(a) All fees and expenses charged to a veteran receiving a loan under this program must be approved by the board, including fees, expenses, and interest rates charged by the participating lending institution on its portion of the loan to the veteran. Fees and expenses approved by the board may be made a part of the veteran's loan installment payments. All fees and expenses will be provided for in the program and servicing guide, which is promulgated by the housing program administrator and approved by the board. This is not an exclusive listing of all fees and expenses which may be charged. However, the imposition and amount of any fee or expense shall be consistent with the prudent lending practices prevalent in the residential mortgage lending industry, and shall be consistent with such practices to the maximum extent practical. Among the fees which may be charged are:
- (1) appraisal;
- (2) certification;
- (3) closing fee;
- (4) contractor certification;
- (5) courier fee;
- (6) credit investigation;
- (7) discount fee;
- (8) file service;
- (9) legal/attorney's fee;
- (10) loan origination fee;
- (11) mortgagee's title policy;
- (12) participant fee;
- (13) pest inspection;
- (14) prepaid FHA insurance;
- (15) prepaid interest;
- (16) recording;
- (17) survey;
- (18) tax certificates;
- (19) title report.
- (b) All fees and expenses charged to a participating lending institution by the administrator under this program must be approved by the board.
- (c) Within a reasonable period of time, the board shall either approve or disapprove all fees, expenses, and interest rates to be charged by a participating lending institution. All fees, expenses, and interest rates shall be limited to the maximum extent practical to those which would be collected by the participating lending institution in the normal course of its residential mortgage lending business. The administrator shall incorporate in its guidelines for participating lending institutions provisions for the maximum fees, expenses, and interest rates which may be charged. In the alternative, the administrator shall incorporate in said guidelines the procedures for computing the maximum fees, expenses, and interest rates which participating lending institutions may charge veterans. The contracts between the board and the participating lending institutions shall incorporate the administrator's guidelines as to fees, expenses, and interest rates.
- (d) Violation by a participating lending institution of the board's requirements as to maximum fees, expenses, and interest rates may result in revocation of the board's approval of the lending institution as a participant in the program, or such other remedies as may be available to the board.
- (e) The interest rate charged by the board shall be set to provide a margin over the rate paid on the bonds issued under this program and the margin shall be used in whole or in part to defray the expenses of administering the program by the board, the administrator, and the participating lending institutions.
- (f) The board may require that the veteran make a down payment not to exceed 5.0% of the total purchase price of the home. This down payment shall be paid to the participating lending institution at closing. In the alternative, the board may require a down payment not to exceed 5.0% of the board's portion of the loan to be paid to the board. In this event, the veteran shall satisfy the participating lending institution's requirements as to down payment for the particular type of loan being made by the participating lending institution.
- (g) Principal and interest that becomes delinquent shall bear penalty interest at a rate fixed by the board on its portion of the loan. The participating lending institution may set late payment penalties as permitted by law on its portion of the loan.
Source Note:The provisions of this §177.9 adopted to be effective May 4, 1984, 9 TexReg 2263; amended to be effective November 29, 1991, 16 TexReg 6649.