HUD Handbook 4000.1 III.A.2.c — Late Charges

hud-4000-1-iii-a-2-c

HUD Single-Family Housing Policy Handbook 4000.1, Section III.A.2.c. See obligation entries for operative requirements and verbatim primary-source citations.

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source:
  type: regulation
  id: hud-4000-1-iii-a-2-c
  authority: HUD Handbook 4000.1 III.A.2.c — Late Charges
  description: |
    HUD Single-Family Housing Policy Handbook 4000.1, Section III.A.2.c.
    See obligation entries for operative requirements and verbatim
    primary-source citations.
obligations:
  - id: hud-4000-1-iii-a-2-c-late-charge-cap-4-percent
    canonical_id: hud-4000-1-iii-a-2-c-late-charge-cap-4-percent
    section: HUD Handbook 4000.1 III.A.2.c.ii — Late Charge Cap (Case Numbers On or After March 14, 2016)
    description: |
      For Mortgages assigned a case number on or after March 14, 2016,
      [LENDER] may assess a Late Charge not to exceed 4 percent of the
      overdue payment of P&I, and in accordance with applicable state and
      federal laws.
    type: dont
    audit_question: For every FHA-insured Mortgage assigned a case number on or after March 14, 2016, can [LENDER] evidence that no Late Charge exceeded 4 percent of the overdue P&I, and that all Late Charge assessments complied with applicable state and federal laws?
    program_review: Does the program account for the case-number-date condition — ensuring no Late Charge on a post-3/14/2016 case exceeds 4% of overdue P&I and complies with applicable state/federal law?
    file_review: Pull post-3/14/2016 cases with Late Charges; confirm each charge is <= 4% of overdue P&I and law-compliant.
    judgment: false
    feeds: []
    workflow_phase: servicing
    owner_role: default_servicing_analyst
    secondary_owner_role: compliance_officer
    cadence: per-late-charge-assessment
    consequence: ''
    tags:
      - round-b
      - regulator-direct
      - hud-handbook-4000-1
      - fha
      - servicing
      - late-charge
      - fee-cap
      - promoted
    primary_source:
      tier: 1
      authority: HUD Handbook 4000.1 III.A.2.c.ii — Standard
      source_class: hud-handbook-4000-1
      source_url: https://www.hud.gov/hud-partners/single-family-handbook-4000-1
      snapshot_id: 8c03836f77f317e1
      fetched_at: '2026-05-23T00:28:40Z'
      content_hash: sha256:411430f29b13f9b54a2ebb0e6f6e7087ecd2b90d0da22eb0c8c792eaa2d7d0df
      paragraph_quote: 'For Mortgages assigned a case number on or after March 14, 2016, the Mortgagee may '
      drafter_attestation: Copied verbatim from HUD Handbook 4000.1 snapshot 8c03836f77f317e1 (III.A.2.c.ii) at 2026-05-23.
    promoted_at: '2026-05-23T00:42:24+00:00'
    promoted_from: hud-4000-1-iii-a-2-c-roundb-v1.yaml
  - id: hud-4000-1-iii-a-2-c-advance-notice-before-late-charge-collection
    canonical_id: hud-4000-1-iii-a-2-c-advance-notice-before-late-charge-collection
    section: HUD Handbook 4000.1 III.A.2.c.ii(A) — Notifying the Borrower of the Late Charge
    description: |
      Before collecting the Late Charge or returning a Mortgage Payment to
      the Borrower for failing to pay the Late Charge, [LENDER] must
      provide the Borrower with an advance written notice of the charge.
    type: do
    audit_question: For every FHA-insured Mortgage where [LENDER] collected a Late Charge or returned a Mortgage Payment for failure to pay a Late Charge, can [LENDER] evidence prior delivery of an advance written notice of the charge to the Borrower?
    program_review: Do the P&Ps ensure an advance written notice of the charge precedes collecting any Late Charge or returning a payment for nonpayment of a Late Charge?
    file_review: Pull files with a collected Late Charge or returned payment; confirm prior delivery of the advance written notice.
    judgment: false
    feeds: []
    workflow_phase: servicing
    owner_role: default_servicing_analyst
    secondary_owner_role: compliance_officer
    cadence: per-late-charge-assessment
    consequence: ''
    tags:
      - round-b
      - regulator-direct
      - hud-handbook-4000-1
      - fha
      - servicing
      - late-charge
      - advance-notice
      - promoted
    primary_source:
      tier: 1
      authority: HUD Handbook 4000.1 III.A.2.c.ii(A) — Notifying the Borrower of the Late Charge
      source_class: hud-handbook-4000-1
      source_url: https://www.hud.gov/hud-partners/single-family-handbook-4000-1
      snapshot_id: 8c03836f77f317e1
      fetched_at: '2026-05-23T00:28:40Z'
      content_hash: sha256:411430f29b13f9b54a2ebb0e6f6e7087ecd2b90d0da22eb0c8c792eaa2d7d0df
      paragraph_quote: 'Before collecting the Late Charge or returning a Mortgage Payment to the Borrower '
      drafter_attestation: Copied verbatim from HUD Handbook 4000.1 snapshot 8c03836f77f317e1 (III.A.2.c.ii(A)) at 2026-05-23.
    promoted_at: '2026-05-23T00:42:24+00:00'
    promoted_from: hud-4000-1-iii-a-2-c-roundb-v1.yaml
  - id: hud-4000-1-iii-a-2-c-late-charge-servicing-file-documentation
    canonical_id: hud-4000-1-iii-a-2-c-late-charge-servicing-file-documentation
    section: HUD Handbook 4000.1 III.A.2.c.iii — Required Documentation
    description: |
      [LENDER] must ensure that the Servicing File reflects any Late Charges
      assessed and includes any advance written notice of such charges sent
      to the Borrower.
    type: do
    audit_question: For every FHA-insured Mortgage with assessed Late Charges, does the Servicing File reflect the charges and include the advance written notice sent to the Borrower?
    program_review: Do the P&Ps ensure the Servicing File reflects every Late Charge assessed and includes the advance written notice sent to the Borrower?
    file_review: Pull files with assessed Late Charges; confirm the Servicing File reflects the charge and includes the advance written notice.
    judgment: false
    feeds: []
    workflow_phase: servicing
    owner_role: default_servicing_analyst
    secondary_owner_role: compliance_officer
    cadence: per-late-charge-assessment
    consequence: ''
    tags:
      - round-b
      - regulator-direct
      - hud-handbook-4000-1
      - fha
      - servicing
      - late-charge
      - servicing-file
      - promoted
    primary_source:
      tier: 1
      authority: HUD Handbook 4000.1 III.A.2.c.iii — Required Documentation
      source_class: hud-handbook-4000-1
      source_url: https://www.hud.gov/hud-partners/single-family-handbook-4000-1
      snapshot_id: 8c03836f77f317e1
      fetched_at: '2026-05-23T00:28:40Z'
      content_hash: sha256:411430f29b13f9b54a2ebb0e6f6e7087ecd2b90d0da22eb0c8c792eaa2d7d0df
      paragraph_quote: 'The Mortgagee must ensure that the Servicing File reflects any Late Charges assessed '
      drafter_attestation: Copied verbatim from HUD Handbook 4000.1 snapshot 8c03836f77f317e1 (III.A.2.c.iii) at 2026-05-23.
    promoted_at: '2026-05-23T00:42:24+00:00'
    promoted_from: hud-4000-1-iii-a-2-c-roundb-v1.yaml
_promotion_history:
  - promoted_at: '2026-05-23T00:42:24+00:00'
    candidate_path: obligations\_remediation\_round_b_drafts\hud-4000-1-iii-a-2-c-roundb-v1.yaml
    candidates_promoted: 3
    candidates_skipped_existing: 0

Verbatim regulatory text (3)

Verbatim provisions from HUD Handbook 4000.1 III.A.2.c — Late Charges — each quote is a verified substring of the regulator-published source snapshot, not retyped. Quoted for reference; this is not legal advice. The operational layer (P&P updates, prompts) lives in the regulation update kits.

HUD Handbook 4000.1 III.A.2.c.ii — Late Charge Cap (Case Numbers On or After March 14, 2016)

For Mortgages assigned a case number on or after March 14, 2016, the Mortgagee may

Source: HUD Handbook 4000.1 III.A.2.c.ii — Standard · source URL · snapshot 8c03836f77f317e1

HUD Handbook 4000.1 III.A.2.c.ii(A) — Notifying the Borrower of the Late Charge

Before collecting the Late Charge or returning a Mortgage Payment to the Borrower

Source: HUD Handbook 4000.1 III.A.2.c.ii(A) — Notifying the Borrower of the Late Charge · source URL · snapshot 8c03836f77f317e1

HUD Handbook 4000.1 III.A.2.c.iii — Required Documentation

The Mortgagee must ensure that the Servicing File reflects any Late Charges assessed

Source: HUD Handbook 4000.1 III.A.2.c.iii — Required Documentation · source URL · snapshot 8c03836f77f317e1