24 C.F.R. § 206.31

Allowable charges and fees

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(a) Fees at closing. The mortgagee may collect, either in cash at the time of closing or through an initial payment under the mortgage, the following charges and fees incurred in connection with the origination, processing, and closing of the mortgage loan:

(1) Loan Origination Fee. Mortgagees may charge a loan origination fee and may use such fee to pay for services performed by a sponsored third-party originator. The loan origination fee limit shall be the greater of $2,500 or two percent of the maximum claim amount of $200,000, plus one percent of any portion of the maximum claim amount that is greater than $200,000. Mortgagees may accept a lower origination fee. Mortgagees may pay fees for services performed by a sponsored third-party originator and these fees may be included as part of the loan origination fee. The total amount of the loan origination fee may not exceed $6,000, except that the Commissioner may through notice adjust the maximum limit in accordance with the annual percentage increase in the Consumer Price Index of the Bureau of Labor Statistics of the Department of Labor in increments of $500 only when the percentage increase in such index, when applied to the maximum origination fee, produces dollar increases that exceed $500. The loan origination fee may be fully financed with the mortgage.

(2) Reasonable and customary amounts. 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 the recordation of the insured mortgage;

(ii) Credit report;

(iii) Survey, if required by the mortgagee or the borrower;

(iv) Title examination;

(v) Mortgagee's title insurance;

(vi) Fees paid to an appraiser for the initial appraisal of the property;

(vii) Flood certifications; and

(viii) Such other charges as may be authorized by the Commissioner.

(b) Repair administration fee. If the property requires repairs after closing in order to meet FHA requirements, the mortgagee may collect a fee for each occurrence as compensation for administrative duties relating to repair work pursuant to § 206.47(c) and (d), not to exceed the greater of one and one-half percent of the amount advanced for the repairs or fifty dollars. The mortgagee shall collect the repair fee by adding it to the outstanding loan balance.

Notes of Decisions

Cited in 3 cases, 2008–2011 · leading case: Munoz v. Fin. Freedom Senior Funding Corp., 567 F. Supp. 2d 1156 (C.D. Cal. 2008).

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Munoz v. Fin. Freedom Senior Funding Corp., 567 F. Supp. 2d 1156 (C.D. Cal. 2008). · cites it 2× “First, she contends that laws of general applicability like CLRA and California’s unfair competition law are not preempted by HOLA.”

Labrador v. Seattle Mortg. Co., 681 F. Supp. 2d 1106 (N.D. Cal. 2010). · cites it 4× “The crux of Plaintiffs Complaint is that SMC violated the federal regulation 24 C.F.R. § 206.31 (a)(1) (“§ 206.31(a)(1)”).”

Taft v. Wells Fargo Bank, N.A., 828 F. Supp. 2d 1031 (D. Minnesota 2011). “” 24 C.F.R. § 206.31 (a)(1). Thus, Wells Fargo included the amount of the origination fee in the principal balance.”

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