[Federal Register Volume 62, Number 127 (Wednesday, July 2, 1997)]
[Proposed Rules]
[Pages 35716-35718]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-17291]
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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
24 CFR Parts 207, 251, 252, 255, and 266
[Docket No. FR-4203-P-01]
Electronic Payment of Multifamily Insurance Premiums
AGENCY: Office of the Assistant Secretary for Housing-Federal Housing
Commissioner, HUD.
ACTION: Proposed rule.
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SUMMARY: This rule proposes that all annual multifamily mortgage
insurance premium (MIP) collections in accordance with 24 CFR parts
207, 251, 252, 255, and 266 be made by the Automated Clearing House
(ACH) program. The purpose of this rule is to improve the efficiency of
the Multifamily Mortgage Insurance Program and reduce costs to HUD
lenders. This rule would not affect the initial payment of MIPs.
DATES: Comment Due Date: September 2, 1997.
ADDRESSES: Interested persons are invited to submit comments regarding
[[Page 35717]]
this proposed rule to the Rules Docket Clerk, room 10276, Office of
General Counsel, Department of Housing and Urban Development, 451
Seventh Street SW., Washington, DC 20410-0500. Comments should refer to
the above docket number and title. A copy of each comment submitted
will be available for public inspection and copying during regular
business hours at the above address. Facsimile (FAX) comments are not
acceptable.
FOR FURTHER INFORMATION CONTACT: Samuel N. Conner, Acting Director,
Multifamily Accounting and Servicing Division, Room 6208, Department of
Housing and Urban Development, 451 7th Street SW., Washington, DC
20024; telephone (202) 708-0223. Hearing-impaired or speech-impaired
individuals may access the voice telephone number listed above by
calling the Federal Information Relay Service during working hours at
1-800-877-8339.
SUPPLEMENTARY INFORMATION:
Background
In August 1985, HUD implemented the Automated Clearing House (ACH)
program. The Multifamily Insurance Operations Branch entered into the
program in 1992, with voluntary participation by mortgagees for payment
of multifamily mortgage insurance premiums (MIPs).
The ACH program is designed to provide FHA approved lenders the
opportunity to utilize their personal computers to authorize
electronically the payment of MIPs, instead of sending checks through
lockbox. Currently, more than 60 percent of HUD's MIPs are being
collected through the ACH program.
The mortgagees' terminal operators tie their personal computers
into the collection agent's ACH system. The collection agent originates
an ACH file of debit transactions based on bills.
Each evening, the collection agent originates an ACH file of debit
transactions based on the data keyed by the mortgagees. When the debit
transactions have been processed, the ACH will transmit the MIP data to
HUD's Multifamily Information System. Through this ACH process, the
debit amount is drawn electronically from the designated mortgagee's
bank account that day.
After transmission, the insurance premium transactions are
processed in the same manner as in the past.
The ACH transfer system uses the mortgagee number as part of the
``log on'' procedure. Any error in the mortgagee number results in the
ACH transfer system rejecting the ``log on'' attempt. In addition, the
ACH transfer system balances the dollar fields in each detail
transaction to the amount entered, along with the item number. Where
there is an error, the system produces an error message that describes
the problem. The error must be corrected before the ACH transfer system
will prepare the ACH entries.
The general Late Charge policy for the ACH program is the same as
for MIPs sent to the Atlanta lockbox address. Late charges are levied
if payment is received later than 15 days after due date. For the ACH
program, the late charge amount is automatically calculated by the
system.
ACH provides lenders with numerous tangible benefits that should
reduce their servicing costs. The advantages of ACH are:
(1) Control of payment timing--the use of ACH debits and credits
can increase control of payment initiation and funds availability;
(2) Banking costs are reduced--ACH transfer costs less than paper
check and wire transfer;
(3) Accounting reconciliation is reduced--payments are computerized
and cash application is more automated than with manual systems;
(4) On-line edits can reduce data errors created by manual
recording; and
(5) The chance of lost/late mail is eliminated.
Because ACH provides mortgage lenders as well as HUD with numerous
tangible benefits that reduce servicing costs, HUD is proposing that
ACH become the sole method for collecting annual MIPs. HUD believes
that this rule will not have a significant economic impact on the
smaller lending community since personal computing is so pervasive
within the industry. The rule implements a program that will enhance
operations and be cost beneficial for all mortgage lenders.
Implementation of this process will be phased-in and coordinated with
lenders on an individual basis.
Other Matters
Environmental Review
This amendment is excluded from the environmental review
requirements of the National Environmental Policy Act (42 U.S.C. 4321-
4347) and the other related Federal environmental laws and authorities,
as set forth in 24 CFR part 50. In keeping with the exclusion provided
for in 24 CFR 50.19(c)(1), this amendment would not ``direct, provide
for assistance or loan and mortgage insurance for, or otherwise govern
or regulate property acquisition, disposition, lease, rehabilitation,
alteration, demolition, or new construction, or set out or provide for
standards for construction or construction materials, manufactured
housing, or occupancy.'' Accordingly, under 24 CFR 50.19(c)(2), this
amendment is categorically excluded because it amends a previous
document where the underlying document as a whole would not fall within
the exclusion set forth in 24 CFR 50.19(c)(1), but the amendment by
itself would do so.
Regulatory Flexibility Act
The Secretary, in accordance with the Regulatory Flexibility Act (5
U.S.C. 605(b)) has reviewed and approved this rule, and in so doing
certifies that this rule would not have a significant economic impact
on a substantial number of small entities. A survey of presently
insured mortgagees indicates that nearly all mortgagees have computers
that would allow them to submit electronic payments. The cost of the
software package is approximately $30.00. HUD recognizes, however, that
the uniform application of requirements on entities of differing sizes
often places a disproportionate burden on small entities. Therefore,
HUD specifically solicits comments as to whether this proposed rule
would significantly impact a substantial number of small entities, and
as to any less burdensome alternatives.
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 rule would 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. As a result,
the rule is not subject to review under the order.
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 proposed
rule would not impose any Federal mandates on any State, local, or
tribal governments, or on the private sector, within the meaning of the
UMRA.
[[Page 35718]]
Catalog of Federal Domestic Assistance
The Catalog of Federal Domestic Assistance numbers are 14.129,
14.155, and 14.188.
List of Subjects
24 CFR Part 207
Manufactured homes, Mortgage insurance, Reporting and recordkeeping
requirements, Solar energy.
24 CFR Part 251
Low and moderate income housing, Mortgage insurance, Reporting and
recordkeeping requirements.
24 CFR Part 252
Health facilities, Loan programs--health, Loan programs--housing
and community development, Mortgage insurance, Nursing homes, Reporting
and recordkeeping requirements.
24 CFR Part 255
Low and moderate income housing, Mortgage insurance, Reporting and
recordkeeping requirements.
24 CFR Part 266
Aged, Fair housing, Intergovernmental relations, Mortgage
insurance, Low and moderate income housing, Reporting and recordkeeping
requirements.
Accordingly, the Department proposes to amend Subtitle B, Chapter
II, Subchapter B, of Title 24 of the Code of Federal Regulations as
follows:
PART 207--MULTIFAMILY HOUSING MORTGAGE INSURANCE
1. The authority citation for part 207 continues to read as
follows:
Authority: 12 U.S.C. 1701z-11(e), 1713, and 1715b; 42 U.S.C.
3535(d).
2. A new Sec. 207.252e to subpart B is added to read as follows:
Sec. 207.252e Method of payment of mortgage insurance premiums.
In the cases that the Commissioner deems appropriate, the
Commissioner may require, by means of instructions communicated to all
affected mortgagees, that mortgage insurance premiums be remitted
electronically.
PART 251--COINSURANCE FOR THE CONSTRUCTION OR SUBSTANTIAL
REHABILITATION OF MULTIFAMILY HOUSING PROJECTS
3. The authority citation for part 251 continues to read as
follows:
Authority: 12 U.S.C. 1515b, 1715z-9; 42 U.S.C. 3535(d).
4. A new Sec. 251.6 is added to read as follows:
Sec. 251.6 Method of payment of mortgage insurance premiums.
In the cases that the Commissioner deems appropriate, the
Commissioner may require, by means of instructions communicated to all
affected lenders, that mortgage insurance premiums be remitted
electronically.
PART 252--COINSURANCE OF MORTGAGES COVERING NURSING HOMES,
INTERMEDIATE CARE FACILITIES, AND BOARD AND CARE HOMES
5. The authority citation for part 252 continues to read as
follows:
Authority: 12 U.S.C. 1515b, 1715z-9; 42 U.S.C. 3535(d).
6. A new Sec. 252.6 is added to read as follows:
Sec. 252.6 Method of payment of mortgage insurance premiums.
The provisions of 24 CFR 251.6 shall apply to this part.
PART 255--COINSURANCE FOR THE PURCHASE OR REFINANCING OF EXISTING
MULTIFAMILY HOUSING PROJECTS
7. The authority citation for part 255 is revised to read as
follows:
Authority: 12 U.S.C. 1515b, 1715z-9; 42 U.S.C. 3535(d).
8. A new Sec. 255.6 is added to read as follows:
Sec. 255.6 Method of payment of mortgage insurance premiums.
The provisions of 24 CFR 251.6 shall apply to this part.
PART 266--HOUSING FINANCE AGENCY RISK-SHARING PROGRAM FOR INSURED
AFFORDABLE MULTIFAMILY PROJECT LOANS
9. The authority citation for part 266 continues to read as
follows:
Authority: 12 U.S.C. 1707 note; 42 U.S.C. 3535(d).
10. A new Sec. 266.610 is added to read as follows:
Sec. 266.610 Method of payment of mortgage insurance premiums.
In the cases that the Commissioner deems appropriate, the
Commissioner may require, by means of instructions communicated to all
affected mortgagees, that mortgage insurance premiums be remitted
electronically.
Dated: May 30, 1997.
Nicolas P. Retsinas,
Assistant Secretary for Housing-Federal Housing Commissioner.
[FR Doc. 97-17291 Filed 7-1-97; 8:45 am]
BILLING CODE 4210-27-P
