12 U.S. Code § 1735f–14 - Civil money penalties against mortgagees, lenders, and other participants in FHA programs
If a mortgagee approved under the [1] chapter, a lender holding a contract of insurance under subchapter I, or a principal, officer, or employee of such mortgagee or lender, or other person or entity participating in either an insured mortgage or subchapter I loan transaction under this chapter or providing assistance to the borrower in connection with any such loan, including sellers of the real estate involved, borrowers, closing agents, title companies, real estate agents, mortgage brokers, appraisers, loan correspondents and dealers, knowingly and materially violates any applicable provision of subsection (b), the Secretary may impose a civil money penalty on the mortgagee or lender, or such other person or entity, in accordance with this section. The penalty under this paragraph shall be in addition to any other available civil remedy or any available criminal penalty, and may be imposed whether or not the Secretary imposes other administrative sanctions. The penalty shall be in addition to any other available civil remedy or any available criminal penalty, and may be imposed whether or not the Secretary imposes other administrative sanctions.
The amount of the penalty, as determined by the Secretary, may not exceed $5,000 for each violation, except that the maximum penalty for all violations by any particular mortgagee or lender or such other person or entity during any 1-year period shall not exceed $1,000,000. Each violation of a [2] the provisions of subsection (b)(1) shall constitute a separate violation with respect to each mortgage or loan application. In the case of a continuing violation, as determined by the Secretary, each day shall constitute a separate violation.
In the case of the mortgagee’s failure to engage in loss mitigation activities, as provided in subsection (b)(1)(I), the penalty shall be in the amount of three times the amount of any insurance benefits claimed by the mortgagee with respect to any mortgage for which the mortgagee failed to engage in such loss mitigation actions.
The Secretary may impose a civil money penalty, as adjusted from time to time, under subsection (a) for any use of “Federal Housing Administration”, “Department of Housing and Urban Development”, “Government National Mortgage Association”, “Ginnie Mae”, the acronyms “HUD”, “FHA”, or “GNMA”, or any official seal or logo of the Department of Housing and Urban Development, by any person, party, company, firm, partnership, or business, including sellers of real estate, closing agents, title companies, real estate agents, mortgage brokers, appraisers, loan correspondents, and dealers, except as authorized by the Secretary.
If no hearing is requested within 15 days of receipt of the notice of opportunity for hearing, the imposition of the penalty shall constitute a final and unappealable determination. If the Secretary reviews the determination or order, the Secretary may affirm, modify, or reverse that determination or order. If the Secretary does not review the determination or order within 90 days of the issuance of the determination or order, the determination or order shall be final.
In determining the amount of a penalty under subsection (a), consideration shall be given to such factors as the gravity of the offense, any history of prior offenses (including those before December 15, 1989), ability to pay the penalty, injury to the public, benefits received, deterrence of future violations, and such other factors as the Secretary may determine in regulations to be appropriate.
The Secretary’s determination or order imposing a penalty under subsection (a) shall not be subject to review, except as provided in subsection (d).
After exhausting all administrative remedies established by the Secretary under subsection (c)(1), a mortgagee or lender or such other person or entity against whom the Secretary has imposed a civil money penalty under subsection (a) may obtain a review of the penalty and such ancillary issues (such as any administrative sanctions under 24 C.F.R. parts 24 and 25) as may be addressed in the notice of determination to impose a penalty under subsection (c)(1)(A) in the appropriate court of appeals of the United States, by filing in such court, within 20 days after the entry of such order or determination, a written petition praying that the Secretary’s determination or order be modified or be set aside in whole or in part.
The court shall not consider any objection that was not raised in the hearing conducted pursuant to subsection (c)(1) unless a demonstration is made of extraordinary circumstances causing the failure to raise the objection. If any party demonstrates to the satisfaction of the court that additional evidence not presented at the hearing is material and that there were reasonable grounds for the failure to present such evidence at the hearing, the court shall remand the matter to the Secretary for consideration of the additional evidence.
The decisions, findings, and determinations of the Secretary shall be reviewed pursuant to section 706 of title 5.
If any mortgagee or lender or such other person or entity fails to comply with the Secretary’s determination or order imposing a civil money penalty under subsection (a), after the determination or order is no longer subject to review as provided by subsections (c)(1) and (d), the Secretary may request the Attorney General of the United States to bring an action in an appropriate United States district court to obtain a monetary judgment against the mortgagee or lender or such other person or entity and such other relief as may be available. The monetary judgment may, in the court’s discretion, include the attorneys fees and other expenses incurred by the United States in connection with the action. In an action under this subsection, the validity and appropriateness of the Secretary’s determination or order imposing the penalty shall not be subject to review.
The Secretary may compromise, modify, or remit any civil money penalty which may be, or has been, imposed under this section.
For purposes of this section, a person acts knowingly when a person has actual knowledge of acts or should have known of the acts.
The Secretary shall issue such regulations as the Secretary deems appropriate to implement this section.
Notwithstanding any other provision of law, all civil money penalties collected under this section shall be deposited in the appropriate insurance fund or funds established under this chapter, as determined by the Secretary.
[1] So in original. Probably should be “this”.
[2] So in original. The word “a” probably should not appear.
2009—Subsec. (b)(1). Pub. L. 111–22, § 203(f)(1)(A)(i), inserted “or any of its owners, officers, or directors” after “mortgagee or lender” in introductory provisions.
Subsec. (b)(1)(H). Pub. L. 111–22, § 203(f)(1)(A)(ii), substituted “subchapter I or II of this chapter, or any implementing regulation, handbook, or mortgagee letter that is issued under this chapter.” for “subchapter I, II, or IX–A (as such subchapter existed immediately before December 15, 1989) of this chapter or any implementing regulation or handbook that is issued under this chapter.”
Subsec. (b)(1)(K), (L). Pub. L. 111–22, § 203(f)(1)(A)(iii), added subpars. (K) and (L).
Subsec. (b)(2)(D). Pub. L. 111–22, § 203(f)(1)(B), added subpar. (D).
Subsec. (b)(3). Pub. L. 111–22, § 203(f)(1)(C), amended par. (3) generally. Prior to amendment, text read as follows: “Before taking action to impose a civil money penalty for a violation under paragraph (1)(D) or (F), or paragraph (2)(A), (B), or (C), the Secretary shall inform the Attorney General of the United States.”
Subsec. (g). Pub. L. 111–22, § 203(f)(2), substituted “For purposes of this section, a person acts knowingly when a person has actual knowledge of acts or should have known of the acts.” for “The term ‘knowingly’ means having actual knowledge of or acting with deliberate ignorance of or reckless disregard for the prohibitions under this section.”
2006—Subsec. (b)(1)(B)(ii). Pub. L. 109–173 substituted “Deposit Insurance Fund” for “Bank Insurance Fund for banks and through the Savings Association Insurance Fund for savings associations”.
Pub. L. 109–171 repealed Pub. L. 104–208, § 2704(d)(13)(B). See 1996 Amendment note below.
2004—Subsec. (b)(1)(J). Pub. L. 108–447 added subpar. (J).
1998—Subsec. (a)(2). Pub. L. 105–276, § 601(g), inserted second paragraph.
Subsec. (b)(1)(I). Pub. L. 105–276, § 601(h), which directed the addition of subpar. (I) after subpar. “(h)”, was executed by adding subpar. (I) after subpar. (H), to reflect the probable intent of Congress.
1997—Pub. L. 105–65, § 553(a), amended section catchline generally, substituting “mortgagees, lenders, and other participants in FHA programs” for “mortgagees and lenders”.
Subsec. (a)(1). Pub. L. 105–65, § 553(b)(1), substituted “If a mortgagee approved under the chapter, a lender holding a contract of insurance under subchapter I, or a principal, officer, or employee of such mortgagee or lender, or other person or entity participating in either an insured mortgage or subchapter I loan transaction under this chapter or providing assistance to the borrower in connection with any such loan, including sellers of the real estate involved, borrowers, closing agents, title companies, real estate agents, mortgage brokers, appraisers, loan correspondents and dealers, knowingly and materially violates any applicable provision of subsection (b), the Secretary may impose a civil money penalty on the mortgagee or lender, or such other person or entity, in accordance with this section. The penalty under this paragraph shall be in addition to any other available civil remedy or any available criminal penalty, and may be imposed whether or not the Secretary imposes other administrative sanctions.” for “Whenever a mortgagee approved under this chapter, or a lender holding a contract of insurance under subchapter I of this chapter, knowingly and materially violates any of the provisions of subsection (b), the Secretary may impose a civil money penalty on the mortgagee or lender in accordance with the provisions of this section.”
Subsec. (a)(2). Pub. L. 105–65, § 553(b)(2), inserted “or such other person or entity” after “lender” in first sentence and substituted “the provisions of subsection (b)(1)” for “provision of subsection (b)(1)” in second sentence.
Subsec. (b)(2). Pub. L. 105–65, § 553(c)(1), (2), added par. (2) and redesignated former par. (2) as (3).
Subsec. (b)(3). Pub. L. 105–65, § 553(c)(1), (3), redesignated par. (2) as (3) and substituted “or (F), or paragraph (2)(A), (B), or (C)” for “or paragraph (1)(F)”.
Subsec. (c)(1)(B). Pub. L. 105–65, § 553(d)(1), inserted “or such other person or entity” after “lender”.
Subsec. (d)(1). Pub. L. 105–65, § 553(d)(2), inserted “or such other person or entity” after “lender” and substituted “parts 24 and 25” for “part 25”.
Subsec. (e). Pub. L. 105–65, § 553(d)(3), inserted “or such other person or entity” after “lender” in two places.
1996—Subsec. (b)(1)(B)(ii). Pub. L. 104–208, § 2704(d)(13)(B), which directed the amendment of section 526(b)(1)(B)(ii) of the National Housing Act by substituting “Deposit Insurance Fund” for “Bank Insurance Fund for banks and through the Savings Association Insurance Fund for savings associations” and which substitution was probably intended by Congress to be made in subsec. (b)(1)(B)(ii) of this section, section 536 of the National Housing Act, was repealed by Pub. L. 109–171. See Effective Date of 1996 Amendment note below and 2006 Amendment note above.
Amendment by Pub. L. 109–173 effective Mar. 31, 2006, see section 9(j) of Pub. L. 109–173, set out as a note under section 24 of this title.
Amendment by Pub. L. 109–171 effective no later than the first day of the first calendar quarter that begins after the end of the 90-day period beginning Feb. 8, 2006, see section 2102(c) of Pub. L. 109–171, set out as a Merger of BIF and SAIF note under section 1821 of this title.
Amendment by Pub. L. 104–208 effective Jan. 1, 1999, if no insured depository institution is a savings association on that date, see section 2704(c) of Pub. L. 104–208, formerly set out as a note under section 1821 of this title.
Pub. L. 101–235, title I, § 107(b), Dec. 15, 1989, 103 Stat. 2003, provided that:
Pub. L. 105–65, title V, § 541, Oct. 27, 1997, 111 Stat. 1412, provided that:
LII has no control over and does not endorse any external Internet site that contains links to or references LII.