[Federal Register Volume 62, Number 53 (Wednesday, March 19, 1997)]
[Rules and Regulations]
[Pages 12952-12953]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-6860]
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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
24 CFR Part 206
[Docket No. FR-2958-F-07]
RIN 2502-AF32
Home Equity Conversion Mortgage Insurance Demonstration:
Additional Streamlining; Correction
AGENCY: Office of the Assistant Secretary for Housing-Federal Housing
Commissioner, HUD.
ACTION: Final rule; Correction.
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SUMMARY: On September 17, 1996 (61 FR 49030), the Department issued a
final rule to the changes proposed on May 10, 1996, to the Home Equity
Conversion Mortgage (HECM) Insurance Demonstration. The final rule had
an effective date of October 17, 1996, except that the amendment to the
definition of ``principal limit'' in Sec. 206.3, had a delayed
effective date of January 5, 1997. On December 26, 1996 (61 FR 67930),
the Department further delayed the effective date of the definition of
``principal limit'' in Sec. 206.3 until May 1, 1997, but inadvertently
did not change the date as it was set forth within the definition in
two places. Today's notice corrects the references to the date
contained in the definition of ``principal limit,'' as it was set forth
in the December 26, 1996 publication to conform to the intent of the
December
[[Page 12953]]
26, 1996 notice. Today's notice also makes two other technical
corrections to conform with the intent of the September 17, 1996 final
rule.
DATES: Effective date of this document: December 26, 1996.
Effective date for amended definition of ``principal limit'' in
Sec. 206.3: May 1, 1997.
FOR FURTHER INFORMATION CONTACT: Mark W. Holman, Acting Director, Home
Mortgage Insurance Division, Office of Insured Single Family Housing,
Room number 9270, Department of Housing and Urban Development, 451
Seventh Street, SW, Washington, DC 20410, telephone (202) 708-2121; TTY
(202) 708-4594. (These are not toll-free telephone numbers.)
SUPPLEMENTARY INFORMATION: The September 17, 1996 final rule issued by
the Department delayed the effective date for the amendment to the
definition of ``principal limit'' in Sec. 206.3 until January 5, 1997.
The December 26, 1996 document further delayed the effective date for
the definition of ``principal limit'' in Sec. 206.3, until May 1, 1997,
but inadvertently neglected to change the date references within the
definition in two places. The correct date references of May 1, 1997
are being substituted through this correction notice. This notice also
corrects the definition of ``principal limit,'' as it was set forth in
the September 17, 1996 final rule by changing ``unless'' in the fifth
sentence to ``if'' so that the definition clearly applies the changed
method of calculating principal limit to mortgages executed on or after
May 1, 1997, as was intended by the September 17, 1996 final rule. In
addition, this notice corrects the sixth sentence of the definition of
``principal limit,'' as it was set forth in the September 17, 1996
final rule to add the words ``each month'' after ``increases'' and the
words ``one-twelfth of'' after ``rate equal to.''
Accordingly, in FR Doc. 96-23717, on page 49032, the definition of
``principal limit'' in Sec. 206.3, as set forth in the final rule
published on September 17, 1996, at 61 FR 49030, is corrected to read
as follows:
Sec. 206.3 Definitions.
* * * * *
Principal limit means the maximum disbursement that could be
received in any month under a mortgage, assuming that no other
disbursements are made, taking into account the age of the youngest
mortgagor, the mortgage interest rate, and the maximum claim amount.
Mortgagors over the age of 95 will be treated as though they are 95 for
purposes of calculating the principal limit. The principal limit is
used to calculate payments to a mortgagor. It is calculated for the
first month that a mortgage could be outstanding using factors provided
by the Secretary. It increases each month thereafter at a rate equal to
one-twelfth of the mortgage interest rate in effect at that time, plus
one-twelfth of one-half percent per annum, if the mortgage was executed
on or after May 1, 1997. If the mortgage was executed before May 1,
1997, the principal limit increases each month at a rate equal to one-
twelfth of the expected average mortgage interest rate plus one-twelfth
of one-half percent per annum. The principal limit may decrease because
of insurance or condemnation proceeds applied to the mortgage balance
under Sec. 209.209(b) of this chapter.
* * * * *
Dated: March 13, 1997.
Nicolas P. Retsinas,
Assistant Secretary for Housing-Federal Housing Commissioner.
[FR Doc. 97-6860 Filed 3-18-97; 8:45 am]
BILLING CODE 4210-27-P
