www.hudclips.org 


U. S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
WASHINGTON, D. C. 20410

April 4, 1984
OFFICE OF THE ASSISTANT SECRETARY FOR
HOUSING-FEDERAL HOUSING COMMISSIONER
Mortgagee Letter 84-10
TO:  ALL APPROVED MORTGAGEES
SUBJECT:  Single Family Claims for Insurance Benefits
 
     Mortgagees are reminded that only foreclosure, acquisition, and
conveyance costs actually paid by the mortgagee may be claimed on
Form HUD-2767, Fiscal Data to Support Claim for Insurance Benefits.
 
     Specifically, some mortgagees are charging HUD for foreclosure
trustee fees in excess of amounts actually paid by the mortgagee.  In
some areas, the trustee will bill the mortgagee for its fee, which is
paid by the mortgagee, but then the trustee will refund or "rebate" a
portion of that fee to the lender.  The refunded amount does not
represent a cost or fee which the mortgagee paid out, regardless of
the fact that the lender may have issued payment to the trustee for a
larger sum. Therefore, only the net amount may be claimed by the
lender, as that is the actual cost to the lender.
 
     It is not HUD's intent to reimburse mortgagees for expenses
which were neither incurred nor actually paid.  Trustee fees are no
exception.  The refund may not be made a part of the reimbursable
amount due the lender on its claim, and HUD will consider only the
"net" as the actual cost paid.
 
     Any mortgagees now claiming amounts for trustee fees in cases
where refunds are received must cease doing so immediately. We remind
you that your signature on Form HUD-2767, Fiscal Data to Support
Claim for Insurance Benefits, represents your certification that
amounts claimed are for those costs which have actually been paid,
and that doing otherwise constitutes a false certification (24 CFR
203.402(f)).  The practice of rebates violates the National Housing
Act and the regulations, but it is also subject to civil action for
double damages and penalty under 31 USC §3729 and criminal action
under 18 USC 1010.  HUD views false certification as a serious matter
which could result in the imposition of sanctions against the
mortgagee and officers and employees who make such certifications.
 
     Questions on this matter should be directed to Richard B.
Buchheit, Director, Single Family Servicing Division, (202) 755-6672.
 
                                     Sincerely,
 
                                    Maurice L. Barksdale
                                    Assistant Secretary
 
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