FHA’s Single Family Housing Policy Handbook (SF Handbook; HUD Handbook 4000.1) III.A..2.d.ii Late Charges section requires that late charges assessed shall not exceed 4 percent of the overdue payment of principal and interest on mortgages assigned an FHA case number on or after March 14, 2016.
Accordingly, we will be changing our multistate Late Payment text on various FHA Notes and other documents from, “The amount of the charge will be 4.000% of my overdue payment, unless such amount exceeds the maximum amount allowed by applicable state law, in which case the Lender may collect the maximum amount allowed by such law” to the newly required, “The amount of the charge will be 4.000% of my overdue payment of principal and interest.” Similar appropriate changes have been made for those states that have state-required text related to Late Payments.
The FHA Notes modified pursuant to this change are:
- FHA Note Fixed (Cx36)
- FHA ARM Note – Treasury (Cx861)
- FHA ARM Note – LIBOR (Cx13045)
- FL Housing – FHA Note (Cx15130)
- NY CEMA GAP – FHA Note Fixed (Cx16243)
- Custom NY CEMA GAP – FHA Note Fixed (Cx16507)
- AK Housing – FHA Note Fixed (Cx19047)
We will also be changing the Late Payment language on our English and Spanish copies of the Loan Estimate and Closing Disclosure, as follows:
- 18565 Loan Estimate
- 18566 Closing Disclosure
- 18990 Spanish Loan Estimate
- 18991 Spanish Closing Disclosure
These changes will only be applied for loans with FHA Case Number Assignment Dates (Field 42450) on or after March 14, 2016. The functionality supporting these changes will be in place on March 12, 2016. If you have any questions or concerns about these changes, please contact Client Support at 1.800.497.3584.
DR 194100