[Federal Register Volume 64, Number 125 (Wednesday, June 30, 1999)]
[Rules and Regulations]
[Pages 34983-34984]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-16612]
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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
24 CFR Part 203
[Docket No. FR-4411-F-03]
RIN 2502-AH30
Single Family Mortgage Insurance; Informed Consumer Choice
Disclosure Notice: Technical Correction
AGENCY: Office of the Assistant Secretary for Housing--Federal Housing
Commissioner, HUD.
ACTION: Final rule; technical correction.
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SUMMARY: This rule makes a technical correction to HUD's rule on
Informed Consumer Choice Disclosure Notice, published on June 2, 1999,
to provide for a compliance date of September 2, 1999 for mortgagees
subject to the requirements of this rule.
DATES: Effective Date: July 2, 1999.
FOR FURTHER INFORMATION CONTACT: Vance T. Morris, Director, Home
[[Page 34984]]
Mortgage Insurance Division, Office of Insured Single Family Housing,
Room 9270, U.S. Department of Housing and Urban Development, 451
Seventh Street, SW, Washington, DC 20410-8000; telephone (202) 708-2700
(this is not a toll-free number). Hearing or speech-impaired
individuals may access this number via TTY by calling the toll-free
Federal Information Relay Service at (800) 877-8339.
SUPPLEMENTARY INFORMATION: On June 2, 1999 (64 FR 29758), HUD published
a final rule to implement a recent statutory amendment to HUD's Federal
Housing Administration (FHA) Single Family Mortgage Insurance Program.
The statutory amendment requires an original lender to provide certain
information, in the form of a disclosure notice, to prospective
borrowers who have applied for an FHA-insured home mortgage; and that
HUD develop this disclosure notice. Specifically, through the
disclosure notice, the lender must provide the prospective FHA borrower
with an analysis comparing the mortgage costs of the FHA-insured
mortgage with the mortgage costs of other similar conventional mortgage
products that the lender offers and that the borrower may qualify for.
The disclosure notice must also provide information about when the
requirement to pay FHA mortgage insurance premiums terminates. This
final rule takes effect on July 2, 1999.
In developing the Informed Consumer Choice Disclosure Notice final
rule, HUD intended to provide mortgagees with sufficient time to
prepare their own disclosure notices, based on HUD's model notice, once
HUD issued its rule that provides the model notice. While HUD believed
that it could not delay the effective date of the rule, as requested by
some commenters, in view of the statutory requirement imposed on HUD to
promptly develop the disclosure notice through rulemaking, HUD believes
that it is not inconsistent with statutory intent to allow mortgagees
the requisite time to design and develop their disclosure notices based
on HUD's model notice. The June 2, 1999 inadvertently failed to include
this additional time.
Accordingly, this final rule makes a technical correction to the
June 2, 1999 final rule to provide that the requirements of new
Sec. 203.10 are applicable to any application for mortgage insurance
authorized under section 203(b) of the National Housing Act (12 U.S.C.
1709) that the mortgagee receives on or after September 2, 1999 (see
Sec. 203.10(e)).
Other Matters
Justification for Final Rulemaking
In general, the Department publishes a rule for public comment
before issuing a rule for effect, in accordance with its own
regulations on rulemaking at 24 CFR part 10. Part 10, however, does
provide for exceptions from that general rule where the Department
finds good cause to omit advance notice and public participation. The
good cause requirement is satisfied when the prior public procedure is
``impracticable, unnecessary, or contrary to the public interest'' (24
CFR 10.1). The Department finds that good cause exists to publish this
final rule for effect without first soliciting public comment, in that
prior public procedure is unnecessary. Public procedure is unnecessary
because this final rule simply makes a technical correction to its
HUD's Informed Consumer Choice regulation to provide covered lenders
with the necessary time to prepare their disclosure notices, based on
HUD's model notice.
Regulatory Flexibility Act
The Secretary, in accordance with the Regulatory Flexibility Act (5
U.S.C. 605(b)), has reviewed and approved this final rule, and in so
doing certifies that this rule will not have a significant economic
impact on a substantial number of small entities. This rule only makes
a technical correction to HUD's Informed Consumer Choice rule to
provide for a compliance date of September 2, 1999 for covered lenders.
Environmental Impact
This final rule is exempt from the environmental review procedures
under HUD regulations in 24 CFR part 50 that implement section
102(2)(C) of the National Environmental Policy Act of 1969 (42 U.S.C.
4332) because of the exemption under Sec. 50.19(c)(1). This final rule
only makes a technical correction to an existing regulation.
Executive Order 12612, Federalism
The General Counsel, as the Designated Official under section 6(a)
of Executive Order 12612, Federalism, has determined that this rule
will not have substantial direct effects on States or their political
subdivisions, or the relationship between the Federal Government and
the States, or on the distribution of power and responsibilities among
the various levels of government. No programmatic or policy changes
will result from this rule that would affect the relationship between
the Federal Government and State and local governments.
List of Subjects in 24 CFR Part 203
Hawaiian Natives, Home improvement, Indians--lands, Loan programs--
housing and community development, Mortgage insurance, Reporting and
recordkeeping requirements, Solar energy.
For the reasons discussed in the preamble, HUD amends 24 CFR part
203 as follows:
PART 203--SINGLE FAMILY MORTGAGE INSURANCE
1. The authority citation for 24 CFR part 203 continues to read as
follows:
Authority: 12 U.S.C. 1709, 1710, 1715b, and 1715u; 42 U.S.C.
3535(d).
2. Paragraph (e) of Sec. 203.10 is revised to read as follows:
Sec. 203.10 Informed consumer choice for prospective FHA mortgagors.
* * * * *
(e) Applicability. This section applies to any application for
mortgage insurance authorized under section 203(b) of the National
Housing Act (12 U.S.C. 1709) that the mortgagee receives on or after
September 2, 1999.
* * * * *
Dated: June 25, 1999.
William C. Apgar,
Assistant Secretary for Housing-Federal Housing Commissioner.
[FR Doc. 99-16612 Filed 6-25-99; 2:10 pm]
BILLING CODE 4210-27-P
