2016-21983. Proposed Collection; Comment Request

AGENCY:

Federal Housing Finance Agency.

ACTION:

60-day notice of submission of information collection for approval from Office of Management and Budget.

SUMMARY:

In accordance with the requirements of the Paperwork Reduction Act of 1995, the Federal Housing Finance Agency (FHFA or the Agency) is seeking public comments concerning the currently-approved information collection known as the “National Survey of Mortgage Originations” (NSMO), which has been assigned control number 2590-0012 by the Office of Management and Budget (OMB) (the collection was previously known as the “National Survey of Mortgage Borrowers”). FHFA intends to submit the information collection to OMB for review and approval of a three-year extension of the control number, which is due to expire on December 31, 2016.

DATES:

Interested persons may submit comments on or before November 14, 2016.

ADDRESSES:

Submit comments to FHFA, identified by “Proposed Collection; Comment Request: `National Survey of Mortgage Originations, (No. 2016-N-06)' ” by any of the following methods:

• Agency Web site: 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: “National Survey of Mortgage Originations, (No. 2016-N-06).”

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 Web site at http://www.fhfa.gov. In addition, copies of all comments received will be available for examination by the public on business days between the hours of 10 a.m. and 3 p.m., at the Federal Housing Finance Agency, Eighth Floor, 400 Seventh Street SW., Washington, DC 20219. To make an appointment to inspect comments, please call the Office of General Counsel at [phone].

FOR FURTHER INFORMATION CONTACT:

Forrest Pafenberg, Supervisory Economist, Office of the Chief Operating Officer, by email at [e-mail] or by telephone at [phone]; or Eric Raudenbush, Associate General Counsel, by email at [e-mail] or by telephone at [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. Need For and Use of the Information Collection

The NSMO is a recurring quarterly survey of individuals who have recently obtained a loan secured by a first mortgage on single-family residential property. The survey questionnaire is sent to a representative sample of approximately 6,000 recent mortgage borrowers each calendar quarter and typically consists of between 90 and 95 multiple choice and short answer questions designed to obtain information about borrowers' experiences in choosing and in taking out a mortgage. The questionnaire may be completed either on paper or electronically online, where it is available in both English and Spanish. A copy of the most recent NSMO questionnaire appears at the end of this document.^[1]

The NSMO is one component of a larger project, known as the “National Mortgage Database” (NMDB) Project, which is a multi-year joint effort of FHFA and the Consumer Financial Protection Bureau (CFPB) (although the NSMO is sponsored only by FHFA). The NMDB Project was created, in part, to satisfy the Congressionally-mandated requirements of section 1324(c) of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992, as amended by the Housing and Economic Recovery Act of 2008 (Safety and Soundness Act).^[2] 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 timely and otherwise unavailable residential mortgage market information to be made available to the public.

In order to fulfill those and other statutory mandates, as well as to support policymaking and research efforts, FHFA and CFPB committed in July 2012 to fund, build and manage the NMDB Project. 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 to the NMDB each quarter. The NMDB also draws information on mortgages in the NMDB datasets from other existing sources, including the Home Mortgage Disclosure Act (HMDA) database that is maintained by the Federal Financial Institutions Examination Council (FFIEC), property valuation models, data files maintained by Fannie Mae and Freddie Mac and by federal agencies, and the NSMO and other surveys.^[3] When fully complete, the NMDB will be a de-identified loan-level database of closed-end first-lien residential mortgages that: Is representative of the market as a whole; contains detailed, loan-level information on the terms and performance of mortgages, as well as 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.

FHFA views the NMDB Project as a whole, including the NSMO, 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 NSMO itself does not. In combination with the other information in the NMDB, the information obtained through the NSMO is also used: (1) To prepare the report to Congress on the mortgage market activities of Fannie Mae and Freddie Mac that FHFA is required to submit under section 1324(c); (2) for research and analysis to support policymaking by FHFA and other federal regulators; and (3) to provide a resource for research and analysis by academics and other interested parties outside of the government. Generally, the information collected will enable regulators and other interested parties to more effectively monitor emerging trends in the mortgage origination process throughout the United States and will allow them to determine more quickly and accurately when the mortgage origination process is changing in a way that is unfavorable to borrowers and consumers.

In particular, the NSMO provides timely information on newly-originated mortgages and those borrowing that is not available from existing 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. The survey is critical to ensuring that the NMDB contains complete and timely information on the characteristics of individual subprime and nontraditional mortgages and on the characteristics of borrowers on such mortgages, including information on the creditworthiness of those borrowers and information sufficient to determine whether those borrowers would have qualified for prime lending. The NSMO questionnaire is designed to elicit this information directly from borrowers, who are likely to be the most reliable and accessible—and, in some cases, the only—source for this information. The questionnaire focuses on topics such as mortgage shopping behavior, mortgage closing experiences, and other information that cannot be obtained from any other source, such as expectations regarding house price appreciation, critical household financial events, and life events such as unemployment, large medical expenses, or divorce. In general, borrowers are not asked to provide information about mortgage terms in the questionnaire since these fields are available in the Experian data. However, the survey collects a limited amount of information on each respondent's mortgage to verify that the credit repository records and survey responses pertain to the same mortgage.

FHFA is also seeking clearance to pre-test the survey questionnaire and related materials from time to time through the use of cognitive testing. FHFA will use information collected through the cognitive testing 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 will also be used help the Agency decide on how best to organize and format the survey questionnaires.

The OMB control number for the information collection is 2590-0012. The current clearance for the information collection expires on December 31, 2016.

B. Burden Estimate

FHFA has analyzed the hour burden on members of the public associated with conducting the survey (12,000 hours) and with pre-testing the survey materials (30 hours) and estimates the total annual hour burden imposed on the public by this information collection to be 12,030 hours. The estimate for each phase of the collection was calculated as follows:

I. Conducting the Survey

FHFA estimates that the NSMO questionnaire will be sent to 24,000 recipients annually (6,000 recipients per quarterly survey × 4 calendar quarters). Although, based on historical experience, the Agency expects that only 30 to 35 percent of those surveys will be returned, it has assumed that all of the surveys will be returned for purposes of this burden calculation. Based on the reported experience of respondents to prior NSMO questionnaires, FHFA estimates that it will take each respondent 30 minutes to complete the survey, including the gathering of necessary materials to respond to the questions. This results in a total annual burden estimate of 12,000 hours for the survey phase of this collection (24,000 respondents × 30 minutes per respondent = 12,000 hours annually).

II. Pre-Testing the Materials

FHFA estimates that it will pre-test the survey materials with 30 cognitive testing participants annually. The estimated participation time for each participant is one hour, resulting in a total annual burden estimate of 30 hours for the pre-testing phase of the collection (30 participants × 1 hour per participant = 30 hours annually).

C. 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 survey respondents, including through the use of automated collection techniques or other forms of information technology.

Dated: September 7, 2016.

Kevin Winkler,

Chief Information Officer, Federal Housing Finance Agency.

Footnotes

1.  Fully formatted copies of the questionnaire in both English and Spanish can be accessed online at: http://www.fhfa.gov/​Homeownersbuyer/​Pages/​National-Survey-of-Mortgage-Originations.aspx.

2.  12 U.S.C. 4544(c).

3.  In addition to the NSMO, FHFA has recently begun to collect data through a new survey called the American Survey of Mortgage Borrowers (ASMB). While the NSMO solicits information about the experiences of borrowers who have recently obtained a mortgage, the ASMB solicits information on borrowers' experience with maintaining their existing mortgages. OMB has cleared the ASMB under the PRA and assigned it control no. 2590-0015, which expires on July 31, 2019.