2011-23970. Notice of Proposed Information Collection; Comment Request; Local Appeals to Single-Family Mortgage Limits

AGENCY:

Office of the Assistant Secretary for Housing, HUD.

ACTION:

Notice.

SUMMARY:

The proposed information collection requirement described below will be submitted to the Office of Management and Budget (OMB) for review, as required by the Paperwork Reduction Act. The Department is soliciting public comments on the subject proposal.

DATES:

Comments Due Date: November 21, 2011.

ADDRESSES:

Interested persons are invited to submit comments regarding this proposal. Comments should refer to the proposal by name and/or OMB Control Number and should be sent to: Reports Liaison Officer, Department of Housing and Urban Development, 451 7th Street, SW., Washington, DC 20410, Room 9120 or the number for the Federal Information Relay Service (1-800-877-8339).

FOR FURTHER INFORMATION CONTACT:

Program Contact, Arlene Nunes, Director, Home Mortgage Insurance Division, Office of Single Family Program Development, Department of Housing and Urban Development, 451 7th Street, SW., Washington, DC 20410, telephone [phone] (this is not a toll free number) for copies of the proposed forms and other available information.

SUPPLEMENTARY INFORMATION:

The Department is submitting the proposed information collection to OMB for review, as required by the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35, as amended).

This Notice is soliciting comments from members of the public and affected agencies concerning the proposed collection of information to: (1) Evaluate whether the proposed collection is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility; (2) Evaluate the accuracy of the agency's estimate of the burden of the proposed collection of information; (3) Enhance the quality, utility, and clarity of the information to be collected; and (4) Minimize the burden of the collection of information on those who are to respond; including the use of appropriate automated collection techniques or other forms of information technology, e.g., permitting electronic submission of responses.

This Notice also lists the following information:

Title of Proposal: Local Appeals to Single-Family Mortgage Limits.

OMB Control Number, if applicable: 2502-0302.

Description of the need for the information and proposed use: HUD has allowed interested parties to submit appeals in support of higher loan amounts. HUD's current regulations for loan-limit appeals date back to the early 1980's. Section 203.18(b) of the Code of Federal Regulations (CFR) permits any party to request an alternative mortgage loan limit to the one established by the Secretary in any area of country at any time. The Federal Housing Administration originally issued Mortgagee Letter 95-27, dated June 2, 1995, which outlined the appeal process, and Mortgagee Letter 2007-01, dated January 3, 2007, subsequently re-emphasized the basic appeal process and added requirements for data used in non-disclosure states and an optional procedures for reviewing new construction sales data. At that time, there were no comprehensive, national data bases of home sale transactions. Appeals by interested parties were also an important part of the loan-limit determination process. Most often, requestors would provide lists of sales from local Multiple Listing Services, which were reviewed by local HUD field offices or, later, Homeownership Centers, for validity and use in updating loan limits.

Starting in 2008, with the passage of the Economic Stimulus Act of 2008 (ESA), HUD developed a new centralized procedure for managing and updating FHA loan limits. This procedure took advantage of newly available national data sources that compile sale transaction information from county deed recorders, using those data to compute median prices. Area median prices are the fundamental factor used to calculate maximum mortgage amounts. Having this data negates the need for appeals in covered areas because HUD already has access to complete information on home sales. Since 2008, the availability of comprehensive data has increased to where in 2010 it was available to HUD for over 2,000 of the more than 3,200 counties and county-equivalent areas across the country. Counties for which these data are not readily available to HUD generally either have too few sale transaction to compute reliable median prices, or else are immaterial to the process because median prices are sufficiently below the level that would trigger eligibility for a “high-cost area” loan limits above the national floor. For thin-data counties, HUD uses indirect sources to compute median prices, relying instead upon a combination of information to develop best estimates of median prices/values that match the time period of the transaction data used for other counties.

Since these new procedures took effect in 2008, under suspension of published regulations, the number of appeals received and accepted by FHA has dropped to zero. For the 2010 loan limits, only one appeal was received, and that was rejected because HUD already had comprehensive sale price data for the subject county. For the 2011 loan limits, no appeals were received. As a result, the need for an appeals process to inform HUD of local home price trends is no longer necessary.

Agency form numbers, if applicable: None.

Estimation of the total numbers of hours needed to prepare the information collection including number of respondents, frequency of response, and hours of response: The number of burden hours is 119. The number of respondents is 17, which is based on the actual number of requests received since 2008. The number of responses is 17 and the frequency of response is one per appeal. The burden hour per response is 7. The Federal government burden has reduced over the past 3 years. In 2010, only one appeal was received but rejected due to HUD having sufficient data in support of loan limit. In 2011, no appeals were received.

Status of the proposed information collection: This is an extension of a currently approved collection. HUD is still proceeding with the request for renewal of the subject information collection pending OMB's review and approval of HUD's request to eliminate regulations on the appeal process in its entirety.

Authority: The Paperwork Reduction Act of 1995, 44 U.S.C., Chapter 35, as amended.

Dated: September 14, 2011.

Ronald Y. Spraker,

Associate General Deputy Assistant Secretary for Housing-Associate Deputy Federal Housing Commissioner.