Section 1005.611 - HUD imposed penalties(a)Prohibited penalty pass through. The Holder, Direct Guarantee Lender or Servicer shall not recover or attempt to recover from the Borrower any penalties HUD imposes upon the Holder, Direct Guarantee Lender or Servicer.(b)Failure of Direct Guarantee Lender to timely remit Up-Front loan guarantee to HUD.(1) The Direct Guarantee Lender shall include a late fee if the Up-Front Loan Guarantee Fee is not remitted to HUD within 15 days of settlement.(2) Failure to remit the Up-Front Loan Guarantee Fee, with a late fee where applicable, may result in HUD rejecting the endorsement or Claim case binder.(c)Failure of Servicer to timely remit the monthly installment of the Annual Loan Guarantee Fee to HUD.(1) The Servicer shall include a late fee for each monthly installment of the Annual Loan Guarantee Fee remitted to HUD after the15th of each month.(2) Failure to remit monthly installment of the Annual Loan Guarantee Fee to HUD, with late fee, may result in HUD rejecting the Claim case binder, where applicable.(d)Failure of Servicer to adjust the amount of the Annual Loan Guarantee Fee.(1) When a Servicer fails to make the annual adjustment to the amount of the monthly installment of the Annual Loan Guarantee Fee in accordance with § 1005.607(b) , the Holder shall, in addition to reimbursing the Borrower as required in § 1005.609(c) , pay HUD a penalty for each month the Servicer collects an overpayment of the Annual Loan Guarantee Fee.(2) The Servicer shall provide annual written notice, in the manner prescribed by Section 184 Program Guidance to the Borrower prior to the scheduled change in the monthly installment of the Annual Loan Guarantee Fee, with such advance notice as required by 12 CFR 1026.9 , or other applicable Federal law.(e)Failure to cease collection of the Annual Loan Guarantee Fee. When a Servicer fails to cease collection of the monthly installment of the Annual Loan Guarantee Fee after the loan to value ratio reaches the threshold described in § 1005.609(d) , the Holder shall, in addition to reimbursing the Borrower as required in § 1005.609(d) , pay HUD a penalty for each month the Servicer collects an overpayment of the Annual Loan Guarantee Fee.(f)Late fee and penalty amounts. Late fees and penalty amounts under this section shall be prescribed by HUD in Section 184 Program Guidance.