2011-24791. Notice of Order: Revisions to Enterprise Public Use Database Incorporating High-Cost Single-Family Securitized Loan Data Fields and Technical Data Field Changes

AGENCY:

Federal Housing Finance Agency.

ACTION:

Notice of Order.

SUMMARY:

Section 1127 of the Housing and Economic Recovery Act of 2008 (HERA) amended section 1326 of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (Safety and Soundness Act) by requiring that, subject to privacy considerations as described in section 304(j) of the Home Mortgage Disclosure Act of 1975 (HMDA), the Director of the Federal Housing Finance Agency (FHFA) shall make public certain data related to high-cost single-family loans purchased and securitized by the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac) (collectively, the Enterprises) collected by the Director under section 1324(b)(6) of the Safety and Soundness Act, as amended by HERA. See 12 U.S.C. 4544(b)(6), 4546(d).

FHFA has adopted an Order that implements the changes required by HERA by revising the single-family matrix in FHFA's Public Use Database (PUDB) to include data fields for the high-cost single-family securitized loans data in a new National File C, effective for 2010 and beyond. The Order also makes technical changes to the single-family and multifamily data matrices of the PUDB, effective for 2010 and beyond, to conform the data fields to existing PUDB data reporting practices and HERA changes. This Notice of Order sets forth FHFA's Order with accompanying Appendix containing the revised single-family and multifamily matrices, and describes the new and revised data fields.

DATES:

Effective Date of the Order: The Order with accompanying Appendix is effective on September 21, 2011.

FOR FURTHER INFORMATION CONTACT:

For questions on data or methodology, contact: Brian Doherty, Supervisory Policy Analyst, [phone], or Ian Keith, Senior Program Analyst, [phone], Office of Housing & Regulatory Policy, 1625 Eye Street, NW., Washington, DC 20006. mailto:[e-mail]. For legal questions, contact: Sharon Like, Managing Associate General Counsel, [phone], Office of General Counsel, 1700 G Street, NW., Fourth Floor, Washington, DC 20552. These are not toll free numbers. The telephone number for the Telecommunications Device for the Hearing Impaired is [phone].

SUPPLEMENTARY INFORMATION:

I. Background

A. The Enterprises

The Enterprises are government-sponsored enterprises chartered by Congress for the purpose of establishing secondary market facilities for residential mortgages. See 12 U.S.C. 1716 et seq.; 12 U.S.C. 1451 et seq. Congress established the Enterprises to provide stability in the secondary market for residential mortgages, respond appropriately to the private capital market, provide ongoing assistance to the secondary market for residential mortgages, and promote access to mortgage credit throughout the nation. Id.

FHFA is responsible for ensuring that the Enterprises operate in a safe and sound manner, including maintenance of adequate capital and internal controls, that their operations and activities foster liquid, efficient, competitive, and resilient national housing finance markets, and that they carry out their public policy missions through authorized activities. See 12 U.S.C. 4513.

On September 6, 2008, the Director of FHFA (Director) appointed FHFA as conservator of the Enterprises in accordance with the Safety and Soundness Act, as amended by HERA, to maintain the Enterprises in a safe and sound financial condition and to help assure performance of their public mission. The Enterprises remain under conservatorship at this time.

B. Statutory Requirements

Section 1127 of HERA amended section 1326 of the Safety and Soundness Act by adding a new paragraph (d) which states that, subject to the privacy restrictions described in section 304(j) of HMDA,^[1] the Director shall, by regulation or order, make public certain information relating to single-family mortgage data of the Enterprises: (1) The same data from the Enterprises that is required of insured depository institutions under HMDA; and (2) information collected by the Director under section 1324(b)(6). See 12 U.S.C. 4544(b)(6), 4546(d). Section 1324(b)(6), in turn, part of a section describing the contents of FHFA's Annual Housing Activities Report (AHAR) to Congress, requires FHFA to “compare the characteristics of high-cost loans purchased and securitized, [by each Enterprise] where such securities are not held on portfolio to loans purchased and securitized, where such securities are either retained on portfolio or repurchased by the [E]nterprise, including such characteristics as—(A) The purchase price of the property that secures the mortgage; (B) the loan-to-value ratio of the mortgage, which shall reflect any secondary liens on the relevant property; (C) the terms of the mortgage; (D) the creditworthiness of the borrower; and (E) any other relevant data, as determined by the Director.” See 12 U.S.C. 4544(b)(6).

Section 1323, as amended, also includes a new paragraph (d) which states that data submitted under this section by an Enterprise shall be made publicly available no later than September 30 of the year following the year to which the data relates. 12 U.S.C. 4543(d).^[2]

HERA also amended the Safety and Soundness Act to make changes to the Enterprise housing goals and related definitions. The previous low- and moderate-income housing goal, special affordable housing goal, and underserved areas housing goal are no longer effective commencing in 2010. See 12 U.S.C. 4561 through 4563. HERA required the Director of FHFA to establish new housing goals effective for 2010 and beyond. The new housing goals include four goals for single-family, owner-occupied housing, one multifamily special affordable housing goal, and one multifamily special affordable housing subgoal. The single-family housing goals target purchase money mortgages for low-income families, families that reside in low-income areas, and very low-income families, and refinancing mortgages for low-income families. See 12 U.S.C. 4562. The multifamily special affordable housing goal targets multifamily housing affordable to low-income families, and the multifamily special affordable housing subgoal targets multifamily housing affordable to very low-income families. See 12 U.S.C. 4563. HERA amended the definition of “very low-income” from 60 percent or less of area median income (AMI) to 50 percent or less of AMI. See 12 U.S.C. 4502(24).

C. Description of Enterprise Reporting and Current PUDB Matrices

The PUDB matrices are data dictionaries that describe the data fields provided in the public release of the data in the PUDB. The PUDB contains Enterprise single-family and multifamily mortgage loan-level data reported to FHFA by the Enterprises, including data elements that have been determined to lose their proprietary character when categorized in ranges or otherwise adjusted or recoded. For single-family mortgage data, there currently are three separate files: A Census Tract File that identifies the census tract location of the mortgaged properties; a National File A containing loan-level data on owner-occupied one-unit properties but without census tract identifiers; and a National File B containing unit-level data on all single-family properties without census tract identifiers. For multifamily data, there are two separate files: A Census Tract File that identifies the census tract location of the mortgaged properties; and a National File that does not identify the location of the mortgaged properties but contains mortgage-level data and unit class-level data on all multifamily properties. The Enterprises also separately report to FHFA certain single-family and multifamily mortgage data for safety and soundness and other regulatory purposes.

II. Summary of Order's Revisions to Single-Family and Multifamily Matrices in PUDB

FHFA has adopted the Order below which revises the PUDB single-family matrix to incorporate a new National File C containing new data fields applicable to 2010 and subsequent years for the single-family high-cost securitized loans purchased and securitized by the Enterprises. Specifically, National File C contains the following data fields related to the section 1324(b)(6) high-cost securitized loan characteristics: Purchase Price; Loan-to-Value Ratio (LTV) at Origination (also released in National File A); Product Type; Term of Mortgage at Origination; Amortization Term; Interest Rate at Origination; Credit Score; Portfolio Flag; and Percent Repurchased. In addition, National File C includes the following other relevant data fields also released in mortgage-level National File A: Enterprise Flag; Loan Number; 2000 Census Tract—Percent Minority; Tract Income Ratio; Borrower Income Ratio; Purpose of Loan; and Federal Guarantee. A more detailed discussion of National File C is contained in Section III. below.

In addition, the Order makes technical changes to the single-family and multifamily data matrices of the PUDB applicable to 2010 and subsequent years to conform the data fields to existing PUDB data reporting practices and HERA changes.

Both the Order and Appendix containing the revised single-family and multifamily matrices are set forth at the end of this Notice of Order. PUDB Data Dictionaries that further describe the revised single-family PUDB files and the new National File C, along with the revised multifamily PUDB files, will be made available on FHFA's public Web site at http://www.fhfa.gov/​Default.aspx?​Page=​137.

III. Revisions to Single-Family Matrix in PUDB for High-Cost Securitized Loans

As discussed above, sections 1324(b)(6) and 1326(d)(2) of the Safety and Soundness Act require FHFA to publicly disclose the following data characteristics of single-family high-cost loans purchased and securitized by the Enterprises that are not held on portfolio, or are retained on portfolio or repurchased by the Enterprises: (A) The purchase price of the property that secures the mortgage; (B) the loan-to-value ratio of the mortgage, which shall reflect any secondary liens on the relevant property; (C) the terms of the mortgage; (D) the creditworthiness of the borrower; and (E) any other relevant data, as determined by the Director. Section 1324(b)(6) does not define the term “high-cost” or the other loan characteristic terms in paragraphs (A) through (D), necessitating that FHFA define the terms in order to implement the requirements of HERA. The data fields added in National File C for these high-cost loans and their definitions are described below.

The new data fields are not subject to regulatory and statutory processes for proprietary determinations that might otherwise apply to the release of such data, since the disclosure of these data is explicitly required by HERA. However, certain data fields are recoded differently from other single-family PUDB Files, or disclosed in National File C by ranges or categories, in order to minimize the possibilities for cross-linking of data elements with data fields in the other single-family PUDB Files and any resulting disclosure of confidential or proprietary information or personally identifiable information.

The Safety and Soundness Act, as amended by HERA, does not define the term “high-cost.” Accordingly, FHFA has discretion to define the term. There is no direct HERA legislative history providing guidance on the meaning of the term from which FHFA might draw in exercising that discretion. There are a variety of loan attributes in FHFA's databases that could be used, singularly or in some combination, to define the “high-cost” loans selected for inclusion in the PUDB. These loan characteristics include the HMDA rate spread, original mortgage interest rate, LTV, and borrower credit score. Another option is to define “high-cost” loan using the Home Ownership and Equity Protection Act (HOEPA) “high-cost mortgage” definition.

After considering these various options, FHFA has decided to define “high-cost” loans by reference to the HMDA rate spread. The HMDA rate spread is a data field reported by lenders pursuant to HMDA that is released annually by the Federal Financial Institutions Examination Council (FFIEC). These loans are identified in Federal Reserve Board (FRB) analyses as “higher-priced” loans.^[3] For 2010 and beyond, the HMDA rate spread represents the difference between the Annual Percentage Rate (APR) and a survey-based estimate of APRs currently offered on prime mortgage loans of a comparable type. For mortgage loans with an application date prior to October 1, 2009, the minimum rate spread that must be reported by lenders for first liens is generally 3.0 percent. For mortgage loans with an application date on or after October 1, 2009, the minimum rate spread that must be reported by lenders for first liens is 1.5 percent.^[4] See 12 CFR 203.4(a)(12). FHFA will use the HMDA rate spread data in FHFA's databases to select the “high-cost” loans for inclusion in National File C.

FHFA has adopted the HMDA rate spread definition as the definition of “high-cost” because it has a logical relation to heightened cost by virtue of being a rate spread, is simple and widely understood, and because the Enterprises have purchased significant numbers of such loans, it appears to divide loans into categories in a way that meaningfully implements the statutory purpose.^[5] Further, because the Enterprises may continue to purchase loans with HMDA rate spreads, the Enterprises and FHFA have processes to capture this loan data for inclusion in the PUDB and for performing the comparative analysis, thereby enabling implementation of the HERA requirement.

Based on the data reported by the Enterprises, in 2010, Freddie Mac did not purchase and securitize any first mortgages with a HMDA rate spread at or above 1.5 percent. Fannie Mae purchased and securitized a total of 13,841 first mortgages (with an unpaid principal balance (UPB) of $2.08 billion) with a HMDA rate spread. Of these total loans, 834 loans (with a UPB of $139.9 million) were repurchased as of year-end, and 13,007 loans (with a UPB of $1.94 billion) were not repurchased as of year-end. The 834 loans repurchased represent 6 percent of the total loans (6.7 percent of UPB) with a validly identified rate spread that were purchased and securitized during 2010.

FHFA considered whether to define “high-cost” loan according to the HOEPA “high-cost mortgage” definition in section 103(aa) of the Truth in Lending Act (TILA), as added by the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act).^[6] Prior to the Dodd-Frank Act, the term “high-cost” was not used in section 103(aa) with respect to mortgages subject to HOEPA, and residential mortgage transactions were exempted from coverage. However, the term “high-cost” mortgage had been used in previous proposed amendments to TILA, and has been used by federal regulators for many years to refer to HOEPA loans. Section 103(aa) of TILA define a “high cost mortgage” generally as a consumer credit transaction that is secured by a first mortgage on the consumer's principal dwelling, including residential mortgage transactions, where the APR is more than 6.5 percentage points above the average prime offer rate (APOR) for a comparable transaction.^[7] Loans meeting the “high-cost mortgage” definition are subject to other requirements of HOEPA. The new 6.5 percentage points rate spread trigger is lower than the 8 percentage points trigger (based on the yield on Treasury securities having a comparable period of maturity) in FRB's regulation in effect prior to enactment of the Dodd-Frank Act.^[8]

However, the Enterprises do not, and, at the time HERA was under consideration in Congress, did not, acquire HOEPA loans other than the few loans purchased through lender errors, which are then subject to recourse.^[9] In addition, the Enterprise housing goals regulation does not give credit for Enterprise purchases of HOEPA loans and, in fact, discourages their purchase by including these loans in housing goal denominators.^[10] Thus, using the HOEPA definition, there would be no loan data for FHFA to analyze and publicly release, and FHFA would not be implementing the HERA high-cost loan requirements. More significantly, using the HOEPA definition would appear to defeat the purpose of the statutory provision, which appears to assume that there is a meaningful population of loans to be distinguished and which was adopted at a time when there was no meaningful population of Enterprise HOEPA loans.

FHFA also considered whether to define “high-cost” loan based on some appropriate combination of high original mortgage interest rate, low credit score, and high LTV, which data is available in FHFA's databases. For example, a “high-cost” loan could be defined as a loan with an interest rate above 6 percentage points, a borrower credit score below 660, and an LTV greater than 80 percent. These loan characteristics, at specific cutoff values, can be associated with loans that would be considered high-cost by many analysts. However, this definition would not conform with either the HOEPA “high-cost mortgage” or the HMDA “higher-priced” loan definitions, and may differ from industry usage of the term. The specific cutoff values adopted by FHFA would be subjective, and other cutoff values may be equally defensible. The current economic environment may also influence the selection of the cutoffs, e.g., periods of declining interest rates, as in 2008-2009, would result in a different cutoff than periods where interest rates are rising. In addition, credit scores would not be directly comparable across years. For example, a credit score of 660 in one year may be “better” or “worse” than the same score in a different year. Finally, the loan characteristics could also be expected to vary by product type, e.g., fixed rate mortgage v. adjustable rate mortgage.

A. Single-Family Data Field 61: Purchase Price

Section 1324(b)(6)(A), in conjunction with section 1326(d)(2), requires public disclosure of the purchase price of the property with respect to the high-cost securitized loan. New data field 61 in National File C designates the purchase price of the property for the high-cost securitized loan, as reported by the Enterprises to FHFA. Where the purchase price is not available, FHFA will attempt to estimate the purchase price by dividing the origination unpaid principal balance (UPB) field by the LTV at origination. The reported or estimated values will be rounded to the nearest $1,000, consistent with the release of HMDA data fields in the PUDB. The value “999999999=Missing” will be used where the purchase price cannot be obtained through either method and is then considered missing.

B. Single-Family Data Field 19: Loan-to-Value Ratio (LTV) at Origination (or CLTV Where Available)

Section 1324(b)(6)(B), in conjunction with section 1326(d)(2), requires public disclosure of “the loan-to-value ratio of the mortgage, which shall reflect any secondary liens on the relevant property,” with respect to the high-cost securitized loan. Combined LTV (CLTV) is the ratio of the total loan amount to the value of the property, with the total loan amount consisting of the UPB at origination of the first lien and any subordinate liens. Data field 19 in National File C designates the LTV at origination, or CLTV where available, for the high-cost securitized loan. Consistent with the recoding in National File A, the data will be released in National File C using the following values: 1 = >0-<=60%; 2 = >60-<=80%; 3 = >80-<=90%; 4 = >90-<=95%; 5 = >95%; 9 = Missing. Both Enterprises currently collect and report CLTV to FHFA and will be required to continue reporting this data for purposes of the PUDB and comparative analysis in subsequent years.

In recent years, the Enterprises' purchases of single-family secondary liens have been statistically insignificant in number as they have purchased few, if any, such liens. Secondary liens are priced and underwritten very differently from first liens, and their LTVs are not always available or reported by originators in a consistent manner. In addition, inclusion of secondary lien LTVs in National File C could allow for cross-linking with other single-family PUDB Files and the potential release of personally identifiable information. For these reasons, FHFA is not including single-family secondary liens in National File C.

C. Terms of the Mortgage—Single-Family Data Field 26: Product Type; Single-Family Data Field 29: Term of Mortgage at Origination; Single-Family Data Field 30: Amortization Term; Single-Family Data Field 62: Interest Rate at Origination

Section 1324(b)(6)(C), in conjunction with section 1326(d)(2), requires public disclosure of “the terms of the mortgage” with respect to the high-cost securitized loan. The terms of a mortgage in the housing finance industry are generally based on product type, interest rate, and duration (term of mortgage at origination and amortization term). Accordingly, data based on product type, interest rate and duration will be released in the PUDB under the data fields further described below.

1. Single-Family Data Field 26: Product Type

Data field 26, released in National File C, designates the product type for the high-cost securitized loan, which will be released using the following values: 1 = Fixed-Rate Mortgage; 2 = ARM (Adjustable Rate Mortgage); 3 = Other; 9 = Missing. “Other” can include products such as graduated equity or graduated payment mortgages, balloon mortgages, and home equity conversion mortgages.

2. Single-Family Data Field 29: Term of Mortgage at Origination

Data field 29, released in National File C, designates the term of the high-cost securitized loan at origination, which will be released using the following values: 1 = 30-year; 2 = 15-year; 3 = Other terms; 9 = Missing.

3. Single-Family Data Field 30: Amortization Term

Data field 30, released in National File C, designates the amortization term of the high-cost securitized loan, which will be released using the following values: 1 = 30-year; 2 = 15-year; 3 = Other terms including non-amortizing loans; 9 = Missing.

4. Single-Family Data Field 62: Interest Rate at Origination

New data field 62, released in National File C, designates the contract interest rate of the high-cost securitized loan at origination, which will be released as ranges using the following values: 1 = less than 4.00%; 2 = 4.00-<4.50%; 3 = 4.50-<5.00%; 4 = 5.00-<5.50%; 5 = 5.50-<6.00%; 6 = 6.00-<6.50%; 7 = 6.50-<7.00%; 8 = 7.00-<7.50%; 9 = 7.50-< 8.00%; 10 = 8.00% or greater; 99 = Missing. The Enterprises collect and report the note's original interest rate.

D. Creditworthiness of the Borrower—Single-Family Data Field 60: Credit Score

Section 1324(b)(6)(D), in conjunction with section 1326(d)(2), references “creditworthiness of the borrower” as a loan characteristic required to be publicly disclosed with respect to the high-cost securitized loan. FHFA believes that borrower credit score best captures the concept of creditworthiness of the borrower, as the common regulatory and industry definitions of creditworthiness gravitate towards the use of proprietary credit scores computed by credit reporting companies.

FHFA currently receives multiple borrower credit score information in the form of credit scores from the Enterprises, representing each borrower, credit reporting agency and date associated with the credit score issuance. New data field 60, released in National File C, designates the borrower credit score most applicable to the high-cost securitized loan. This credit score is derived by first selecting from all of the borrower's credit scores only the scores between 300 and 1000, which FHFA views as a reasonable range of credit score values. The earliest credit score date of those scores, i.e., the date closest to the loan origination date, is then identified, and only those scores having that date are selected. The lowest borrower number of those remaining scores, which represents the primary borrower, is then identified and only those scores having that borrower number are selected. Finally, the lowest credit score of those remaining scores is selected as the score most likely to be reflected in determining the loan's interest rate and resulting HMDA rate spread. The data will be released using the following values: 1 = less than 620; 2 = 620-<660; 3 = 660-<700; 4 = 700-<760; 5 = 760 or greater; 9 = Missing.

E. Other Relevant Data

Section 1324(b)(6)(E), in conjunction with section 1326(d)(2), requires public disclosure of any other relevant data with respect to the high-cost securitized loan, as determined by the Director. Inclusion in National File C of certain fields that are also included in other PUDB Files will allow useful comparisons of the high-cost securitized loan data to data in those other Files.

Specifically, the following fields will be released in National File C: Data field 0: Enterprise Flag (indicating whether the loan was purchased by Fannie Mae or Freddie Mac); data field 1: Loan Number (released as Sequential Number); data field 11: 2000 Census Tract-Percent Minority (minority population in the census tract where the property securing the loan is located); data field 14: Tract Income Ratio (ratio of tract median income to the applicable AMI); data field 17: Borrower Income Ratio (ratio of borrower's income to the applicable area median income); data field 22: Purpose of Loan (home purchase or refinance/other); and data field 27: Federal Guarantee (conventional loan or Federally guaranteed or insured).

The data will be included in National File C without providing sufficient linking variables to associate the more sensitive data (credit score and interest rate) to loans at the tract level in the Census Tract File. In particular, the HMDA rate spread field will not be released in National File C as this field is already released in the Census Tract File as required by HERA.

F. Not Held on Portfolio or Retained on Portfolio—Single-Family Data Field 63: Portfolio Flag; Single-Family Data Field 64: Percent Repurchased

Section 1324(b)(6) requires FHFA to compare the characteristics discussed above of high-cost loans purchased and securitized, where such securities are not held on portfolio to loans purchased and securitized, where such securities are either retained on portfolio or repurchased by the Enterprise.

1. Single-Family Data Field 63: Portfolio Flag

New data field 63, released in National File C, designates the following values:

1 = Not held on portfolio: Indicates the security backed by the high-cost loan was sold in its entirety by the Enterprise during the calendar year and not repurchased as of year-end.

2 = Retained on portfolio: Indicates the security backed by the high-cost loan was sold in its entirety by the Enterprise during the calendar year, but that all or a portion of the security collateralized by such high-cost loan was repurchased by the Enterprise during such calendar year and held at year-end.

These two data field values are intended to categorize the universe of loans with a HMDA rate spread that are purchased and securitized by the Enterprises.

2. Single-Family Data Field 64: Percent Repurchased

To accurately reflect the economic value of the high-cost securitized loans retained on portfolio, new data field 64, released in National File C, identifies the percentage of the outstanding balance of the security collateralized by the high-cost loan that the Enterprise repurchased during the calendar year and held at year-end. Where the Enterprise did not repurchase any portion of the security (portfolio flag = 1), the value will be 0. Where the Enterprise repurchased all of the security (portfolio flag = 2), the value will be 1. Where the Enterprise repurchased a portion of the security collateralized by the high-cost loan (portfolio flag = 2), the value will be the percentage of the security repurchased by the Enterprise represented as a decimal between 0 and 1.

IV. Technical Revisions to Data Fields in the PUDB Matrices

A. Revisions To Conform to Existing PUDB Reporting Practices

FHFA has made technical revisions to certain data fields in the PUDB matrices to conform the data fields to existing PUDB data reporting practices, as further discussed below.

1. Single-Family Data Field 23: Cooperative Unit Mortgage

This data field identifies single-family housing units that are part of a cooperative building secured by a mortgage or “blanket loan.” FHFA no longer requires the Enterprises to report this data for housing goals purposes. Accordingly, footnote (7) to this data field in the single-family matrix indicates that this data field is not applicable for 2010 and beyond.

2. Single-Family Data Field 28: RTC/FDIC

This data field identifies loans purchased by the Enterprises that were made by the Resolution Trust Corporation (RTC) or the Federal Deposit Insurance Corporation (FDIC) and met certain other statutory criteria. FHFA no longer requires the Enterprises to report this data for housing goals purposes. Accordingly, footnote (7) to this data field in the single-family matrix indicates that the data field is not applicable for 2010 and beyond.

3. Single-Family and Multifamily Data Fields 31 and 30: Lender Institution Name; Single-Family and Multifamily Data Fields 32 and 31: Lender City; Single-Family and Multifamily Data Fields 33 and 32: Lender State

These data fields identify the name, city and state of the lender that sold the loan to the Enterprise. FHFA no longer requires the Enterprises to report this data for housing goals purposes. Accordingly, footnotes (7) and (5) to this data field in the single-family and multifamily matrices, respectively, indicate that this data field is not applicable for 2010 and beyond.

4. Single-Family Data Field 37: Mortgage Purchased Under Enterprise's Community Lending Program

This data field identifies mortgages purchased under Enterprise-specific landing programs. FHFA no longer requires the Enterprises to report this data for housing goals purposes. Accordingly, footnote (7) to this data field in the single-family matrix indicates that this data field is not applicable for 2010 and beyond.

5. Single-Family Data Field 39 and Multifamily Data Field 37: Enterprise Real Estate Owned

This data field identifies properties owned by an Enterprise as a result of foreclosure or other impairment. FHFA no longer requires the Enterprises to report this data for housing goals purposes. Accordingly, footnotes (7) and (5) to this data field in the single-family and multifamily matrices, respectively, indicate that the data field is not applicable for 2010 and beyond.

6. Multifamily Data Field 38: Public Subsidy Program

This data field identifies the type of public subsidy, if applicable, provided in connection with a multifamily loan purchased by an Enterprise. FHFA no longer requires the Enterprises to report this data for housing goals purposes. Accordingly, footnote (5) to this data field in the multifamily matrix indicates that this data field is not applicable for 2010 and beyond.

B. Revisions to Conform to HERA Changes

1. Single-Family Data Field 17: Borrower Income Ratio

This data field identifies the ratio of the borrower's annual income (data field 15) to the AMI (data field 16). Effective for 2010 and beyond, HERA eliminated the previous low- and moderate-income housing goal (100 percent of AMI or below) and special affordable housing goal (which includes units affordable at 60 percent of AMI or below) and, among other things, established new single-family housing goals for low-income families (80 percent of AMI or below) and very low-income families (defined by HERA as 50 percent of AMI). Accordingly, footnote (7) to data field 17 in the single-family matrix indicates that the pre-HERA income categories therein are not applicable to 2010 and beyond. FHFA has revised the income categories in data field 17a to reflect the new HERA income limits effective for 2010 and beyond, as indicated in footnote (8) of the single-family matrix.

2. Multifamily Data Field 16: Affordability Category

This data field identifies loans purchased by an Enterprise secured by multifamily properties having a mix of other affordable units such that those units in the property affordable at more than 60 percent but at or below 80 percent of AMI received credit under the pre-HERA special affordable housing goal regardless of property location. Specifically, category 1 of the data field specifies: >=20% are especially-low-income, and <40% are very-low-income. Prior to HERA, the term “especially-low-income” was defined by regulation as 50 percent or less of AMI. See 24 CFR 81.17(d), 81.18(d), 81.19(d). The term “very-low-income” was defined in the Safety and Soundness Act as 60 percent or less of AMI. The mix of units at or below 50 percent or 60 percent of AMI also indicates that a property may be eligible for Low-Income Housing Tax Credits (LIHTC). The affordability category of “50 percent or less of AMI” previously referred to as “especially low-income” was redefined by HERA as “very low-income.” To avoid confusion between these terms while at the same time maintain the affordability definitions for the purpose of identifying properties that may be eligible for LIHTC, FHFA has revised category 1 as follows: 1= >=20% of the units in the property are affordable at or below 50% of AMI, and <40% are affordable at or below 60% AMI.

3. Single-Family Data Field 25 and Multifamily Data Field 24: Special Affordable, Seasoned Loan: Are Proceeds Recycled?

This data field identifies categories of seasoned (originating at least 365 days prior to acquisition by the Enterprise) loans eligible for the special affordable housing goal. Effective for 2010 and beyond, HERA eliminated the special affordable housing goal and the provisions on giving full housing goals credit under the goal to Enterprise purchases or refinancings of existing, seasoned portfolios of loans in conjunction with the origination of additional goals-eligible loans. Accordingly, footnotes (7) and (5) to this data field in the single-family and multifamily matrices, respectively, indicate that the data field is not applicable for 2010 and beyond. In light of the HERA changes, the obsolete regulatory cites in the data fields have also been removed.

4. Single-Family Data Field 27 and Multifamily Data Field 34: Federal Guarantee

This data field identifies the source of the Federal guarantee or insurance of the loan acquired by the Enterprise. In light of changes made by HERA, the obsolete regulatory cites in the data fields have been removed.

5. Single-Family Data Field 55 and Multifamily Data Field 43: Geographically Targeted Indicator

This data field identifies whether a loan purchased by an Enterprise is located in an area defined to be “underserved,” for purposes of meeting the underserved areas housing goal. HERA eliminated the underserved areas housing goal effective for 2010 and beyond. Accordingly, footnotes (7) and (5) to this data field in the single-family and multifamily matrices, respectively, indicate that the data field is not applicable for 2010 and beyond.

V. Applicability of National File C to 2010 and Subsequent Years

FHFA has determined that the new National File C should apply to the Enterprises for 2010 and subsequent years. The Enterprises' HMDA rate spread submissions for 2008-2009 indicate that the HMDA rate spread field is of questionable value for those years because some lenders reported actual APR instead of HMDA rate spread.

For the convenience of the affected parties, the Order is recited below in its entirety. You may access this Order from FHFA's Web site at http://www.fhfa.gov/​Default.aspx?​Page=​43. The Order will be available for public inspection and copying at the Federal Housing Finance Agency, Fourth Floor, 1700 G St., NW., Washington, DC 20552. To make an appointment, call [phone].

VI. Order

Revisions to Enterprise Public Use Database Incorporating High-Cost Single-Family Securitized Loan Data Fields and Technical Data Field Changes

Whereas, section 1323(a)(1) of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (Safety and Soundness Act), as amended, 12 U.S.C. 4543(a)(1), requires the Director of the Federal Housing Finance Agency (FHFA) to make available to the public the non-proprietary single-family and multifamily loan-level mortgage data elements submitted to FHFA by the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac) (collectively, the Enterprises) in their mortgage reports;

Whereas, the mortgage data submitted by Fannie Mae and Freddie Mac are contained in their reports required under section 309(m) of the Federal National Mortgage Association Charter Act, as amended, 12 U.S.C. 1723a(m), and section 307(e) of the Federal Home Loan Mortgage Corporation Act, as amended, 12 U.S.C. 1456(e), respectively (hereafter, Charter Acts), and include mortgage data characteristics of single-family and multifamily mortgagors and data on the Enterprises' single-family and multifamily mortgage purchases;

WHEREAS, the Enterprises also separately report to FHFA certain single-family and multifamily mortgage data for safety and soundness and other regulatory purposes;

Whereas, section 1127 of the Housing and Economic Recovery Act of 2008 (HERA), Pub. L. 110-289 (July 30, 2008), amended section 1326 of the Safety and Soundness Act by requiring that, subject to privacy considerations as described in section 304(j) of the Home Mortgage Disclosure Act of 1975 (HMDA), the Director of FHFA shall, by regulation or order, make public certain data related to high-cost single-family loans purchased and securitized by the Enterprises collected by the Director under section 1324(b)(6) of the Safety and Soundness Act, as amended by HERA, see 12 U.S.C. 4544(b)(6), 4546(d);

Whereas, to comply with sections 1324(b)(6) and 1326(d) of the Safety and Soundness Act, as amended, it is necessary to revise the single-family matrix of FHFA's Public Use Database (PUDB) by adding a new National File C incorporating the high-cost securitized loan data elements required thereunder;

Whereas, high-cost single-family securitized loan data containing the characteristics set forth in section 1324(b)(6), as further specified in the new National File C, are available in FHFA and Enterprise databases for 2010;

Whereas, technical revisions to certain data fields in the single-family and multifamily matrices of the PUDB are necessary in order to conform the data fields to HERA amendments to the Safety and Soundness Act that eliminated the previous low- and moderate-income housing, special affordable housing, and underserved areas housing goals and established new housing goals and related definitions effective for 2010 and beyond, see 12 U.S.C. 4561 through 4563;

Whereas, additional technical revisions to certain data fields in the single-family and multifamily matrices of the PUDB are necessary in order to conform the data fields to existing PUDB reporting practices;

Now, Therefore, it is hereby ordered as follows:

1. The matrices in FHFA's PUDB are revised, as set forth in the attached Appendix which is incorporated herein by reference, to include: (a) A new single-family National File C containing new data fields applicable to 2010 and subsequent years for the high-cost securitized single-family loan data; and (b) revised data fields in the single-family and multifamily matrices applicable to 2010 and subsequent years to conform to changes made by HERA and existing PUDB reporting practices;

2. The Enterprises shall provide FHFA with the mortgage data required to populate the data fields described in the revised single-family and multifamily matrices in the Appendix; and

3. This Order modifies the FHFA Order of July 1, 2010 (75 FR 41180, 41189 (July 15, 2010)) and shall be effective until such time as FHFA determines that it is necessary and/or appropriate to withdraw or modify it.

Signed at Washington, DC, this 21st day of September, 2011.

Edward J. DeMarco,

Acting Director, Federal Housing Finance Agency.

Dated: September 21, 2011.

Edward J. DeMarco,

Acting Director, Federal Housing Finance Agency.

Footnotes

1.  Section 304(j) of HMDA addresses Loan Application Register (LAR) information and describes, among other things, the manner in which an applicant's privacy interests are to be protected in response to a request for disclosure from the public, including removal of the applicant's name and identification number, the date of the application, and the date of any determination by the institution with respect to such application. In addition, the disclosure of information must ensure that depository institutions are protected froM, liability under any Federal or State privacy laws.

2.  FHFA's Order revises the single-family and multi-family data matrices, effective for 2010 and beyond. The Enterprises' HMDA rate spread submissions for 2008-2009 indicate that the HMDA rate spread is of questionable value for those years. See discussion in section V. below.

3.  http://federalreserve.gov/​pubs/​bulletin/​2010/​pdf/​2009_​HMDA_​final.pdf at page A39 for example.

4.  http://www.ffiec.gov/​ratespread/​newcalc.aspx.

5.  Defining “high cost” as the HMDA rate spread is not, in and of itself, a statement as to whether the loan was originated through subprime lending channels.

6.  Public Law. No. 111-203 (July 21, 2010).

7.  15 U.S.C. 1602(aa) (as amended). The definition of “high-cost mortgage” in TILA, as amended, includes a separate rate spread trigger for subordinate mortgages and mortgages secured by personal property dwellings, as well as for mortgages with certain other features, such as points and fees, that exceed specified thresholds.

8.  See 12 CFR 226.32(a)(1)(i).

9.  The Enterprises' Seller/Servicer Guides specifically prohibit the purchase of HOSPA loans. See Fannie Mae's 2010 Selling Guide, section A3-2-02, and Freddie Mac's Single-Family Seller/Servicer Guide, Volume 1, Chapter 22.33.

10.  See 12 CFR 1282.16(d).