(Sec. 7(d), 79 Stat. 670 (42 U.S.C. 3535(d)); sec. 2, 48 Stat. 1246, (12 U.S.C. 1703 as amended))

[36 FR 24493, Dec. 22, 1971, as amended at 37 FR 210, Jan. 7, 1972; 43 FR 50173, Oct. 27, 1978]

§ 201.10 Report of loans.

Loans shall be reported on the prescribed form to the Federal Housing Administration at Washington, D.C., within 31 days from the date of the note or date upon which it was purchased. Any loan refinanced as provided in § 201.9 shall likewise be reported on the prescribed form within 31 days from the date of refinancing. Any loan transferred as provided in § 201.12(e) shall be reported on the prescribed form within 31 days from the date of such transfer. If the loan or note is not in default, the Commissioner may, in his discretion, accept a late report.

(a) Claim application. Claim for reimbursement for loss on an eligible loan shall be made on a form provided by the Commissioner, and executed by a duly qualified officer of the insured. The claim shall be accompanied by the insured's complete credit and collection file pertaining to the transaction.

(b) Claim after default. Claim may be filed after default, provided demand has been made upon the debtor for the full unpaid balance of the note. For the purpose of determining the date of default, any payments received on an account, including payment on judgments predicated thereon, shall be applied to the earliest unpaid installment.

(c) Maximum claim period. (1) Claim shall be filed no later than 6 months after the due date of the final installment provided for in the note.

(2) If at the time of default or at any time subsequent to the default a person primarily or secondarily liable for the repayment of a loan is a "person in military service" as such term is defined in the Soldier's and Sailor's Civil Relief Act of 1940, as amended, the period during which he is in military service shall be excluded in computing the time within which

claim is to be filed for reimbursement under the provisions of this section. (d) Extension of maximum claim period. Upon presentation to the Commissioner of the facts of a particular case within the allowable claim period prescribed in this section, he may, in his discretion, extend the time within which claim must be made, provided that in computing the claim no interest will be allowed for the period of such extension.

(e) Claim amount. An insured will be reimbursed for its losses on loans made in accordance with the regulations in this part up to the amount of its reserve as established by § 201.12. The amount of the reimbursement is determined by adding the items in paragraphs (e)(1), (2), (3), and (4) as follows:

(1) 90 percent of the net unpaid amount of the loan actually made or the actual purchase price of the note, whichever is the lesser.

(2) 90 percent of the uncollected interest earned up to the date of default plus 90 percent of the interest, computed at 7 percent per annum (5 percent per annum with respect to claims filed with the Commissioner prior to May 1, 1970) on the outstanding balance, computed from the date of default:

(i) To either the date of the claim application or for a period of 9 months and 31 days following such default date, whichever period of time is the lesser, or

(ii) To the date of certification of the claim for payment, in a case where an otherwise eligible claim has been held in suspense by the Commissioner pending a determination of the eligibility for insurance of other claims or loans, or by an investigation of the insured's loan or claim activities.

(3) Uncollected court costs, including fees paid for issuing, serving, and filing summons.

(4) Attorney's fees actually paid not exceeding:

(i) Twenty-five percent of the amount collected by the attorney on the defaulted note if the borrower is liable for the payment of such fee under the laws of the jurisdiction applicable to the note, and if the insured

has not waived its claim against the borrower for such fees.

(ii) $50 or 15 percent of the balance due on the note, whichever is the lesser if a judgment is secured by suit; or $10 or 15 percent of the balance due on the note, whichever is the lesser, if judgment is secured by confession after default.

(iii) $25 for expenses in recording of assignments of security to the United States.

(f) Assignment of documents. The note and any security held or judgment taken must be assigned in its entirety and if any claim has been filed in bankruptcy, insolvency, or probate proceedings, such claim shall likewise be assigned to the United States of America.

(g) Form of assignment. The following form of assignment properly dated shall be used in assigning a note, judgment, real estate mortgage, deed of trust, conditional sales contract chattel mortgage, mechanics' lien, or any other security device in event of claim:

All right, title, and interest of the undersigned is hereby assigned (without warranty, except that the note qualifies for insurance) to the United States of America.

By Title Date

(Financial Institution)

Provided, That if this form is not valid or generally acceptable in the jurisdiction involved, a form which is valid and generally acceptable shall be used.

(h) Recordation. Where security has been recorded the insured shall, prior to filing claim, place on record an assignment to the United States of America of said security.

(i) Election of action. Where a real estate mortgage, deed of trust, conditional sales contract, chattel mortgage, mechanics' lien, judgment lien, or any other security device has been used to secure the payment of a loan made under the provisions of Title I of the act, the insured may not, except with the approval of the Commissioner, both proceed against such security and also make claim under its contract of insurance, but shall elect which method it desires to pursue.

[36 FR 24493, Dec. 22, 1971, as amended at 37 FR 210, Jan. 7, 1972; 38 FR 30439, Nov. 5, 1973]

§ 201.12 Insurance reserve.

(a) Legal limit. Subject to the limitation on the Commissioner's authority to insure as stipulated in section 2 of Title I of the Act, the Commissioner, pursuant to the provisions of § 201.11, will reimburse any insured for losses sustained by it in accordance with the general insurance reserve provisions of paragraph (b) of this section.

(b) There shall be maintained for each insured a general insurance reserve which shall equal 10 percent of the aggregate amount advanced on all eligible loans originated by such insured pursuant to the provisions of the regulations in Subparts A, B, C, D, E, and F of this part on or after March 1, 1950, and prior to the expiration of the Commissioner's authority to insure under the provisions of this Act, less the amount of all claims approved for payment in connection with such loans and less the amount of any adjustment made pursuant to paragraph (c) of this section.

(c) Adjustment of general reserve. The amount of the general insurance reserve to the credit of each insured shall be adjusted on October 1 of each year by deducting therefrom an amount equivalent to 10 percent of the amount of such insurance reserve on the records of the Commissioner as of the date of such adjustment: Provided, That no such adjustment shall reduce the insurance reserve of any insured to an amount less than $15,000: However, no such adjustment shall be made in the insurance reserve of any financial institution until the first day of October next following the expiration of a period of 60 months after the issuance of a contract of insurance to such institution by the Commissioner, and no such adjustment shall be made in the insurance reserve of any financial institution after the termination of the contract of insurance issued to such institution by the Commissioner, or after the termination of the Commissioner's authority to insure against losses pursuant to Title I of the National Housing Act.

(d) Transfer of loans reported for insurance. The insured shall not assign or otherwise transfer any loan reported for insurance to a transferee not holding a contract of insurance under Title I of the National Housing Act: Provided, That nothing contained herein shall be construed to prevent the pledging of such loans as collateral security under a trust agreement, or otherwise, in connection with a bona fide loan transaction.

(e) Transfer of insurance reserve. Insurance reserve of more than $5,000 shall not be transferred to or from the reserve account of any insured during any fiscal year (October 1 through September 30) without the prior approval of the Commissioner. Except in cases involving the transfer of loans sold with recourse or under a guaranty, guarantee or repurchase agreement, the reports required by § 201.10 shall be submitted indicating the intent of the parties with respect to the transfer of the insurance reserve; and, unless the approval of the Commissioner is obtained, the insurance reserve shall be transferred as follows:

(1) In cases involving the transfer of notes purchased without recourse, guaranty, guarantee, or repurchase agreement, provided no installment payment is past due more than one calendar month at the time of purchase, reserve shall be transferred to the reserve of the purchasing institution, on the basis of 10 percent of the actual purchase price or net unpaid original advance, whichever is the lesser.

(2) In cases involving the transfer of notes purchased without recourse, guaranty, guarantee, or repurchase, agreement, where one or more installment payments are past due more than one calendar month at the time of purchase, the loans and reserves shall be transferred on an earmarked basis. In the case of earmarked transfers all reserves accrued by reason of the loans transferred shall be transferred, but such reserves shall be available only for payment of claims on the loans transferred, and claims on such loans can be paid only up to the amount of such earmarked reserves.

(3) In cases involving the transfer of notes sold with recourse or under a

guaranty, guarantee, or repurchase agreement, no insurance reserve will be transferred and no reports will be required.

(f) FHA recovery shall not affect reserve. Amounts which may be salvaged by the Commissioner with respect to a loan in connection with which an insured has been reimbursed under its contract of insurance shall not be added to the insurance reserve remaining to the credit of such insured.

(Sec. 7(d), 79 Stat. 670 (42 U.S.C. 3535(d)); sec. 2, 48 Stat. 1246, (12 U.S.C. 1703)) [36 FR 24493, Dec. 22, 1971, as amended at 42 FR 3839, Jan. 21, 1977; 45 FR 59867, Sept. 11, 1980]

§ 201.13 Insurance charge.

(a) Rate. The insured shall pay to the Commissioner on loans made or refinanced on or after August 1, 1968, an insurance charge equal to fifty onehundredths (0.50) of 1 percent per annum of the net proceeds of any eligible loan reported and acknowledged for insurance. In computing the insurance charge, no charge shall be made for the fractional period of a month of 14 days or less, and a charge for a full month shall be made for the fractional period of a month of more than 14 days.

(b) When payable. The insurance charge for the entire term shall be paid on loans having a maturity of 25 months or less within 25 days after the Commissioner's acknowledgement of the loan report. If the loan has a maturity of more than 25 months, the insurance charge shall be payable in installments. The first installment shall be equal to the charge for 1 year and shall be paid within 25 days of the acknowledgement of the loan report. The second and succeeding installments each equal to the charge for 1 year shall be paid within 25 days after billing by the Commissioner on an annual basis.

(1) Insurance charges not paid by the insured lender within the time period provided by this section shall include a late charge of four percent (4%) of the amount of the payment, except that no late charge shall be required with respect to any case for which HUD fails to render a proper

billing to the lender for the insurance charge.

(c) Notes transferred. Any adjustments of the insurance charge already paid on any obligation transferred between insureds shall be made by the insureds, except that any unpaid installments of the insurance charge shall be paid by the purchasing insured.

(d) Refund or abatement. There shall be no refund or abatement of any portion or installment of the insurance charge except:

(1) The charge on a refinanced note may be credited with the unearned portion of the charge on the original note;

(2) Insurance charges falling due after claim is filed or the note is prepaid in full;

(3) The charge paid on a loan or portion thereof found to be ineligible; but no refund shall be made unless a claim is denied by the Commissioner or the ineligibility is reported by the insured promptly upon discovery and an application for refund made. In no event shall charges be refunded where the application for refund is not made until after the loan is paid in full.

(e) When not chargeable to borrower. The insurance charge paid by the insured shall not be charged to the borrower if such charge would cause the total payments made by the borrower to exceed the maximum permissible amount which may be charged to the borrower for interest, discount, and all other charges in connection with the transaction.

(Sec. 7(d), 79 Stat. 670, 42 U.S.C. 3535(d)) [36 FR 24493, Dec. 22, 1971, as amended at 37 FR 18032, Sept. 6, 1972; 43 FR 60150, Dec. 26, 1978]

§ 201.14 Administrative reports and examination.

The Commissioner, or his authorized representative, may at any time call upon an insured for such reports as he may deem to be necessary in connection with the regulations in this part, or may inspect the books or accounts of the insured as they pertain to the loans reported for insurance.

§ 201.16 Flood insurance.

(a) After March 1, 1974, flood insurance coverage is required as a condition of obtaining or refinancing a loan when the building to be constructed, repaired or improved is in an area that has been identified by the Secretary as an area having special flood hazards and flood insurance for such area has been made available under the National Flood Insurance Act of 1968, as amended. The amount of flood insurance required need not exceed the outstanding principal balance of the loan and need not be required beyond the term of the loan.

(b) On or after July 1, 1975, no loan shall be made or refinanced for construction, repair or improvement of any building located in an area that has been identified by the Secretary as an area having special flood hazards unless the community in which the area is situated is participating in the National Flood Insurance Program, and such insurance is obtained by the borrower. The amount of flood insurance required need not exceed the principal balance of the loan and need not be required beyond the term of the loan.

[39 FR 9919, Mar. 15, 1974]

§ 201.17 Effective date.

The regulations in this part are effective as to all loans made on and after October 1, 1954, except that § 201.11(c)(2) and § 201.11(e)(4) shall be effective as to all claims paid on and after October 1, 1954, and § 201.12(c) shall be effective as to all

As used in the regulations in this part, the term

(a) "Act" means the National Housing Act.

(b) "Borrower" means a natural person who applies for and receives a loan for the purchase of a mobile home in reliance upon the provisions of the Act.

(c) "Certificate of origin" means a document establishing that a mobile home is free and clear of all legal encumbrances.

(d) "Commissioner" means the Federal Housing Commissioner or his duly authorized representative.

(e) "Contract of insurance" includes all of the provisions of the regulations in this subpart and the applicable provisions of the Act.

(f) "Form" means a document which is provided by or satisfactory to the Commissioner.

(g) "Insured" means a financial institution holding a contract of insurance under title I of the Act.

(h) "Loan" means an advance of funds or credit or the purchase of an obligation.

(i) "Manufacturer's invoice" means a document which is officially issued by the manufacturer stating the true wholesale price of a mobile home, its furnishings, equipment and accessories. The document shall be on a form which is in general use in the industry. (j) "Mobile home" means a movable dwelling unit designed and constructed for permanent occupancy by a single family which dwelling unit contains permanent eating, cooking, sleeping, and sanitary facilities.

(k) "Obligation" means evidence of monetary indebtedness.

(1) "Owner" means a borrower who has at least a one-half interest in the real property upon which the mobile home is placed, which interest is a fee simple title and such title may be subject to a mortgage, deed of trust or

borrower is a purchaser under a mutually binding recorded contract for the purchase of the real property, is rightfully in possession, and the purchase price is payable in equal installments.

(m) "Principal residence" means that place where the borrower expects to live at least 9 months of the year.

(n) "Actuarial method" means the method of allocating payments made on a debt between the amount financed and the finance charge, pursuant to which a payment is applied first to the accumulated finance charge, and any remainder is subtracted from, or any deficiency is added to, the unpaid balance of the amount financed.

(Sec. 7(d) 79 Stat. 670 (42 U.S.C. 3535(d)); sec. 2, 48 Stat. 1246 (12 U.S.C. 1703), as amended)

[36 FR 24493, Dec. 22, 1971, as amended at 42 FR 45305, Sept. 9, 1977]

§ 201.505 Purpose of subpart.

The provisions in this subpart contain the requirements under which an approved financial institution may obtain insurance of loans made for the purchase of mobile homes.

PROPERTY AND STRUCTURAL
REQUIREMENTS

§ 201.510

New or used mobile homes. The loan shall be made only for financing the purchase of a mobile home which is either new or used as follows:

(a) New. A new mobile home, meaning a unit that has not been previously occupied at the time of purchase.

(b) Used. A used mobile home, meaning either a unit being sold by one who acquired such unit with financing provided under this subpart; or a unit that the purchaser has been occupying pursuant to a lease from a governmental agency, if such purchaser had been displaced from previous housing as a result of a disaster which the President has determined to be a major disaster.

§ 201.515 Borrower's use of mobile home. The borrower shall establish, to the satisfaction of the Commissioner, that