24 C.F.R. § 203.27

Charges, fees or discounts

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(a) The mortgagee may collect from the mortgagor the following charges, fees or discounts:

(1) [Reserved]

(2) A charge to compensate the mortgagee for expenses incurred in originating and closing the loan, provided that the Commissioner may establish limitations on the amount of any such charge.

(3) Reasonable and customary amounts, but not more than the amount actually paid by the mortgagee, for any of the following items:

(i) Recording fees and recording taxes or other charges incident to recordation;

(ii) Credit Report;

(iii) Survey, if required by mortgagee or mortgagor;

(iv) Title examination; title insurance, if any;

(v) Fees paid to an appraiser or inspector approved by the Commissioner for the appraisal and inspection, if required, of the property. Notwithstanding any limitations in this paragraph (a)(3) if the mortgagee is permitted by applicable regulations to use the services of staff appraisers and inspectors for processing mortgages, and does so, the mortgagee may collect from the mortgagor the reasonable and customary amounts for such appraisals and inspections.

(vi) Such other reasonable and customary charges as may be authorized by the Commissioner.

(4) Reasonable and customary charges in the nature of discounts.

(5) Interest from the date of closing or the date on which the mortgagee disburses the mortgage proceeds to the account of the mortgagor or the mortgagor's creditors, whichever is later, to the date of the beginning of amortization.

(b)-(c) [Reserved]

(d) Before the insurance of any mortgage, the mortgagee shall furnish to the Secretary a signed statement in a form satisfactory to the Secretary listing any charge, fee or discount collected by the mortgagee from the mortgagor. All charges, fees or discounts are subject to review by the Secretary both before and after endorsement under § 203.255.

(e) Nothing in this section will be construed as prohibiting the mortgagor from dealing through a broker who does not represent the mortgagee, if he prefers to do so, and paying such compensation as is satisfactory to the mortgagor in order to obtain mortgage financing.

[36 FR 24508, Dec. 22, 1971, as amended at 43 FR 19846, May 9, 1978; 45 FR 30602, May 8, 1980; 45 FR 33966, May 21, 1980; 47 FR 29525, July 7, 1982; 48 FR 11940, Mar. 22, 1983; 48 FR 28804, June 23, 1983; 49 FR 19457, May 8, 1984; 57 FR 58347, Dec. 9, 1992; 58 FR 13537, Mar. 12, 1993; 73 FR 68239, Nov. 17, 2008]

Notes of Decisions

Cited in 10 cases, 1992–2020 · leading case: Bjustrom v. Trust One Mortg., 178 F. Supp. 2d 1183 (W.D. Wash. 2001).

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Bjustrom v. Trust One Mortg., 178 F. Supp. 2d 1183 (W.D. Wash. 2001). · cites it 9× “Plaintiffs find the 1% cap in their reading of the HUD rule regarding single family mortgage insurance currently codified as 24 C.F.R. § 203.27 (a)(2)(i). This rule reads, in applicable part: “(a) The mortgagee may collect from the mortgagor the following charges, fees, or…”

Mary E. Bjustrom, Individually & on Behalf of All Others Similary Situated v. Trust One Mortg. Corp., 322 F.3d 1201 (9th Cir. 2003). · cites it 5× “The Bjustrom class maintains that, for FHA loans, an FHA regulation forbids lending institutions, such as Trust One, from paying mortgage brokers any compensation for any service in excess of 1% of the mortgage amount, and bar mortgage brokers from receiving any such additional…”

Byars v. SCME Mortg. Bankers, Inc., 2003 Cal. Daily Op. Serv. 5188 (Cal. Ct. App. 2003). · cites it 2× “” ( 24 C.F.R. § 203.27 (2003).) III Whether the YSP Violated HUD’s One Percent Limit on Loan Origination Fees Byars contends the fees paid to a mortgage broker for an FELA loan are limited by HUD regulations to the loan origination fee and may not exceed 1 percent of the loan…”

John Robert Culpepper v. Inland Mortg. Corp, 491 F.3d 1260 (11th Cir. 2007). · cites it 3× “See 24 C.F.R. § 203.27 (a)(2)(i). Other circuits that have considered that argument have rejected it, concluding that the limitation on mortgage broker fees set forth in 24 C.”

Polek v. J.P. Morgan Chase Bank, N.A., 36 A.3d 399 (Md. 2012). “24 C.F.R. § 203.27 (2009). This federal regulation allows “reasonable and customary amounts” of charges and fees “for expenses incurred in originating and closing the loan,” including recordation fees and taxes; credit reports; *357 surveys; title fees; inspection and appraisal…”

Dominguez v. All. Mortg. Co., 226 F. Supp. 2d 907 (N.D. Ill. 2002). · cites it 3× “24 C.F.R. § 203.27 (a). Origination fees in particular are capped at 1% of the original loan principal.”

United States of Am., Plaintiff-Appellee/cross-Appellant v. Hiram Stanley Sasser, Ii, Defendant-Appellant/cross-Appellee, 971 F.2d 470 (10th Cir. 1992). “Although the settlement statements identify a number of items as “charges” or “fees,” neither earnest money nor down payment is designated as a “charge” or “fee” on the settlement statements.”

Geraci v. Homestreet Bank, 203 F. Supp. 2d 1211 (W.D. Wash. 2002). “See 24 C.F.R. § 203.27 (a)(2)(i). The Bjustrom court held that the yield spread premiums are not part of the one percent cap under the HUD/FHA regulations.”

Watson v. CBSK Fin. Grp., Inc., 197 F. Supp. 2d 1118 (N.D. Ill. 2002). · cites it 3× “24 CFR § 203.27 . DISCUSSION The focus of this action is on the payment of YSP’s, a practice that has not been definitively addressed by our appellate court or, for that matter, by HUD.”

Ekstrom v. Cong. Bank (D. Maryland 2020). “¶¶ 111 , 112 (citing 24 C.F.R. §§ 203.27 , 203.255). However, according to plaintiffs, “American Bank falsely certified borrowers Direct Endorsement” because “the fees charged borrowers did not comply with HUD regulations 3 American Bank, as a lender, was obligated to provide a…”

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