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U. S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
WASHINGTON, D. C. 20410-8000

April 6, 1988
OFFICE OF THE ASSISTANT SECRETARY FOR
HOUSING-FEDERAL HOUSING COMMISSIONER
Mortgagee Letter 88-9
TO:       ALL APPROVED MORTGAGEES
SUBJECT:  Establishment of Allowable Fees for Assumptions (All Single
          Family Programs)
 
     Mortgagee Letter 86-15  dated August 8, 1986, standardized the
fee to which mortgagees are entitled, to a maximum of up to $500 for
processing assumptions of mortgages which require creditworthiness
processing of a new buyer, (i.e., 2210 procedure).
 
     Since modified assumption provisions became effective with the
enactment of the Housing and Community Development Act of 1987,
Headquarters is establishing the following maximum fees which
include, if the lender elects to release the seller from liability,
the cost of the completion and execution of the FHA Form 2210.1.
 
1)   Assumption with request for HUD's consent
     to accept the purchaser and release the seller
     from liability - 2210 procedure (mortgages
     originated prior to December 1, 1986 and
     mortgages originated on or after December 1,
     1986.----------------------------------a maximum of up to $500
 
2)   Assumption of a Section 235 mortgage with a
     request for HUD's consent to accept the purchaser
     and release the seller from liability - 2210
     procedure with subsidy eligibility
     processing----------------------------a maximum of up to $500
 
     The above fees may be retained by the mortgagee if the buyer's
credit is rejected and HUD's consent to release from liability is
denied.  However, if the purchaser's credit is approved but a closing
of the sale does not occur for reasons beyond the control of the
purchaser, the mortgagee will be required to refund one-half of the
collected fee.
 
     Fees or charges for such things as credit reports and VOE's
which are collected by the lender and passed through are eligible
expenses separate from the processing fees.  These fees are non-
refundable.
 
     Fees necessary to "close" the assumption purchase, such as,
document preparation fees, attorney fees, recording fees, etc., are
permitted to be charged the mortgagor in accordance with local Field
Office fee schedules.
 
     Lenders and Field Office staff are advised that they must
process the 2210 and, where appropriate 2210.1, applications in an
expeditious manner to ensure that a sale is not lost due to
unnecessary delays in implementing our requirements.
 
     We make no distinction between direct and non-direct endorsement
lenders in establishing these fees.  Direct endorsement lenders are
reminded, however, that they are not authorized agents of HUD and
cannot execute documents in HUD's name or on HUD's behalf.
 
     Headquarters has also reviewed other related services provided
by the lender and we are establishing fees for the following:
 
     1)   Simple assumption......................remains at $45.00
 
     2)   Simple assumption with Section 235
          eligibility processing--------a maximum of up to $150.00
 
     ALTHOUGH THE LOCAL MARKET SHOULD PREVAIL IN THE ASSESSMENT OF
FEES, FIELD OFFICES ARE NOT AUTHORIZED TO LIMIT FURTHER OR ADJUST ANY
FEES ESTABLISHED BY HEADQUARTERS IN THIS LETTER.
 
     If you have questions concerning this letter, please contact the
Single Family Insured Servicing Branch at (202) 755-7330.
 
                              Sincerely,
                              Thomas T. Demery
                              Assistant Secretary