[Federal Register Volume 63, Number 92 (Wednesday, May 13, 1998)]
[Proposed Rules]
[Pages 26702-26704]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-12615]
[[Page 26701]]
_______________________________________________________________________
Part IV
Department of Housing and Urban Development
_______________________________________________________________________
24 CFR Parts 200 and 207
Electronic Submission of Required Data by Multifamily Mortgagees to
Report Mortgage Delinquencies, Defaults, Reinstatements, Assignment
Elections, and Withdrawals of Assignment Elections; Proposed Rule
Federal Register / Vol. 63, No. 92 / Wednesday, May 13, 1998 /
Proposed Rules
[[Page 26702]]
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
24 CFR Parts 200 and 207
[Docket No. FR-4303-P-01]
RIN 2502-AH11
Electronic Submission of Required Data by Multifamily Mortgagees
to Report Mortgage Delinquencies, Defaults, Reinstatements, Assignment
Elections, and Withdrawals of Assignment Elections
AGENCY: Office of the Assistant Secretary for Housing-Federal Housing
Commissioner, HUD.
ACTION: Proposed rule; Notice of proposed information collection
requirements.
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SUMMARY: This proposed rule would require mortgagees that hold or
service multifamily mortgages insured by HUD to submit certain data
electronically to HUD in a HUD prescribed format. Electronic submission
is necessary because the manual submission of HUD forms has become a
burden to servicing mortgagees, as well as to HUD. This proposed rule
would apply to all multifamily mortgagees in their responsibility to
report mortgage delinquencies, mortgage defaults, mortgage
reinstatements, elections to assign mortgages to HUD, and withdrawal of
assignment elections.
DATES: Comment due date: July 13, 1998.
ADDRESSES: Interested persons are invited to submit comments regarding
this proposed rule to the Rules Docket Clerk, Office of the General
Counsel, Room 10276, Department of Housing and Urban Development, 451
Seventh Street, SW, Washington, DC 20410. Communications should refer
to the above docket number and title. Facsimile (FAX) comments are not
acceptable. A copy of each comment submitted will be available for
public inspection and copying during regular business hours (7:30 a.m.
to 5:30 p.m.) eastern time at the above address.
FOR FURTHER INFORMATION CONTACT: Willie Spearmon, Director, Office of
Business Products, Room 6134, Department of Housing and Urban
Development, 451 Seventh Street, SW, Washington, DC 20410, telephone
(202) 708-3000 (this is not a toll-free number). Individuals with
hearing or speech impairments may access this number via TTY by calling
the Federal Information Relay Service at (800) 877-8339 (this is a
toll-free number).
SUPPLEMENTARY INFORMATION:
I. Background
HUD obtains data regarding the status of delinquent insured
mortgage loans on multifamily projects by using Form HUD-92426,
Multifamily Default Status Report. HUD needs the information submitted
on the form in order to monitor mortgage loans for which the mortgagees
are experiencing payment or other difficulties. In accordance with the
requirements of 24 CFR part 207, the mortgagee must prepare and sign
this form under the specified circumstances and mail it to HUD. When
HUD receives the form, it must sign it and return it to the mortgagee
to acknowledge receipt of the form.
To replace this burdensome paperwork process, HUD has developed a
method for mortgagees to submit the data currently collected on Form
HUD-92426, as well as to report the date of the mortgagees' last
physical inspection of the project, using the Internet. According to
this new method, the mortgagee will electronically submit the required
data to HUD, after which an electronic receipt will automatically be
returned. HUD will provide, at no cost to mortgagees, ``stand alone''
software and technical support for that software, which is designed to
run on IBM-compatible personal computers (PCs). Mortgagees will,
however, need to provide their own PCs and Internet connections.
Mortgagees that do not choose to initiate Internet access for
themselves may contract with another entity or individual to act on
their behalf to report the data electronically; HUD believes that this
is not likely to be necessary in most cases.
One of HUD's primary concerns is the costs mortgagees may incur in
establishing Internet access if they have not already done so. For this
reason, HUD has decided to allow for a staggered implementation of this
rulemaking, under which smaller mortgagees would be given more time to
comply with the new electronic reporting requirements. HUD believes,
however, that electronic tracking of the default and reinstatement data
generally will reduce costs for mortgagees. HUD has field-tested
electronic submission of this data on a voluntary pilot basis with a
number of mortgagees, and has received generally favorable responses.
While HUD hopes to begin implementing the electronic reporting
requirements in this rule in July 1998, HUD encourages mortgagees to
comply with these requirements voluntarily to the extent possible, in
order for the mortgagees and HUD to realize an early advantage of cost
savings.
II. This Proposed Rule
This document proposes to amend the regulations in 24 CFR parts 200
and 207 related to multifamily housing mortgage insurance, in order to
require mortgagees with insured multifamily mortgage loans to submit
information reporting mortgage delinquencies, defaults, reinstatements,
assignment elections, and withdrawals of assignment elections
electronically, rather than in writing on Form HUD-92426. Specifically,
this document proposes to amend the regulations as follows:
(1) This proposed rule would add a new subpart B to part 200,
entitled ``Electronic Submission of Required Data for Mortgage Defaults
and Mortgage Insurance Claims for Insured Multifamily Mortgages.'' This
new subpart B would require multifamily mortgagees to submit the data
electronically, and it would provide the staggered schedule of
effectiveness. As mentioned above, HUD would allow smaller mortgagees
(i.e., those with fewer insured mortgage loans) more time to comply
with the electronic submission requirements. This new subpart would
also provide for an exception to the electronic submission
requirements, subject to HUD approval, for very small mortgagees for
which compliance would represent a financial hardship.
(2) This document also proposes several conforming changes to the
current requirements in part 207. In Sec. 207.256, which requires
mortgagees to notify HUD of defaults, this document proposes to require
mortgagees to notify HUD in the manner prescribed in the new subpart B
of part 200, rather than in writing. This document would similarly
amend Sec. 207.256a, which requires mortgagees to notify HUD if a
mortgage loan is reinstated, and Sec. 207.258, which requires
mortgagees to notify HUD if they elect to assign a mortgage to HUD or
to acquire a property and convey title to HUD.
III. Other Matters
A. Paperwork Burden
The information collection requirements contained in this proposed
rule have been submitted to the Office of Management and Budget (OMB)
for review in accordance with the Paperwork Reduction Act of 1995 (44
U.S.C. 3501-3520).
In accordance with 5 CFR 1320.5(a)(1)(iv), HUD is setting forth the
following concerning the proposed collection of information:
[[Page 26703]]
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Number of Total annual Minutes per
Description respondents response response Total hours
----------------------------------------------------------------------------------------------------------------
Electronic transfer of information.......... 420 2000 10 333
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Interested persons are invited to submit comments regarding the
information collection requirements in this proposed rule. Comments
must be received within 60 days of the date of this proposal. Comments
must refer to the proposed rule by name and docket number (FR 4303),
and must be sent to Joseph F. Lackey, Jr., HUD Desk Officer, Office of
Management and Budget, New Executive Office Building, Washington, DC
20503.
B. Regulatory Flexibility Act
The Secretary, in accordance with the Regulatory Flexibility Act (5
U.S.C. 605(b)), has reviewed this proposed rule before publication and
by approving it certifies that this proposed rule would not have a
significant economic impact on a substantial number of small entities.
The electronic submission requirements in this proposed rule should
reduce burden and costs for all mortgagees. As stated above, HUD will
also reduce the burden on mortgagees by providing the software and
technical support necessary to facilitate the electronic submission
requirements. Therefore, HUD has determined that this proposed rule
would not have a significant economic impact on a substantial number of
small entities. Notwithstanding this determination, HUD specifically
invites comments regarding alternatives to this proposed rule that will
meet HUD's objectives as described in this preamble.
C. Environmental Impact
This proposed rule is categorically excluded from environmental
review under the National Environmental Policy Act (42 U.S.C. 4321).
The proposed addition to part 200 of a new subpart B falls within the
exclusion provided by 24 CFR 50.19(c)(1), in that it does not direct,
provide for assistance or loan and mortgage insurance for, or otherwise
govern or regulate, real property acquisition, disposition, leasing,
rehabilitation, alteration, demolition, or new construction, or
establish, revise, or provide for standards for construction or
construction materials, manufactured housing, or occupancy. The
proposed amendments to part 207 are categorically excluded under 24 CFR
50.19(c)(2), because they amend an existing document, and the existing
document as a whole would not fall within the exclusion in 24 CFR
50.19(c)(1), but the amendments by themselves would.
D. Executive Order 12612, Federalism
The General Counsel, as the Designated Official under section 6(a)
of Executive Order 12612, Federalism, has determined that the policies
contained in this proposed rule would not have substantial direct
effects on States or their political subdivisions, on the relationship
between the Federal Government and the States, or on the distribution
of power and responsibilities among the various levels of government.
This proposed rule relates only to the manner in which mortgagees
submit required information to HUD, and it would not affect the
federalism concerns addressed in the Order. As a result, this proposed
rule is not subject to review under the Order.
E. Unfunded Mandates Reform Act
Title II of the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-
4; approved March 22, 1995) (UMRA) establishes requirements for Federal
agencies to assess the effects of their regulatory actions on State,
local, and tribal governments, and on the private sector. This rule
would not impose any Federal mandates on any State, local, or tribal
government, or on the private sector, within the meaning of the UMRA.
F. Catalog of Federal Domestic Assistance
The Catalog of Federal Domestic Assistance number is 14.155.
List of Subjects
24 CFR Part 200
Administrative practice and procedure, Claims, Equal employment
opportunity, Fair housing, Home improvement, Housing standards, Lead
poisoning, Loan programs--housing and community development, Minimum
property standards, Mortgage insurance, Organization and functions
(Government agencies), Penalties, Reporting and recordkeeping
requirements, Social security, Unemployment compensation, Wages.
24 CFR Part 207
Manufactured homes, Mortgage insurance, Reporting and recordkeeping
requirements, Solar energy.
Accordingly, 24 CFR Chapter II is proposed to be amended as
follows:
PART 200--INTRODUCTION TO FHA PROGRAMS
1. The authority citation for 24 CFR part 200 continues to read as
follows:
Authority: 12 U.S.C. 1701-1715z-18; 42 U.S.C. 3535(d).
2. In part 200, a new subpart B, consisting of Secs. 200.120
through 200.121, is added to read as follows:
Subpart B--Electronic Submission of Required Data for Mortgage
Defaults and Mortgage Insurance Claims for Insured Multifamily
Mortgages
Sec.
200.120 Purpose and applicability.
200.121 Requirements and effectiveness.
Sec. 200.120 Purpose and applicability.
(a) Purpose. The purpose of this subpart B is to require mortgagees
of all multifamily projects whose mortgages are insured or coinsured by
HUD to submit electronically information regarding mortgage
delinquencies, defaults, reinstatements, elections to assign, and
withdrawals of assignment elections, and related information, as that
information is required by 24 CFR part 207 and Form HUD-92426 (which is
available at the Department of Housing and Urban Development, HUD
Custom Service Center, 451 7th Street, SW, Room B-100, Washington, DC
20410; telephone (800) 767-7465).
(b) Applicability. This subpart applies to all HUD multifamily
mortgage insurance and coinsurance programs.
Sec. 200.121 Requirements and effectiveness.
(a) Multifamily mortgagees, which are required by 24 CFR part 207
to report mortgage delinquencies, defaults, reinstatements, assignment
elections, withdrawals of assignment elections, and related
information, must submit this information electronically, over the
Internet, in accordance with the following schedule of effectiveness:
(1) Mortgagees having 70 or more insured mortgage loans must comply
with this section by no later than January 1, 1999;
(2) Mortgagees having from 26 to 69 insured mortgage loans must
comply with this section by no later than January 1, 2000;
(3) Mortgagees having from 11 to 25 insured mortgage loans must
comply with this section by no later than January 1, 2001;
[[Page 26704]]
(4) Mortgagees having 10 or fewer insured mortgage loans must
comply with this section by no later than January 1, 2002.
(b) Exception. On or after January 1, 2002, mortgagees that hold or
service fewer than 10 multifamily mortgages may continue to report
mortgage delinquencies, defaults, reinstatements, assignment elections,
withdrawals of assignment elections, and related information in writing
on Form HUD-92426 only with specific HUD approval. HUD will grant such
approval, upon application by the mortgagee, for reasons of hardship
due to insufficient financial resources to purchase the required
hardware and Internet access.
(c) HUD will not accept reports of information regarding defaults,
reinstatements, assignment elections, and related information in a
manner that is not in accordance with this section. Failure on the part
of mortgagees to report this information as required by 24 CFR part 207
and this section may result in HUD's application of the sanctions and
surcharges specified in 24 CFR part 207.
PART 207--MULTIFAMILY HOUSING MORTGAGE INSURANCE
3. The authority citation for 24 CFR part 207 continues to read as
follows:
Authority: 12 U.S.C. 1701z-11(e), 1713, and 1715b; 42 U.S.C.
3535(d).
4. Section 207.256 is revised to read as follows:
Sec. 207.256 Notice.
(a) If the default as defined in Sec. 207.255 is not cured within
the 30 days grace period, the mortgagee must, within 30 days
thereafter, notify the Commissioner of such default, in the manner
prescribed in 24 CFR part 200, subpart B.
(b) Notwithstanding Sec. 207.255(a)(2), the mortgagee must give
notice to the Commissioner, in the manner prescribed in 24 CFR part
200, subpart B, of the failure of the mortgagor to comply with such
covenant, regardless of the fact the mortgagee may not have elected to
accelerate the debt.
5. Section 207.256a is revised to read as follows:
Sec. 207.256a Reinstatement of defaulted mortgage.
If, after default and prior to the completion of foreclosure
proceedings, the mortgagor cures the default, the insurance shall
continue as if a default had not occurred, provided the mortgagee gives
notice of reinstatement to the Commissioner, in the manner prescribed
in 24 CFR part 200, subpart B.
6. Section 207.258 is amended by revising paragraphs (a) and
(b)(1), to read as follows:
Sec. 207.258 Insurance claim requirements.
(a) Alternative election by mortgagee. When the mortgagee becomes
eligible to receive mortgage insurance benefits pursuant to
Sec. 207.255(c), it must, within 45 days thereafter, give the
Commissioner notice, in the manner prescribed in 24 CFR part 200,
subpart B, of its intention to file an insurance claim and of its
election either to assign the mortgage to the Commissioner, as provided
in paragraph (b) of this section, or to acquire and convey title to the
Commissioner, as provided in paragraph (c) of this section.
(b) * * *
(1) Notice of assignment. On the date the assignment of the
mortgage is filed for record, the mortgagee must notify the
Commissioner, in the manner prescribed in 24 CFR part 200, subpart B,
of such assignment, and must also notify the FHA Comptroller by
telegram of such recordation.
* * * * *
April 8, 1998.
Dated: May 6, 1998.
Art Agnos,
Acting General Deputy, Assistant Secretary for Housing, Deputy Federal
Housing Commissioner.
[FR Doc. 98-12615 Filed 5-12-98; 8:45 am]
BILLING CODE 4210-27-P
