessary under State and local law to preserve its rights, if any, to obtain a valid and enforceable deficiency judgment against the borrower. (2) Prior to foreclosure or repossession, the lender or its agent shall make a visual inspection of the property and prepare a report on its condition for placement in the loan file. If the lender determines that the prope… | |||
| 24:24:2.1.1.2.2.6.37.3 | 24 | Housing and Urban Development | II | B | 201 | PART 201—TITLE I PROPERTY IMPROVEMENT AND MANUFACTURED HOME LOANS | F | Subpart F—Default Under the Loan Obligation | § 201.52 Acquisition by voluntary conveyance or surrender. | HUD | [50 FR 43523, Oct. 25, 1985, as amended at 61 FR 19799, May 2, 1996] | The lender may accept a voluntary conveyance of title to or ownership of the property securing a manufactured home loan which is in default, provided that (a) the lender accepts the conveyance in full satisfaction of the borrower's obligation, and (b) no claim is submitted under its contract of insurance. The lender may accept voluntary surrender of the property without satisfaction of the borrower's obligation, provided that if the lender intends thereafter to submit a claim under its contract of insurance, the lender shall acquire title to or ownership of the property and then dispose of and sell the property in compliance with State and local law, so as to assure that it can assign a valid and enforceable obligation, including any deficiency against the borrower, to the Secretary when submitting its claim. If the lender accepts a voluntary conveyance of title or a voluntary surrender of the property, the notice of default and acceleration under § 201.50(b) shall not be required. | |||
| 24:24:2.1.1.2.2.6.37.4 | 24 | Housing and Urban Development | II | B | 201 | PART 201—TITLE I PROPERTY IMPROVEMENT AND MANUFACTURED HOME LOANS | F | Subpart F—Default Under the Loan Obligation | § 201.53 Disposition of manufactured home loan property. | HUD | [50 FR 43523, Oct. 25, 1985, as amended at 61 FR 19799, May 2, 1996] | Where the lender obtains title to property securing a manufactured home loan by repossession or foreclosure, the property shall be sold for the best price obtainable before making an insurance claim. In the case of a combination loan, the manufactured home and lot shall be sold in a single transaction and the manufactured home may not be removed from the lot, unless the prior approval of the Secretary is obtained for a different procedure. The best price obtainable shall be the greater of: (a) The actual sales price of the property, after deducting the cost of repairs, furnishings, and equipment needed to make the property marketable, and after deducting the cost of transportation, set-up, and anchoring if the manufactured home is moved to a new homesite; or (b) The appraised value of the property before repairs (as determined by a HUD-approved appraisal obtained in accordance with § 201.51(b)(3)). | |||
| 24:24:2.1.1.2.2.6.37.5 | 24 | Housing and Urban Development | II | B | 201 | PART 201—TITLE I PROPERTY IMPROVEMENT AND MANUFACTURED HOME LOANS | F | Subpart F—Default Under the Loan Obligation | § 201.54 Insurance claim procedure. | HUD | [50 FR 43523, Oct. 25, 1985; 51 FR 5068, Feb. 11, 1986, as amended at 51 FR 32060, Sept. 9, 1986; 56 FR 52435, Oct. 18, 1991; 57 FR 6480, Feb. 25, 1992; 61 FR 19800, May 2, 1996] | (a) Claim application. A claim for reimbursement for loss on any eligible loan shall be made on a HUD-approved form, executed by a duly qualified officer of the lender under applicable criminal and civil penalties for fraud and misrepresentation. The insurance claim shall be fully documented and itemized, and shall be accompanied by all documents and materials required by the Secretary for claim review. The claim submission shall contain original copies of all notes, security instruments, assumption agreements, releases of liability for repayment of the loan, judgments obtained by the lender against the borrower, and any related documents and forms, except where State or local law requires their retention by the lender or a governmental body such as a court. As appropriate, the claim application shall be supported by the following: (1) Documentation of the lender's efforts to effect recourse against any dealer in accordance with any recourse agreement under § 201.27(b) between the lender and the dealer and contained in the loan documents; (2) Certification under applicable criminal and civil penalties for fraud and misrepresentation that the lender has complied with all applicable State and local laws in carrying out any foreclosure or repossession, including copies of all notices served upon the borrower or published in connection with such foreclosure or repossession; and (3) Where a borrower has declared bankruptcy or insolvency or is deceased, copies of the documentation required to be retained in the loan file under § 201.42. (b) Maximum claim period. (1) An insurance claim shall be filed not later than the following dates: (i) For property improvement loans—nine months after the date of default. (ii) For manufactured home loans—three months after the date of sale of the property securing the loan, but not to exceed 18 months after the date of default. (2) The Secretary may extend the claim filing period in a particular case, but only if the lender shows clear evidence that the delay in claim fili… | |||
| 24:24:2.1.1.2.2.6.37.6 | 24 | Housing and Urban Development | II | B | 201 | PART 201—TITLE I PROPERTY IMPROVEMENT AND MANUFACTURED HOME LOANS | F | Subpart F—Default Under the Loan Obligation | § 201.55 Calculation of insurance claim payment. | HUD | [50 FR 43523, Oct. 25, 1985, as amended at 54 FR 10537, Mar. 14, 1989; 54 FR 36266, Aug. 31, 1989; 56 FR 52435, Oct. 18, 1991; 57 FR 30395, July 9, 1992; 61 FR 19800, May 2, 1996] | The lender will be reimbursed in an amount not to exceed 90 percent of its loss on any eligible loan up to the amount of insurance coverage in the lender's insurance coverage reserve account established by the Secretary under § 201.32, if the insurance claim is made in accordance with the requirements of this part. The amount of the insurance claim payment shall be computed as follows: (a) Property improvement loans. For property improvement loans, the insurance claim payment shall be 90 percent of the following amounts: (1) The unpaid amount of the loan obligation (net unpaid principal and the uncollected interest earned to the date of default, calculated according to the terms of the note executed for any loan application that is approved prior to the effective date of these regulations, and calculated according to the actuarial method for all loans for which loan applications are approved on or after the effective date of these regulations). Where the lender has proceeded against the secured property under § 201.51(a)(2), the unpaid amount of the loan obligation shall be reduced by the proceeds received from the property's sale or disposition, after deducting the following: (i) The balances due on any obligations senior to the Title I loan obligation; and (ii) Customary and reasonable expenses for foreclosure and disposition, as determined by the Secretary. (2) Interest on the unpaid amount of the loan obligation from the date of default to the date of the claim's initial submission for payment plus 15 calendar days, calculated at the rate of seven percent per annum. However, interest shall not be paid for any period greater than nine months from the date of default. (3) The amount of uncollected court costs, including fees paid for issuing, serving, and filing a summons. (4) The amount of attorney's fees on an hourly or other basis for time actually expended and billed, not to exceed $500. (5) The amount of expenses for recording the assignment of the security to the United States. (b) Manufacture… | |||
| 24:24:2.1.1.2.2.7.37.1 | 24 | Housing and Urban Development | II | B | 201 | PART 201—TITLE I PROPERTY IMPROVEMENT AND MANUFACTURED HOME LOANS | G | Subpart G—Debts Owed to the United States Under Title I | § 201.60 General. | HUD | (a) Applicability. The provisions in this subpart apply to the collection of debts owed to the United States arising out of the Title I program. These debts include, but are not limited to: (1) Amounts owed on loans assigned to the United States by insured lenders as the result of defaults by borrowers; (2) Unpaid insurance charges owed by lenders; and (3) Unpaid obligations of lenders arising from repurchase demands. (b) Departmental debt collection regulations. Except as modified by this subpart, collection of debts arising out of the Title I program is subject to the Department's debt collection regulations in subpart C of 24 CFR part 17. | ||||
| 24:24:2.1.1.2.2.7.37.2 | 24 | Housing and Urban Development | II | B | 201 | PART 201—TITLE I PROPERTY IMPROVEMENT AND MANUFACTURED HOME LOANS | G | Subpart G—Debts Owed to the United States Under Title I | § 201.61 Claims against debtors—principal amount of debt. | HUD | (a) Liability. A debtor is liable to the Secretary for the principal amount of the debt, as described in paragraphs (b), (c), or (d) of this section, as appropriate. (b) Property improvement notes. In the case of an assigned note for a property improvement loan, the principal amount of the debt is the unpaid amount of the loan obligation, as defined in § 201.55(a)(1) of this part, plus amounts described in §§ 201.55(a) (3), (4), (5). (c) Manufactured home notes. In the case of an assigned note for a manufactured home loan, the principal amount of the debt is the unpaid amount of the loan obligation, as defined in § 201.55(b)(1) of this part, plus amounts described in §§ 201.55(b) (3) through (8). (d) Assigned judgments. In the case of a judgment obtained by the lender on a property improvement loan or a manufactured home loan and assigned to the Secretary, the principal amount of the debt is the amount of the judgment. | ||||
| 24:24:2.1.1.2.2.7.37.3 | 24 | Housing and Urban Development | II | B | 201 | PART 201—TITLE I PROPERTY IMPROVEMENT AND MANUFACTURED HOME LOANS | G | Subpart G—Debts Owed to the United States Under Title I | § 201.62 Claims against debtors—interest, penalties, and administrative costs. | HUD | (a) Interest. In addition to the principal amount of the debt, the debtor is liable for the payment of interest. Interest accrues on the principal amount of the debt as of the date of default, as defined in § 201.2(h) of this part, as follows: (1) In the case of a debt based upon the assignment of a defaulted note, interest is assessed at the lesser of the rate specified in the note or the United States Treasury's current value of funds rate in effect on the date the Title I insurance claim was paid. (2) In the case of a debt based upon the assignment of a judgment, interest is assessed at the lesser of the rate specified in the judgment or the United States Treasury's current value of funds rate in effect on the date the Title I insurance claim was paid. (b) Penalties and administrative costs. The Secretary shall assess reasonable administrative costs and penalties as authorized in 31 U.S.C. 3717, unless there is no provision in the note providing for such charges and the debtor has not otherwise consented to liability for such charges. | ||||
| 24:24:2.1.1.2.2.7.37.4 | 24 | Housing and Urban Development | II | B | 201 | PART 201—TITLE I PROPERTY IMPROVEMENT AND MANUFACTURED HOME LOANS | G | Subpart G—Debts Owed to the United States Under Title I | § 201.63 Claims against lenders. | HUD | Claims against lenders for money owed to the Department, including unpaid insurance charges and unpaid repurchase demands, shall be collected in accordance with 24 CFR part 17, subpart C. |
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