Failure To Engage in Loss Mitigation

I'm still trying to figure this out. If anyone reading this has good information please email me. paularush@comcast.net  Today I spoke with someone who explained that this loss mitigation only covers HUD loans. However I'm confused because I thought 24 CFR code covered all "federally related  mortgages." So if anyone knows the answer, please email me. I'm also researching if any additional federal or state laws would apply to loss mitigation. The person I spoke with was very helpful and she took the time to research and get back to me. If you have any good sources please pass them along.

Treble Damages Rule
A final rule that established new penalties on lenders that fail to engage in loss mitigation was published. The penalties amount to three times the amount of a foreclosure claim submitted by a lender. Loss mitigation is not only a critical tool to assist borrowers; it is also a critical tool in preventing subsequent predatory practices. Delinquent borrowers who are not offered meaningful loss mitigation are vulnerable targets for predatory refinance schemes and deed theft scams from so-called foreclosure consultants who falsely promise to save borrowers from foreclosure.

12 24 CFR Parts 30 & 203 Treble Damages Rule for Failure to Engage in Loss Mitigation,
effective May 26, 2005.

TITLE 24--HOUSING AND URBAN DEVELOPMENT PART 30--CIVIL MONEY PENALTIES: CERTAIN PROHIBITED CONDUCT--Table of Contents Subpart A--General Sec. 30.1 Purpose and scope.

Unless provided for elsewhere in this title or under separate authority, this part implements HUD's civil money penalty provisions. The procedural rules for hearings under this part are set forth in 24 CFR part 26, subpart B. 24 CFR Subpart B--Violations Sec. 30.60
Dealers or loan correspondents.
(a) General. The Assistant Secretary for Housing-Federal Housing Commissioner, or his or her designee, may initiate a civil money penalty action against any dealer or loan correspondent who violates section
2(b)(7) of the National Housing Act (12 U.S.C. 1703). Such violations include, but are not limited to:
(1) Falsifying information on an application for dealer approval or reapproval submitted to a lender;
(2) Falsifying statements on a HUD credit application, improvement contract, note, security instrument, completion certificate, or other loan document;
(3) Failing to sign a credit application if the dealer or loan correspondent assisted the borrower in completing the application;
(4) Falsely certifying to a lender that the loan proceeds have been or will be spent on eligible improvements;
(5) Falsely certifying to a lender that the property improvements have been completed;
(6) Falsely certifying that a borrower has not been given or promised any cash payment, rebate, cash bonus, or anything of more than nominal value as an inducement to enter into a loan transaction;
(7) Making a false representation to a lender with respect to the creditworthiness of a borrower or the eligibility of the improvements for which a loan is sought.
(b) Continuing violation. Each day that a violation continues shall constitute a separate violation.
(c) Amount of penalty. The maximum penalty is $5,500 for each violation, up to a limit for any particular person of $1,100,000 during any one-year period.

TITLE 24--HOUSING AND URBAN DEVELOPMENT PART 30--CIVIL MONEY PENALTIES: CERTAIN PROHIBITED CONDUCT--Table of Contents Subpart B--Violations Sec. 30.60

Dealers or loan correspondents. (a) General. The Assistant Secretary for Housing-Federal Housing Commissioner, or his or her designee, may initiate a civil money penalty action against any dealer or loan correspondent who violates section 2(b)(7) of the National Housing Act (12 U.S.C. 1703). Such violations include, but are not limited to:
(1) Falsifying information on an application for dealer approval or reapproval submitted to a lender;
(2) Falsifying statements on a HUD credit application, improvement contract, note, security instrument, completion certificate, or other loan document;
(3) Failing to sign a credit application if the dealer or loan correspondent assisted the borrower in completing the application;
(4) Falsely certifying to a lender that the loan proceeds have been or will be spent on eligible improvements;
(5) Falsely certifying to a lender that the property improvements have been completed;
(6) Falsely certifying that a borrower has not been given or promised any cash payment, rebate, cash bonus, or anything of more than nominal value as an inducement to enter into a loan transaction;
(7) Making a false representation to a lender with respect to the creditworthiness of a borrower or the eligibility of the improvements for which a loan is sought.
(b) Continuing violation. Each day that a violation continues shall constitute a separate violation.
(c) Amount of penalty. The maximum penalty is $5,500 for each violation, up to a limit for any particular person of $1,100,000 during any one-year period. 1347.

TREBLE DAMAGES FOR FAILURE TO ENGAGE IN LOSS MITIGATION (FR-4553)
 Agency: Department of Housing and Urban Development (HUD)/Office of the Secretary (HUDSEC)

Priority: Other Significant Legal Authority: /cgi-bin/ua/usc?var=12USC171512 USC 1715u; /cgi-bin/ua/usc?var=12USC173512 USC 1735f-14; /cgi-bin/ua/usc?var=12USC170112 USC 1701q-1; /cgi-bin/ua/usc?var=12USC170312 USC 1703; 1735f-15; /cgi-bin/ua/usc?var=15USC171715 USC 1717a; /cgi-bin/ua/usc?var=28USC264128 USC 2641 note; /cgi-bin/ua/usc?var=12USC170912 USC 1709; /cgi-bin/ua/usc?var=12USC171012 USC 1710; /cgi-bin/ua/usc?var=12USC171512 USC 1715b; /cgi-bin/ua/usc?var=42USC353542 USC 3535(d)

CFR Citation: (To search for a specific CFR, visit the Code of Federal Regulations.)

24 CFR 30; 24 CFR 203
Legal Deadline: None Abstract: This final rule will amend HUD's civil money penalty regulations to reflect HUD's authorization to impose treble damages on a mortgagee for any mortgage for which the mortgagee had a duty but failed to engage in appropriate loss mitigation actions. The rule follows publication of a proposed rule, takes consideration of the public comments received on the proposed rule, but makes no changes at this final rule stage. Timetable: Action Date FR Cite ANPRM 12/06/00 65 FR 76520 ANPRM Comment Period End 02/05/01 NPRM 04/14/04 69 FR 19906 NPRM Comment Period End 06/14/04
Final Action 08/00/05 Regulatory Flexibility Analysis Required: No Small Entities Affected: No Government Levels Affected: None Agency Contact: Michael Reyes, Office of the Deputy Assistant Secretary for Single Family Housing, Office of Housing, Department of Housing and Urban Development Phone: 405 609-8475 RIN: 2501-AC66 15 USC Sec. 1717 01/03/05 -

EXPCITE- TITLE 15 - COMMERCE AND TRADE CHAPTER 42 - INTERSTATE LAND SALES -HEAD- Sec. 1717. Penalties for violations -STATUTE- Any person who willfully violates any of the provisions of this chapter, or the rules and regulations prescribed pursuant thereto, or any person who willfully, in a statement of record filed under, or in a property report issued pursuant to, this chapter, makes any untrue statement of a material fact or omits to state any material fact required to be stated therein, shall upon conviction be fined not more than $10,000 or imprisoned not more than five years, or both. -SOURCE- (Pub. L. 90-448, title XIV, Sec. 1418, Aug. 1, 1968, 82 Stat. 598; Pub. L. 96-153, title IV, Sec. 408, Dec. 21, 1979, 93 Stat. 1132.) -MISC1- AMENDMENTS 1979 - Pub. L. 96-153 substituted "$10,000" for "$5,000". EFFECTIVE DATE OF 1979 AMENDMENT Amendment by Pub. L. 96-153 effective on effective date of regulations implementing such amendment, but in no case later than six months following Dec. 21, 1979, see section 410 of Pub. L. 96-153, set out as a note under section 1701 of this title.