www.hudclips.org 


U. S. Department of Housing and Urban Development
Washington, D.C. 20410-8000

August 12, 1991
OFFICE OF THE ASSISTANT SECRETARY
FOR HOUSING-FEDERAL HOUSING COMMISSIONER
MORTGAGEE LETTER 91-36
     TO:  ALL APPROVED MORTGAGEES
     SUBJECT:  COLLECTION OF INTEREST ON ONE-TIME MORTGAGE INSURANCE
                 PREMIUM PAYMENTS THAT WERE MADE LATE
 
     1.   Reminder of interest due the Department.
          Regulations governing one-time mortgage insurance premiums
          provide for two kinds of late payment penalties.  The late
          charge of 4 percent is owed if the premium payment is
          received more than 15 days after the closing date of the
          loan.  Interest is also owed if the premium payment is
          received more than 30 days after the closing date.  The
          annual interest rate is that set by the Department of the
          Treasury as the Value of Funds rate; it is assessed at a
          daily rate from the date of closing to the date premium
          payment was received.
 
     2.   Billing for interest due.
          While the payment of late charges has been closely
          controlled by the Department, we have not had the ability to
          bill for interest.  Nor has non-payment of interest held up
          the endorsement for insurance.  We have now examined our
          records back to the beginning of the program for interest
          which was due but not paid.
 
     3.   Role of GC Services.
          The Department has contracted with GC Services to reconcile
          our records with mortgagees and to collect any interest owed
          the Department.  Mortgagees may expect to receive periodic
          communications from GC Services.  The expected response is
          payment for interest owed or information that corrects our
          records.
 
          If you have any questions concerning interest due or the
     reconciliation of interest records, you may contact Mr. J.B. Ivey
     of GC Services at 713/460-2623.
 
                              Sincerely yours,
 
                              Arthur J Hill
                              Assistant Secretary for Housing-Federal
                                Housing Commissioner