2020-16659. Proposed Collection; Comment Request

AGENCY:

Federal Housing Finance Agency.

ACTION:

National Survey of Mortgage Originations—30-day Notice of Submission of Information Collection for Approval for Emergency Clearance from Office of Management and Budget.

SUMMARY:

In accordance with the requirements of the Paperwork Reduction Act of 1995 (PRA), the Federal Housing Finance Agency (FHFA) is seeking public comments concerning an information collection known as the “American Survey of Mortgage Borrowers (ASMB),” which has been assigned control number 2590-0015 by the Office of Management and Budget (OMB). FHFA intends to submit the information collection to OMB for review and approval of an emergency six month renewal of the control number, which expired on July 31, 2019.

DATES:

Interested persons may submit comments on or before August 31, 2020.

ADDRESSES:

Submit comments to the Office of Information and Regulatory Affairs of the Office of Management and Budget, Attention: Desk Officer for the Federal Housing Finance Agency, Washington, DC 20503, Fax: [phone], Email: [e-mail]. Please also submit comments to FHFA, identified by “Proposed Collection; Comment Request: `American Survey of Mortgage Borrowers, (No. 2020-N-14)' ” by any of the following methods:

• Agency website: www.fhfa.gov/​open-for-comment-or-input.
• Federal eRulemaking Portal: http://www.regulations.gov. Follow the instructions for submitting comments. If you submit your comment to the Federal eRulemaking Portal, please also send it by email to FHFA at [e-mail] to ensure timely receipt by the agency.
• Mail/Hand Delivery: Federal Housing Finance Agency, Eighth Floor, 400 Seventh Street SW, Washington, DC 20219, ATTENTION: Proposed Collection; Comment Request: “American Survey of Mortgage Borrowers, (No. 2020-N-14).” Please note that all mail sent to FHFA via U.S. Mail is routed through a national irradiation facility, a process that may delay delivery by approximately two weeks. For any time-sensitive correspondence, please plan accordingly.

We will post all public comments we receive without change, including any personal information you provide, such as your name and address, email address, and telephone number, on the FHFA website at http://www.fhfa.gov. In addition, copies of all comments received will be available for examination by the public through the electronic comment docket for this PRA Notice also located on the FHFA website.

FOR FURTHER INFORMATION CONTACT:

Saty Patrabansh, Manager, National Mortgage Database Program, [e-mail], [phone]; or Angela Supervielle, Counsel, [e-mail], [phone], (these are not toll-free numbers), Federal Housing Finance Agency, 400 Seventh Street SW, Washington, DC 20219. The Telecommunications Device for the Hearing Impaired is [phone].

SUPPLEMENTARY INFORMATION:

A. Background

The ASMB is a component of the “National Mortgage Database” (NMDB®) Program, which is a joint effort of FHFA and the Consumer Financial Protection Bureau (CFPB) (jointly, “the agencies”). The NMDB Program is designed to satisfy the Congressionally-mandated requirements of section 1324(c) of the Federal Housing Enterprises Financial Safety and Soundness Act.^[1] Section 1324(c) requires that FHFA conduct a monthly survey to collect data on the characteristics of individual prime and subprime mortgages, and on the borrowers and properties associated with those mortgages, in order to enable it to prepare a detailed annual report on the mortgage market activities of the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac) for review by the appropriate Congressional oversight committees. Section 1324(c) also authorizes and requires FHFA to compile a database of otherwise unavailable residential mortgage market information and to make that information available to the public in a timely fashion.

As a means of fulfilling those and other statutory requirements, as well as to support policymaking and research regarding the residential mortgage markets, FHFA and CFPB jointly established the NMDB Program in 2012. The Program is designed to provide comprehensive information about the U.S. mortgage market and has three primary components: (1) The NMDB; (2) the quarterly National Survey of Mortgage Originations (NSMO); and (3) the ASMB.

The NMDB is a de-identified loan-level database of closed-end first-lien residential mortgage loans that is representative of the market as a whole, contains detailed loan-level information on the terms and performance of the mortgages and the characteristics of the associated borrowers and properties, is continually updated, has an historical component dating back to 1998, and provides a sampling frame for surveys to collect additional information. The core data in the NMDB are drawn from a random 1-in-20 sample of all closed-end first-lien mortgages outstanding at any time between January 1998 and the present in the files of Experian, one of the three national credit repositories. A random 1-in-20 sample of mortgages newly-reported to Experian is added each quarter.

The NMDB draws additional information on mortgages in the NMDB datasets from other existing sources, including Home Mortgage Disclosure Act (HMDA) data that are maintained by the Federal Financial Institutions Examination Council (FFIEC), property valuation models, and administrative data files maintained by Fannie Mae and Freddie Mac and by federal agencies. FHFA also obtains data from the two surveys conducted as part of the project—the NSMO and the ASMB. The NSMO is a quarterly survey that provides critical and timely information on newly-originated mortgages and those borrowing that are not available from other sources, including: the range of nontraditional and subprime mortgage products being offered, the methods by which these mortgages are being marketed, and the characteristics of borrowers for these types of loans.^[2]

While the NSMO provides information on newly-originated mortgages, the ASMB focuses on borrowers' experience with maintaining their existing mortgages. This includes their experience maintaining mortgages under financial stress, their experience in soliciting financial assistance, their success in accessing federally sponsored programs designed to assist them, and, where applicable, any challenges they may have had in terminating a mortgage loan. In short, the ASMB is designed to collect information necessary to allow empirical analysis of two questions of vital importance to residential mortgage market policymakers and stakeholders: (1) What factors explain or predict which borrowers will become delinquent on their mortgages?; and (2) Once a borrower becomes delinquent, what factors explain or predict whether the borrower will (a) become current on the loan, (b) decide they cannot afford the mortgage and sell the property or modify the mortgage, or (c) remain delinquent and enter into foreclosure?

From 2016 through 2018, the ASMB questionnaire was sent once annually to a stratified random sample of 10,000 borrowers with mortgages in the NMDB. In 2018, the ASMB had an 18.7 percent overall response rate, which yielded 1,793 survey responses. FHFA did not undertake the ASMB during 2019, but intends to send out the survey again in the Fall of 2020.^[3] The 2018 and 2020 survey questionnaires are substantially similar, except in that a number of questions specifically relating to the COVID-19 pandemic and its effects have been added to the 2020 questionnaire. Eight new questions have been added regarding expanded mortgage payment forbearance options that may have been offered to borrowers. Two other new questions address the effect of the COVID-19 pandemic on borrowers' homeownership and employment. Because of the elimination of several questions, as well as the combination of some other questions, the total number of questions has actually decreased from 93 on the 2018 survey questionnaire to 92 on the 2020 questionnaire.

Each of the 92 questions on the 2020 survey questionnaire is designed to elicit one or more of five different categories of information that are not available in the administrative data and that are needed either to properly analyze the issues described above or to validate the survey responses. These categories are: (1) Information needed to validate that the survey reached the correct borrower and that the borrower is providing answers about the correct loan; (2) information about the mortgage loan that does not exist in sufficient detail in the administrative data; (3) information about the borrower's economic circumstances that does not exist, or exists in insufficient detail, in the administrative data; (4) information about the borrower's attitudes regarding his or her mortgage, property, interactions with lenders and servicers, and life circumstances; and (5) information needed to determine the ultimate outcome of the borrower's delinquency and the interim steps that led to that outcome.

B. Need For and Use of the Information Collection

FHFA views the NMDB Program as a whole, including the ASMB, as the monthly “survey” required by section 1324(c) of the Safety and Soundness Act. Core inputs to the NMDB, such as a regular refresh of the credit repository data, occur monthly, though the actual surveys conducted under the NMDB Project do not. The information collected through the ASMB is used, in combination with information obtained from existing sources in the NMDB, to assist FHFA in understanding how the performance of existing mortgages is influencing the residential mortgage market, what different borrower groups are discussing with their servicers when they are under financial stress, and consumers' opinions of federally-sponsored programs designed to assist them. This important, but otherwise unavailable, information assists FHFA in the supervision of its regulated entities (Fannie Mae, Freddie Mac, and the Federal Home Loan Banks) and in the development and implementation of appropriate and effective policies and programs. The information may also be used for research and analysis by CFPB and other federal agencies that have regulatory and supervisory responsibilities and mandates related to mortgage markets and to provide a resource for research and analysis by academics and other interested parties outside of the government.

As discussed above, the agencies have added to the 2020 ASMB survey questionnaire a number of questions relating to the effect of the COVID-19 pandemic on home mortgage borrowers. FHFA and CFPB are actively engaged in developing policies in response to the COVID-19 pandemic and in support of the recently-enacted CARES Act,^[4] which addresses various ramifications of the pandemic, including its effects on the residential mortgage market. It is critical for both agencies to have timely access to this information to assist in evidenced-based policymaking in these areas.

FHFA is also seeking OMB approval to continue to conduct cognitive pre-testing of the survey materials. The Agency uses information collected through that process to assist in drafting and modifying the survey questions and instructions, as well as the related communications, to read in the way that will be most readily understood by the survey respondents and that will be most likely to elicit usable responses. Such information is also used to help the Agency decide on how best to organize and format the survey questionnaires.

C. Reason for Emergency Clearance Request

In accordance with the requirements of 5 CFR 1320.8(d), FHFA published a request for public comments regarding this information collection in the Federal Register on May 29, 2019, prior to the expiration of the control number.^[5] The 60-day comment period closed on July 29, 2019. FHFA received no comments.

After publication of that 60-day Notice, FHFA and CFPB decided not to conduct the survey in 2019 and, instead, to wait until 2020 to conduct the next wave. In light of that decision, FHFA decided to allow the PRA clearance for the ASMB to expire on July 31, 2019 and to continue with the clearance process in early 2020. At the time the Agency was preparing to publish the 30-day PRA Notice in the Spring of 2020, the wide effect of the COVID-19 pandemic on the nation's mortgage markets and overall economy was becoming evident, and the agencies decided to revise the 2020 survey questionnaire to add the questions related to COVID-19 that are discussed above. The addition of those questions has made the survey questionnaire materially different from the version that was published with the 60-day Notice in May 2019 and OMB has informed FHFA that it cannot move forward with the normal clearance process without first publishing a new 60-day Notice attaching the revised survey.

If FHFA were to begin the clearance process anew, it is unlikely that it will have received OMB approval for the revised collection in time to send out the survey in the fall of 2020 as is needed to provide the agencies with timely and critical information on the effects of the pandemic on the residential mortgage market. Therefore, with the approval of OMB, FHFA is moving forward with this 30-day notice, after which it will request an emergency six-month clearance for this collection to facilitate the rapid collection of the pandemic-related information. At the appropriate time, FHFA will then initiate a full clearance process to cover future waves of the survey.

D. Burden Estimate

This information collection consists of two components: (1) The survey; and (2) the pre-testing of the survey questionnaire and related materials through the use of focus groups. FHFA conducted the ASMB annually from 2016 through 2018, but did not conduct the survey in 2019. The Agency currently plans to conduct the survey next in the Fall of 2020. The decision as to whether to conduct the survey on an annual or a biennial basis going forward will depend upon the availability of funding and on the agencies' assessments as to the need for the type of data collected through the survey. In order to preserve the ability to conduct the survey annually, FHFA assumes, for purposes of these burden estimates, that it will conduct the survey once annually over the next three years. The estimates assume that the Agency will conduct two rounds of pre-testing on each set of survey materials.

FHFA has analyzed the total hour burden on members of the public associated with conducting the survey (5,000 hours) and with pre-testing the survey materials (24 hours) and estimates the total annual hour burden imposed on the public by this information collection to be 5,024 hours. The estimate for each phase of the collection was calculated as follows:

(1) Conducting the Survey

FHFA estimates that the ASMB questionnaire will be sent to 10,000 recipients each time it is conducted. Although it expects that only about 1,800 of those surveys will be returned, FHFA has calculated the burden estimates below as if all of the surveys will be returned. Based on the reported experience of respondents to earlier ASMB questionnaires, FHFA estimates that it will take each respondent 30 minutes to complete each survey, including the gathering of necessary materials to respond to the questions. This results in a total annual burden estimate of 5,000 hours for the survey phase of this collection (1 survey per year × 10,000 respondents per survey × 30 minutes per respondent = 5,000 hours).

(2) Pre-Testing the Materials

FHFA estimates that it will sponsor two focus groups prior to conducting each annual survey, with 12 participants in each focus group, for a total of 24 focus group participants. It estimates the participation time for each focus group participant to be one hour, resulting in a total annual burden estimate of 24 hours for the pre-testing phase of the collection (2 focus groups per year × 12 participants in each group × 1 hour per participant = 24 hours).

E. Comment Request

FHFA requests written comments on the following: (1) Whether the collection of information is necessary for the proper performance of FHFA functions, including whether the information has practical utility; (2) the accuracy of FHFA's estimates of the burdens of the collection of information; (3) ways to enhance the quality, utility, and clarity of the information collected; and (4) ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques or other forms of information technology.

Robert Winkler,

Chief Information Officer, Federal Housing Finance Agency.

Footnotes

1.  12 U.S.C. 4544(c).

2.  OMB has cleared the NSMO under the PRA and assigned it control no. 2590-0012, which expires on June 30, 2023.

3.  A copy of the draft 2020 survey questionnaire appears at the end of this notice.

4.  Coronavirus Aid, Relief, and Economic Security Act, Public Law 116-136 (2020).

5.  See 84 FR 24783 (May 29, 2019).