24 C.F.R. Subpart B—Violations
Title 24 - Housing and Urban Development
(a) General. The General Counsel, or his or her designee, may initiate a civil money penalty action against HUD employees who improperly disclose information pursuant to section 103 of the HUD Reform Act of 1989 (42 U.S.C. 3537a(c)) and 24 CFR part 4, subpart B. (b) Maximum penalty. The maximum penalty is $11,000 for each violation. (a) General. The General Counsel, or his or her designee, may initiate a civil money penalty action against applicants for assistance, as defined in 24 CFR part 4, subpart A, who knowingly and materially violate the provisions of subsections (b) or (c) of section 102 of the HUD Reform Act of 1989 (42 U.S.C. 3545). (b) Maximum penalty. The maximum penalty for each violation is $11,000. (a) General. The Assistant Secretary for Community Planning and Development, or his or her designee, or the Director of the Office of Technical Assistance and Management may initiate a civil money penalty action against persons who knowingly and materially violate section 810 of the Housing and Community Development Act of 1974, as amended (12 U.S.C. 1706e), or the provisions of 24 CFR part 590, in the use or conveyance of property made available under the Urban Homestead Program. (b) Maximum penalty. The maximum penalty is either twice the amount of the gross profit realized from any impermissible use or conveyance of the property, or the amount of section 810 funds used to reimburse HUD, the Department of Veterans Affairs, the Resolution Trust Corporation, or the Farmers Home Administration (or its successor agency under Public Law 103–354) for the property, whichever is greater. If the property is still held by the violator, the gross profit shall include any appreciation between the amount the violator paid for the property and its current value as determined by an independent, HUD-qualified appraiser. (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 §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 §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 §§203.650 through 203.664 of this title or in §§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 §§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 §203.431 of this title; (iv) Timely submit proper notification of mortgage insurance termination as required by §203.318 of this title; (v) Timely submit proper notification of a change in mortgage servicing as required by §203.502 of this title; or (vi) Report all delinquent mortgages to HUD, as required by §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 §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] (a) General. The Assistant Secretary for Housing-Federal Housing Commissioner (or his/her designee) may initiate a civil money penalty action against any principal, officer, or employee of a mortgagee or lender, or other participants in either a mortgage insured under the National Housing Act or any loan that is covered by a contract of insurance under title I of the National Housing Act, or a provider of assistance to the borrower in connection with any such mortgage or loan, including: (1) Sellers; (2) Borrowers; (3) Closing agents; (4) Title companies; (5) Real estate agents; (6) Mortgage brokers; (7) Appraisers; (8) Loan correspondents; (9) Dealers; (10) Consultants; (11) Contractors; (12) Subcontractors; and (13) Inspectors. (b) Knowing and material violations. The Assistant Secretary for Housing-Federal Housing Commissioner or his/her designee may impose a civil penalty on any person or entity identified in paragraph (a) of this section who knowingly and materially: (1) Submits false information to the Secretary in connection with any mortgage insured under the National Housing Act (12 U.S.C. 1701 et seq.), or any loan that is covered by a contract of insurance under title I of the National Housing Act; (2) Falsely certifies to the Secretary or submits a false certification by another person or entity to the Secretary in connection with any mortgage insured under the National Housing Act or any loan that is covered by a contract of insurance under title I of the National Housing Act; or (3) Is a loan dealer or correspondent and fails to submit to the Secretary information which is required by regulations or directives in connection with any loan that is covered by a contract of insurance under title I of the National Housing Act. (c) Amount of penalty. The maximum penalty is $5,500 for each violation, up to a limit of $1,100,000 for all violations committed during any one-year period. Each violation shall constitute a separate violation as to each mortgage or loan application. [65 FR 9087, Feb. 23, 2000] (a) General. The Assistant Secretary for Public and Indian Housing (or his/her designee) may initiate a civil money penalty action against any mortgagee or holder of a guarantee certificate who knowingly and materially violates the provisions of 12 U.S.C. 1715z–13a(g)(2) concerning loan guarantees for Indian housing. (b) Continuing violation. Each day that a violation continues shall constitute a separate violation. (c) Amount of penalty. The maximum penalty is $6,000 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 65 FR 9087, Feb. 23, 2000; 68 FR 12788, Mar. 17, 2003] (a) Definitions. The following definitions apply to this section only: (1) Agent employed to manage the property that has an identity of interest and identity of interest agent. An entity: (i) That has management responsibility for a project; (ii) In which the ownership entity, including its general partner or partners (if applicable) and its officers or directors (if applicable), has an ownership interest; and (iii) Over which the ownership entity exerts effective control. (2) Effective control. The ability to direct, alter, supervise, or otherwise influence the actions, policies, decisions, duties, employment, or personnel of the management agent. (3) Entity. An individual corporation; company; association; partnership; authority; firm; society; trust; state, local government or agency thereof; or any other organization or group of people. (4) Multifamily property. Property that includes 5 or more living units and that has a mortgage insured, co-insured, or held pursuant to the National Housing Act (12 U.S.C. 1702 et seq.). (5) Ownership interest. Any direct or indirect interest in the stock, partnership interests, beneficial interests (for a trust) or other medium of equity participation. An indirect interest includes equity participation in any entity that holds a management interest (e.g. general partner, managing member of an LLC, majority stockholder, trustee) or minimum equity interest (e.g., a 25% or more limited partner, 10% or more stockholder) in the ownership entity of the management agent. (6) Section 202 or 811 property. Property that includes 5 or more living units and that has a mortgage held pursuant to a direct loan or capital advances under section 202 of the Housing Act of 1959 (12 U.S.C. 1701q) or capital advances under section 811 of the Cranston-Gonzalez National Affordable Housing Act (42 U.S.C. 8013). (b) Violation of agreement—(1) General. The Assistant Secretary for Housing-Federal Housing Commissioner, or his or her designee, may initiate a civil money penalty action against a mortgagor of a section 202 or 811 property or a mortgagor, general partner of a partnership mortgagor, or any officer or director of a corporate mortgagor of a multifamily property who: (i) Has agreed in writing, as a condition of a transfer of physical assets, a flexible subsidy loan, a capital improvement loan, a modification of the mortgage terms, or a workout agreement, to use nonproject income to make cash contributions for payments due under the note and mortgage, for payments to the reserve for replacements, to restore the project to good physical condition, or to pay other project liabilities; and (ii) Knowingly and materially fails to comply with any of the commitments listed in paragraph (b)(1)(i) of this section. (2) Maximum penalty. The maximum penalty for each violation under paragraph (b) of this section is the amount of loss that the Secretary would experience at a foreclosure sale, or a sale after foreclosure, of the property involved. (c) Other violations. The Assistant Secretary for Housing-Federal Housing Commissioner, or his or her designee, may initiate a civil money penalty action against any of the following who knowingly and materially take any of the actions listed in 12 U.S.C. 1735f–15(c)(1)(B): (1) Any mortgagor of a multifamily property; (2) Any general partner of a partnership mortgagor of such property; (3) Any officer or director of a corporate mortgagor; (4) Any agent employed to manage the property that has an identity of interest with the mortgagor, with the general partner of a partnership mortgagor, or with any officer or director of a corporate mortgagor of such property; or (5) Any member of a limited liability company that is the mortgagor of such property or is the general partner of a limited partnership mortgagor or is a partner of a general partnership mortgagor. (d) Acceptable management. For purposes of this rule, “management acceptable to the Secretary” under 12 U.S.C. 1735f–15(c)(1)(B)(xiv) shall include: (1) Proper fiscal management; (2) Proper handling of vacancies and tenanting in accordance with HUD regulations; (3) Appropriate handling of rent collection; (4) Proper maintenance; (5) Compliance with HUD regulations on tenant organization; and (6) Any other matters that pertain to proper management. (e) Civil money penalty. A consistent pattern of violations of HUD program requirements, or a single violation that causes serious injury to the public or tenants, can be a basis for an action to assess a civil money penalty. (f) Section 202 or 811 projects. The Assistant Secretary for Housing-Federal Housing Commissioner, or his or her designee, may initiate a civil money penalty action against any mortgagor of a section 202 or 811 property who knowingly and materially takes any of the actions listed in 12 U.S.C. 1701q–1(c)(1). (g) Maximum penalty. The maximum penalty for each violation under paragraph (c) of this section is $32,500. (h) Payment of penalty. No payment of a civil money penalty levied under this section shall be payable out of project income. (i) Exceptions. The Secretary may not impose penalties under this section for a violation, if a material cause of the violation is the failure of the Secretary, an agent of the Secretary, or a public housing agency to comply with an existing agreement. [66 FR 63441, Dec. 6, 2001, as amended at 68 FR 12788, Mar. 17, 2003] (a) General. The President of GNMA, or his or her designee, may initiate a civil money penalty action against a GNMA issuer or custodian that knowingly and materially violates any provision of 12 U.S.C. 1723i(b), title III of the National Housing Act, or any implementing regulation, handbook, guaranty agreement, or contractual agreement, or participant letter issued by GNMA, or fails to comply with the terms of a settlement agreement with GNMA. (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 during any one-year period. Each violation shall constitute a separate violation with respect to each pool of mortgages. [61 FR 50215, Sept. 24, 1996, as amended at 68 FR 12788, Mar. 17, 2003] (a) General. The Assistant Secretary for Housing-Federal Housing Commissioner, or his or her designee, may initiate a civil money penalty action against any person who knowingly and materially violates any provision of the Interstate Land Sales Full Disclosure Act (15 U.S.C. 1701 et seq.); the rules and regulations set forth at 24 CFR parts 1710, 1715, and 1720; or any order issued thereunder. (b) Continuing violation. Each day that a violation continues shall constitute a separate violation. (c) Amount of penalty. The maximum penalty is $1,100 for each violation, up to a limit for any particular person of $1,250,000 during any one-year period. Each violation shall constitute a separate violation as to each sale or lease or offer to sell or lease. [61 FR 50215, Sept. 24, 1996, as amended at 68 FR 12788, Mar. 17, 2003] (a) General. The Assistant Secretary for Housing-Federal Housing Commissioner, or his or her designee, may initiate a civil money penalty action against any dealer or loan correspondent who violates section 2(b)(7) of the National Housing Act (12 U.S.C. 1703). Such violations include, but are not limited to: (1) Falsifying information on an application for dealer approval or reapproval submitted to a lender; (2) Falsifying statements on a HUD credit application, improvement contract, note, security instrument, completion certificate, or other loan document; (3) Failing to sign a credit application if the dealer or loan correspondent assisted the borrower in completing the application; (4) Falsely certifying to a lender that the loan proceeds have been or will be spent on eligible improvements; (5) Falsely certifying to a lender that the property improvements have been completed; (6) Falsely certifying that a borrower has not been given or promised any cash payment, rebate, cash bonus, or anything of more than nominal value as an inducement to enter into a loan transaction; (7) Making a false representation to a lender with respect to the creditworthiness of a borrower or the eligibility of the improvements for which a loan is sought. (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 for any particular person of $1,250,000 during any one-year period. [61 FR 50215, Sept. 24, 1996, as amended at 68 FR 12788, Mar. 17, 2003] (a) General. The Director of the Office of Healthy Homes and Lead Hazard Control, or his or her designee, may initiate a civil money penalty action against any person who knowingly violates 42 U.S.C. 4852d. (b) Amount of penalty. The maximum penalty is $11,000 for each violation. [65 FR 50593, Aug. 18, 2000] (a) Definitions. The following definitions apply to this section only: Agent employed to manage the property that has an identity of interest and identity of interest agent. An entity: (1) That has management responsibility for a project; (2) In which the ownership entity, including its general partner or partners (if applicable), has an ownership interest; and (3) Over which the ownership entity exerts effective control. Effective control. The ability to direct, alter, supervise, or otherwise influence the actions, policies, decisions, duties, employment, or personnel of the management agent. Entity. An individual corporation; company; association; partnership; authority; firm; society; trust; state, local government or agency thereof; or any other organization or group of people. Ownership interest. Any direct or indirect interest in the stock, partnership interests, beneficial interests (for a trust) or other medium of equity participation. An indirect interest includes equity participation in any entity that holds a management interest (e.g. general partner, managing member of an LLC, majority stockholder, trustee) or minimum equity interest (e.g., a 25% or more limited partner, 10% or more stockholder) in the ownership entity of the management agent. (b) General. The Assistant Secretary for Housing-Federal Housing Commissioner, or his or her designee, and the Assistant Secretary for Public and Indian Housing, or his or her designee, may initiate a civil money penalty action against any owner, any general partner of a partnership owner, or any agent employed to manage the property that has an identity of interest with the owner or the general partner of a partnership owner of a property receiving project-based assistance under section 8 of the United States Housing Act of 1937 (42 U.S.C. 1437f) for a knowing and material breach of a housing assistance payments contract, including the following: (1) Failure to provide decent, safe, and sanitary housing pursuant to section 8 of the United States Housing Act of 1937 and 24 CFR 5.703; or (2) Knowing or willful submission of false, fictitious, or fraudulent statements or requests for housing assistance payments to the Secretary or to any department or agency of the United States. (c) Maximum penalty. The maximum penalty for each violation under this section is $25,000. (d) Payment of penalty. No payment of a civil money penalty levied under this section shall be payable out of project income. (e) Exceptions. The Secretary may not impose penalties under this section for a violation, if a material cause of the violation is the failure of the Secretary, an agent of the Secretary, or a public housing agency to comply with an existing agreement. [66 FR 63442, Dec. 6, 2001]
Title 24: Housing and Urban Development
PART 30—CIVIL MONEY PENALTIES: CERTAIN PROHIBITED CONDUCT
Subpart B—Violations
§ 30.20 Ethical violations by HUD employees.
§ 30.25 Violations by applicants for assistance.
§ 30.30 Urban Homestead violations.
§ 30.35 Mortgagees and lenders.
§ 30.36 Other participants in FHA programs.
§ 30.40 Loan guarantees for Indian housing.
§ 30.45 Multifamily and section 202 or 811 mortgagors.
§ 30.50 GNMA issuers and custodians.
§ 30.55 Interstate Land Sales violations.
§ 30.60 Dealers or loan correspondents.
§ 30.65 Failure to disclose lead-based paint hazards.
§ 30.68 Section 8 owners.
