03-31276. Privacy Act of 1974; Establishment of a New System of Records

AGENCY:

Office of the Chief Information Officer, HUD.

ACTION:

Notification of the establishment of a new system of records.

SUMMARY:

Pursuant to the provision of the Privacy Act of 1974 (5 U.S.C. 552a), HUD is giving notice that it proposes to establish a new system of records entitled the “Single Family Neighborhood Watch Early Warning System” (NW). HUD staff and lenders use NW to monitor default and claim rates on FHA insured loans for FHA-approved lenders and FHA programs. The system includes records from individuals who have obtained a mortgage insured under HUD/FHA's single-family mortgage insurance programs. It also includes records from individuals involved in the HUD/FHA single-family loan origination process. Specifically, records contained in the system include borrowers' name, property address, Social Security Number or other identifying numbers. NW is a Web-based query tool that displays summary and loan level origination, default and claim information by originating, sponsoring, principal, and agent lenders for two-year periods by beginning amortization date for FHA insured loans, etc.

DATES:

Effective Date: This proposal shall become effective without further notice on January 20, 2004, unless comments are received on or before that date which would result in a contrary determination.

Comments Due Date: January 20, 2004.

ADDRESSES:

Interested persons are invited to submit comments regarding this notice to the Rules Docket Clerk, Office of General Counsel, Room 10276, Department of Housing and Urban Development, 451 7th Street, SW., Washington, DC 20410-0050. Communications should refer to the above docket number and title. Comments submitted by facsimile (Fax) will not be accepted. A copy of each communication submitted will be available for public inspection and copying between 7:30 a.m. and 5:30 p.m. weekdays at the above address.

FOR FURTHER INFORMATION CONTACT:

For Privacy Act Information: Jeanette Smith, Departmental Privacy Act Officer, Telephone Number [phone]. For Housing, Single Family Neighborhood Watch Early Warning System information, Phillip Murray, Director, Office of Lender Activities and Program Compliance, Office of Housing, Department of Housing and Urban Development, 451 7th Street, SW., Room B-133, Washington, DC 20410-8000; telephone [phone] (this is not a toll-free number). Persons with hearing- or speech-impairments may access this number via TTY by calling the toll-free Federal Information Relay Services at 1-800-877-8339.

SUPPLEMENTARY INFORMATION:

HUD's Office of Lender Activities and Program Compliance (LAPC) is responsible for monitoring FHA approved lenders to ensure that they follow HUD guidelines when they originate, sponsor, and/or service FHA insured loans. In addition, LAPC is responsible for implementing HUD's Credit Watch Termination initiative that allows HUD to terminate the origination approval agreement of lender branches whose default and claim rate exceeds the field offices default and claim rate by 200% or more. HUD staff use NW to target FHA approved lenders for on-site monitoring reviews and to evaluate lender performance relative to HUD's Credit Watch Termination initiative. HUD also uses the Appraiser performance information that is currently only available to HUD staff, to evaluate Appraiser performance.

Authority: 5 U.S.C. 552a; 88 Stat. 1896; 42 U.S.C. 3535(d).

Dated: December 4, 2003.

Gloria R. Parker,

Chief Technology Officer.

HUD/HS-16

SYSTEM NAME:

Single Family Neighborhood Watch Early Warning System (NW).

SYSTEM LOCATION:

The system's databases and coldfusion code are located in Lanham, MD.

CATEGORIES OF INDIVIDUALS COVERED BY THE SYSTEM:

Individuals who have obtained a mortgage insured under HUD/FHA's single-family mortgage insurance programs. Additionally, individuals involved in the HUD/FHA single-family loan origination process.

CATEGORIES OF RECORDS IN THE SYSTEM:

Records consist of the borrower's name, property address, Social Security Number or other identification number (ID). Also included in the records is originating, sponsoring, holder and servicer lender ID and name, mortgage amount, interest rate, front and back ratios, FHA ADP code, loan purpose, gift source and amount, loan closing and endorsement dates, default status, default reason, default date, post endorsement technical review ratings, underwriter ID and name, appraiser ID and name, HUD indemnification information, and other data fields associated with an FHA Case Number.

AUTHORITY FOR MAINTENANCE OF THE SYSTEM:

Section 203, National Housing Act, Pub. L. 73-479.

PURPOSE(S):

NW enables HUD staff and lenders to monitor the default and claim rates on FHA insured loans for FHA-approved lenders and FHA programs. NW is designed to highlight exceptions—lenders, programs, loan characteristics and geographic areas with unusual originations or high defaults and claims on FHA insured loans. The loan level information is password protected and can only be viewed by HUD staff with a need to know and lenders who were the originator, sponsor, holder, or servicer on the loan.

ROUTINE USES OF RECORDS MAINTAINED IN THE SYSTEM, INCLUDING CATEGORIES OF USERS AND THE PURPOSES OF SUCH USES:

In addition to those disclosures generally permitted under 5 U.S.C. 552a(b) of the Privacy Act other routine uses include:

(a) To FHA approved mortgage institutions to monitor the default and claim rates on FHA insured loans. Mortgage institutions can only view the loan level information where they were the originator, sponsor, holder, or servicer on the loan.

POLICIES AND PRACTICES FOR STORING, RETRIEVING, ACCESSING, RETAINING, AND DISPOSING OF RECORDS IN THE SYSTEM:

STORAGE:

The NW records are stored on a Sybase 12.5 server HLANUDP001 in the database sfapps and on Sybase IQ server HUDDW database sfdw.

RETRIEVABILITY:

Records are retrieved by a manual or computer search on the number of originations, default, and defaults and claims from the Early Warnings menu option, by computer search on the counts in the Loss Mitigation—Current Defaults Reported display from the Servicing menu option, and by accessing the Late Endorsement, Pipeline/Uninsured, the Default Report by Servicer queries. Entering an FHA Case Number from the Case Status Query feature also retrieves case level detail.

SAFEGUARDS:

Automated records are maintained in secured areas. Access is limited to authorized personnel.

RETENTION AND DISPOSAL:

Neighborhood Watch retains up to 13 quarter end dates of two years of summary originations data, and three quarter end dates of loan level data.

SYSTEM MANAGER(S) AND ADDRESS:

Director, Quality Assurance Division, HULQ, Department of Housing and Urban Development, 451 Seventh Street, SW., Washington, DC 20410.

NOTIFICATION PROCEDURES:

For information, assistance, or inquiry about the existence of records, contact the Privacy Act Officer at the Department of Housing and Urban Development, 451 7th Street SW., Washington, DC. Written requests must include the full name, Social Security Number, date of birth, current address, and telephone number of the individual making the request.

CONTESTING RECORD PROCEDURES:

The Department's rules for contesting the contents of records and appealing initial denials, by the individual concerned, appear in 24 CFR part 16. If additional information or assistance is needed, it may be obtained by contacting: (i) in relation to contesting contents of records, the Privacy Act Officer at the appropriate location. A list of all locations is given in appendix A; (ii) in relation to appeals of initial denials, the HUYD Department Privacy Appeals Officer, Office of General Counsel Department of Housing and Urban Development, 451 Seventh Street, SW., Washington, DC 20410.

RECORD SOURCE CATEGORIES:

Information may be collected from HUD, program participants, and subject individuals.

EXEMPTIONS FROM CERTAIN PROVISIONS OF THE ACT:

None.