59476 Federal Register / Vol. 69, No. 191 / Monday, October 4, 2004 / Notices 

DEPARTMENT OF HOUSING AND 

URBAN DEVELOPMENT 

[Docket No. FR–4796–N–01] 

RIN 2502–AH96

Notice of Final Order; Government 

Sponsored Enterprises Mortgage Data 

and Annual Housing Activities Report 

Information: Proprietary Information/

Public Use Data

AGENCY: Office of the Assistant 

Secretary for Housing—Federal 

Housing. Commissioner, HUD.

ACTION: Notice of final order.

SUMMARY: This notice sets forth a final 

order of the Department of Housing and 

Urban Development (HUD or 

Department) which provides that certain 

loan-level mortgage data elements 

submitted to HUD by the Federal 

National Mortgage Association (Fannie 

Mae) and the Federal Home Loan 

Mortgage Corporation (Freddie Mac) 

(collectively, the government-sponsored 

enterprises, or GSEs) are classified as 

non-proprietary and shall be made 

available to the public. After careful 

review of the previous proprietary 

orders, the Department is making a 

number of changes to the proprietary 

classification of certain GSE singlefamily and multifamily mortgage data 

elements. The list of data elements that 

HUD is making available to the public 

is described in the following sections. In 

addition, the Department is setting forth 

in the Appendix to this final order the 

loan-level data elements that the 

Department has determined to classify 

as proprietary and non-proprietary. The 

final order implements the Department’s 

prior determination that the unpaid 

principal balance (UPB) of mortgages in 

the single-family Census Tract File shall 

be released, subject to a top-code 

expressed as a ratio to the current 

conforming loan limit for one-family 

properties. In releasing these data, the 

Department will use the top-coding 

convention already employed for the 

years 1993 through 1995. The 

Department will release the reclassified 

data elements beginning in 2005, via the 

Department’s public use database 

covering the GSEs’ 2004 mortgage 

purchases, and in all future public use 

databases. Finally, the Department is 

making four technical changes with 

respect to the disclosure of data 

elements previously determined by 

HUD to be non-proprietary. This final 

order supersedes the final order of 

October 17, 1996 (1996 Order).

EFFECTIVE DATE OF THE FINAL ORDER: The 

Final Order set forth in this notice is 

effective on October 4, 2004.

FOR FURTHER INFORMATION CONTACT:

Sandra Fostek, Director, Office of 

Government Sponsored Enterprises 

Oversight, Office of Housing, Room 

3150, telephone (202)708–2224. For 

questions on data or methodology, 

contact John L. Gardner, Director, 

Financial Institutions Regulation 

Division, Office of Policy Development 

and Research, Room 8212, telephone 

(202) 708–1464. For legal questions, 

contact Paul S. Ceja, Deputy Assistant 

General Counsel for Government 

Sponsored Enterprises/RESPA, and 

Ronnie Shorenstein, Senior GSE/RESPA 

Division Attorney, Office of the General 

Counsel, Room 9262, telephone (202) 

708–3137. The address for all of these 

persons is Department of Housing and 

Urban Development, 451 Seventh Street, 

SW., Washington, DC 20410. Persons 

with hearing and speech impairments 

may access the phone numbers through 

TTY by calling the Federal Information 

Relay Service at (800) 877–8399.

SUPPLEMENTARY INFORMATION: 

A. The Final Order 

Pursuant to sections 1323 and 1326 of 

the Federal Housing Enterprises 

Financial Safety and Soundness Act 

(FHEFSSA), codified at 12 U.S.C. 4543 

and 4546, the Department has 

determined that certain loan-level 

mortgage data elements, as detailed in 

the attached Appendix and contained in 

the annual loan-level data files that will 

be submitted by Fannie Mae and 

Freddie Mac to the Department in 

accordance with sections 309(m) and (n) 

of the Federal National Mortgage 

Association Charter Act (Fannie Mae 

Charter Act), codified at 12 U.S.C. 

1723a(m) and 1723a(n), and sections 

307(e) and (f) of the Federal Home Loan 

Mortgage Corporation Act (Freddie Mac 

Act), codified at 12 U.S.C. 1456(e) and 

1456(f), respectively, shall be treated as 

non-proprietary information. The 

Appendix further identifies data 

elements that lose their proprietary 

character when categorized in ranges, 

adjusted, or recoded in other ways. The 

data so identified in the Appendix shall 

be made available for public disclosure 

under sections 1323 and 1326 of 

FHEFSSA and HUD’s regulations at 24 

CFR part 81, subpart F. 

This final order concerns whether 

loan-level data elements are proprietary. 

It is not applicable to aggregated 

information on activities that has been 

or will be submitted by the GSEs in 

their Annual Housing Activities Reports 

(AHARs) and Mortgage Reports. It is not 

applicable to aggregations of 

information above the loan-level that 

the Department may produce for various 

reasons, including fulfilling its 

responsibilities to inform the public 

about the GSEs’ activities. 

A detailed discussion of HUD’s 

determinations in this Final Order is set 

forth in Section D below.

B. Background 

1. Statutory Requirements and 

Legislative History Regarding 

Proprietary Data. 

The Federal Housing Enterprises 

Financial Safety and Soundness Act of 

1992, enacted as Title XIII of the 

Housing and Community Development 

Act of 1992, (FHEFSSA) (Pub. L. 102–

550, approved October 28, 1992), 

codified generally at 12 U.S.C. 4501–

4561, requires the Secretary of Housing 

and Urban Development to establish 

and monitor the performance of Fannie 

Mae and Freddie Mac in meeting annual 

goals for purchases of mortgages on 

housing for low- and moderate-income 

families; housing located in central 

cities, rural areas, and other 

underserved areas; and special 

affordable housing (i.e., housing 

meeting the needs of and affordable to 

low income families in low-income 

areas and very low-income families). 

Section 1323 of FHEFSSA, codified at 

12 U.S.C. 4543, provides that the 

Secretary shall make available to the 

public the data submitted by the GSEs 

in the data reports required under 

section 309(m) of the Fannie Mae 

Charter Act and section 307(e) of the 

Freddie Mac Act, except data that the 

Secretary determines, by regulation or 

order pursuant to section 1326, codified 

at 12 U.S.C. 4546, are proprietary. 

Section 1323(b)(2) of FHEFSSA, 

codified at 12 U.S.C. 4543(b)(2), 

specifically provides that the Secretary 

may not restrict access to data 

consisting of income, census tract 

location, race, and gender of mortgagors 

of single-family properties. 

In addition, section 1326 of FHEFSSA 

provides that the Secretary may, by 

regulation or order, provide that certain 

information shall be treated as 

proprietary information and not subject 

to disclosure under section 1323 of 

FHEFSSA, section 309(n)(3) of the 

Fannie Mae Charter Act or section 

307(f)(3) of the Freddie Mac Act. 

Section 1326 of FHEFSSA also states 

that the Secretary shall not provide 

public access to, or disclose to the 

public, any information required to be 

submitted by a GSE under section 

309(n) of the Fannie Mae Charter Act or 

section 307(f) of the Freddie Mac Act 

that the Secretary determines is 

proprietary. Pending the issuance of a 

final decision on the matter, such 

Federal Register / Vol. 69, No. 191 / Monday, October 4, 2004 / Notices 59477

information may not be disclosed to the 

public or a representative of any person 

or agency. 

The legislative history of FHEFSSA 

provides that ‘‘ * * * every effort 

should be made to provide public 

disclosure of the information required to 

be collected and/or reported to the 

regulator consistent with the exemption 

for proprietary data * * *’’ S. Rep. 102–

282, 102d Cong., 2d Sess. 40 (1992). In 

addition, the legislative history 

indicates that Congress intended that 

the GSE public use database help fill the 

‘‘information vacuum’’ on GSE mortgage 

activities and complement the database 

established under the Home Mortgage 

Disclosure Act (HMDA) (see S. Rep. 

102–282, 102d Cong., 2d Sess. 33, 39 

(1992).) 

2. Regulatory and Administrative 

Actions. 

On October 13, 1993, the Department 

published in the Federal Register

Notices of Interim Housing Goals which 

required, among other things, that each 

GSE provide data and other information 

on mortgages purchased, in the form of 

Annual and Quarterly Reports, on their 

respective performance under the 

Interim Housing Goals, and, after the 

end of each year, loan-level 

computerized data files providing 

details on each mortgage purchased (see

58 FR 53048 for Fannie Mae and 58 FR 

53072 for Freddie Mac). 

On June 7, 1994, the Department 

published in the Federal Register a 

Notice of Temporary Order that 

identified certain information contained 

in the GSEs’ loan-level data files 

submitted to HUD that the Department 

had determined to be proprietary 

information (see 59 FR 29514) (the 1994 

Temporary Order). The 1994 Temporary 

Order identified, in its Exhibit A, the 

specific loan-level data elements that 

were covered by the Temporary Order 

and provided that these data elements 

were to be withheld from public 

disclosure. The Department solicited 

public comments in connection with 

this Temporary Order and indicated that 

it would consider these comments 

during its development of a subsequent 

proposed rulemaking to implement its 

statutory authority under FHEFSSA. 

As part of its 1995 proposed and final 

rules to establish regulations governing 

the GSEs, the Department developed 

regulations governing the use of the 

public use database to make available to 

the public loan-level data on the GSEs’

single-family and multifamily mortgage 

purchases. 

In the Department’s December 1, 1995 

final GSE rule (1995 Final Rule) (60 FR 

61846, 61897–8) which implemented 

the Secretary’s GSE regulatory 

authorities, HUD required, for 1996 and 

future years, each GSE to provide data 

and other information on mortgages 

purchased in two forms—Annual 

Housing Activities Reports (AHARs) 

that discuss each GSE’s performance 

under the housing goals, and quarterly 

Mortgage Reports that include aggregate 

data on mortgage purchases and, in the 

second and fourth quarter reports, loanlevel computerized data files that 

provide details on each mortgage 

purchased by each GSE. The data 

required in the loan-level data files 

include, for each mortgage purchased by 

the GSEs: the borrower(s) annual 

income, race, and gender; census tract 

location; other geographic identifiers; 

loan-to-value (LTV) ratio; number of 

units; owner-occupancy status; and 

other details about the mortgage, the 

property, and the borrower(s). The 

information required for the Mortgage 

Reports includes aggregate data 

concerning: the amount of mortgage 

purchases that qualify towards each 

housing goal, classified by number of 

units and dollar volume; borrower(s) 

income and race; location of property; 

and various other categories. (See 24 

CFR part 81, subpart E.) 

In addition, the Department’s 

regulation at 24 CFR 81.74, set forth in 

the 1995 Final Rule, established six 

factors for the Secretary to consider and 

procedures to be followed when the 

Secretary determines whether or not to 

accord proprietary treatment to 

mortgage data or AHAR information.

Section 81.75, which was set forth in the 

1995 Final Rule provided, in part, that: 

Following a determination by the Secretary 

that mortgage data or AHAR information is 

proprietary information under FHEFSSA, the 

Secretary shall expeditiously issue a 

temporary order, final order, or regulation 

withholding the mortgage data or AHAR 

information from the public use database and 

from public disclosure by HUD in accordance 

with 12 U.S.C. 4546.

Section 81.75 further provided that 

the Secretary ‘‘may, from time-to-time, 

by regulation or order, issue a list 

entitled ‘GSE Mortgage Data and AHAR 

Information: Proprietary Information/

Public-Use Data’ providing that certain 

information shall be treated as 

proprietary information’’ and expressly 

authorized the Secretary to ‘‘modify the 

list by regulation or order.’’

The Department set forth in Appendix 

F to the 1995 Final Rule a final order 

identifying the list of data elements that 

HUD had determined under section 

1326 of FHEFSSA to be proprietary 

(and, thus, not available to the public) 

and those data elements that it had 

determined to be non-proprietary and 

available to the public. (See 60 FR 

62001–62005.) The 1995 Final Rule 

stated that Appendix F contained the 

most current listing of data and 

information determined by HUD to be 

proprietary and that it superseded the 

1994 Temporary Order.

The 1995 Final Rule also identified in 

Appendix F the structure of the public 

use database, including that GSE singlefamily data would be released to the 

public in three separate files: a Census 

Tract File that identified the census 

tract location of the mortgaged property, 

a National File A (with mortgage-level 

data on owner-occupied one-unit 

properties but without census tract 

identifiers), and a National File B (with 

unit-level data on all single-family 

properties also without census tract 

identifiers). The GSE multifamily data 

are disclosed in two files, the Census 

Tract File, which identifies the census 

tract location of the mortgaged property 

and the National file, which does not 

identify the location of mortgaged 

properties but contains mortgage level 

data and unit class level data on all 

multifamily properties. 

In 1996, based upon a review of the 

1995 order and comments provided by 

the GSEs, HUD determined that the 

issuance of a new order was needed. 

Therefore, on October 17, 1996, the 

Department issued a new order (see 61 

FR 54322) (1996 Order) releasing some 

new data and reconfiguring files to 

protect proprietary information. In the 

1996 Order, the Department’s changes 

included the following: For the singlefamily files: (1) Add an indicator for 

served or underserved areas to the 

Census Tract File; (2) in certain cases 

recode area median family income and 

borrower(s) annual income to protect 

proprietary information in the Census 

Tract File; (3) specify properties 

included in National File A and the 

presentation of unit-level information in 

National File B; (4) recode the borrower 

income ratio for rental units in National 

File B to provide the public with 

affordability information; (5) provide 

information on whether mortgages were 

originated in the same or a previous 

year, consistent with HMDA, in 

National File B; and (6) revise the 

reporting of the occupancy code in 

National File B. For the multifamily 

files, release the type of seller 

institution in the Census Tract File, and 

release data on the affordability of units 

in the National File. 

Subsequently, as part of its GSE 

housing goals proposed rule of March 9, 

2000 (65 FR 12660) (the 2000 Proposed 

Rule), the Department included several 

additional changes to its classifications 

of certain GSE mortgage data. As part of 

59478 Federal Register / Vol. 69, No. 191 / Monday, October 4, 2004 / Notices 

this rulemaking, HUD proposed to treat 

as non-proprietary, and to release to the 

public, the following single-family data 

elements: 

(1) A code distinguishing loans on 

properties in metropolitan areas from 

loans on properties in non-metropolitan 

areas in the two single-family National 

Files; 

(2) A code distinguishing home 

purchase, refinance, second, and 

rehabilitation loans in the single-family 

Census Tract File and National File A; 

(3) An identifier for federally 

guaranteed loans (with type of 

guarantee) in the single-family Census 

Tract File; 

(4) Identification of the borrower’s 

and co-borrower’s race/national origin 

in the two single-family National Files; 

and 

(5) A code distinguishing owneroccupied from investor properties in the 

single-family Census Tract File and 

National File A. 

In addition, HUD proposed two 

changes to the GSE multifamily files 

that would allow the release to the 

public of: 

(1) A code in the National File that 

would distinguish loans originated in 

the year of purchase by the GSE from 

loans originated in prior years; and 

(2) A code in the National File 

identifying the type of seller institution. 

HUD also proposed four technical 

recoding and definitional changes 

concerning: (1) the borrower(s) annual 

income in the single-family database; (2) 

the Purpose of Loan in the Census Tract 

File; (3) the Purpose of Loan in the 

multifamily database; and (4) the 

Occupancy Code in the single-family 

database. (See Section 1.C. of the 2000 

Proposed Rule, 65 FR 12668–12670.) 

In the final GSE rule that HUD 

published on October 31, 2000 (65 FR 

65044) (the 2000 Final Rule), HUD 

decided not to make a final 

determination with regard to which GSE 

data elements would be designated as 

proprietary or non-proprietary. Instead, 

the Department decided, after 

referencing its authority under section 

1326 of FHEFSSA and § 81.75 of its 

regulations, that it would issue an order 

setting forth its determinations 

regarding the proprietary or nonproprietary status of the subject data 

elements following publication of the 

2000 Final Rule. The Department stated 

that its decision would be issued in 

accordance with its regulations at 

§§ 81.72 to 81.74. (See 65 FR 65801–

65802.) 

In 2003, the Department prepared and 

submitted to the Office of Management 

and Budget (OMB) a draft final order in 

which it stated determinations with 

respect to each of the changes that it had 

proposed in the 2000 Proposed Rule 

(the Draft Final Order). The Department 

also included in the Draft Final Order 

items that were not discussed in the 

2000 proposed rulemaking, including: 

(1) The designation as non-proprietary 

in National Files A and B of the 

borrower’s and co-borrower’s gender 

(information which previously was 

made available in the National files only 

as a combined borrower/co-borrower 

data element); and 

(2) Increasing the top-coding of the 

unpaid principal balance (UPB) of 

mortgage loans at the time of acquisition 

by a GSE to reflect increases in the 

conforming loan limit. 

In May 2003, the GSEs requested a 

copy of the Department’s submission to 

OMB and, in response, the Department 

provided Fannie Mae and Freddie Mac 

with a copy of the list of proprietary and 

non-proprietary determinations from its 

Draft Final Order (the 2003 List). The 

2003 List reflected the Department’s 

initial views about the proprietary and 

non-proprietary status of each of the 

data elements that had been included in 

the 2000 Proposed Rule, as well as items 

(1) and (2) above. 

In May 2003 HUD representatives met 

separately with Fannie Mae and Freddie 

Mac staff to discuss the proposed 

treatment of the data elements in the 

2003 List. The Department informed the 

GSEs that they could each submit 

written comments reflecting the views 

that they had expressed at the May 2003 

meetings. On June 24, 2003, the GSEs 

submitted written comments. The 

Department has reviewed and 

considered these comments. 

As described further below, the 

Department has concluded that the GSE 

data elements that were identified in the 

2000 Proposed Rule and 2003 

administrative proceedings, when 

released in certain files and with certain 

modifications as described below, may 

be treated as non-proprietary and may 

be released to the public via the public 

use database. 

C. Public Comments on the 2000 

Proposed Rule and the 2003 List 

In making its determinations, the 

Department considered the public 

comments submitted on the 2000 

Proposed Rule and the GSEs’ comments 

(described below) on the 2003 List. HUD 

received comments on the 2000 

Proposed Rule from both GSEs and from 

trade organizations, advocacy groups, 

researchers, and lenders. The 

Department discussed the comments in 

the 2000 Final Rule (see 65 FR 65044, 

65081–65082) and incorporates that 

discussion herein. The Department is 

further discussing, in this final order, 

Freddie Mac’s comments on the 2003 

List. 

Freddie Mac asserted that a portion of 

its June 24, 2003, comment letter is 

confidential and proprietary. In this 

final order, the Department discusses 

only those Freddie Mac comments that 

were not designated as proprietary. 

Fannie Mae asserted that the entire 

contents of its June 24, 2003, comment 

letter are confidential and proprietary.

Although the Department fully 

considered all the comments raised by 

the GSEs in their June 24, 2003 letters, 

due to the confidentiality concerns 

raised by the GSEs regarding those 

letters, only those portions of Freddie 

Mac’s comments that it has not 

designated as confidential and 

proprietary are discussed herein. 

Because Fannie Mae requested 

confidential treatment of all issues 

raised in its comments, the Department 

has considered, but is not discussing, 

these comments in this final order. 

Prior to publication of this final order, 

the Department sent to the GSEs a copy 

of this final order, together with 

separate determination letters in which 

the Department responded to the 

comments that each GSE contended are 

confidential and proprietary. 

In its comments on the 2003 List, 

Freddie Mac asserted that the 

Department’s administrative process for 

changing the treatment of the items of 

proprietary data in the 2003 List was 

inadequate. Freddie Mac agreed that the 

Department could modify its 

designations of proprietary and nonproprietary data in the public use 

database by regulation or order, but 

stated that neither the process for a 

regulation nor for an order had been 

followed. Freddie Mac did not elaborate 

further on the process it considered 

proper for issuing an order. 

The Department has considered 

Freddie Mac’s comments relating to the 

administrative process it used in making 

the determinations set forth in this final 

order and has determined that it 

followed the appropriate administrative 

process under section 1326 of 

FHEFSSA, HUD’s regulations at 24 CFR 

81.74 and 81.75, and the Administrative 

Procedure Act. The Department has 

provided various opportunities to the 

GSEs to have their views considered 

during both the 2000 and 2003 

administrative proceedings, and the 

GSEs did, in fact, avail themselves of 

each of these opportunities by 

submitting written comments and 

meeting with HUD representatives. 

Moreover, the Department has fully 

considered the GSEs’ oral and written 

comments. Accordingly, the Department 

Federal Register / Vol. 69, No. 191 / Monday, October 4, 2004 / Notices 59479

believes that the administrative process 

it has afforded the GSEs fully satisfies 

the requirements and procedural 

protections afforded in its regulations 

and in the Administrative Procedure 

Act. 

HUD’s determinations, including a 

specific discussion of each change to the 

1996 Order, are set forth below in 

Section D. 

D. Changes Included in This Order 

The Department is issuing this final 

order setting forth its determinations of 

proprietary and non-proprietary status 

with respect to the data element changes 

HUD proposed in its 2000 Proposed 

Rule, and the two additional items 

proposed by the Department in the 2003 

List. The following section sets forth 

HUD’s determinations and how those 

determinations change the 1996 Order. 

In making its determinations, HUD 

has considered all of the the public and 

non-public comments regarding its 

proposed changes to the public use 

database, and acted pursuant to its 

regulations at 24 CFR 81.71–81.75. 

Further, in making its determination, 

the Department specifically employed 

the six factors listed for making 

proprietary determinations of mortgage 

data or AHAR information set forth in 

24 CFR 81.74(b), including a 

consideration of any effect that 

disclosure of GSE data may have on the 

GSEs’ financial or competitive 

positions. In this final order, the 

Department is making the following 

changes to the treatment of the 

following single-family loan level data 

elements: 

1. Treatment of Single-Family Data 

1. MSA Code/Metropolitan and NonMetropolitan Location 

In the 2000 Proposed Rule, HUD 

proposed to add an identifier to 

National Files A and B that would 

identify only whether a mortgaged 

property is located in a metropolitan 

area or is located in a non-metropolitan 

area, or that the information is missing, 

without revealing the specific 

Metropolitan Statistical Areas (MSAs) of 

the property by disclosing the MSA 

code. MSA Codes for specific MSAs will 

continue to be available only in the 

Census Tract File. 

HUD has determined that its proposal 

should be implemented and that data 

identifying whether a property is in a 

metropolitan or non-metropolitan area 

should not be accorded proprietary 

treatment in the National Files. The 

incremental amount of information 

made available to the public through the 

release of metropolitan/nonmetropolitan data is necessary in order 

to accurately characterize GSE 

purchases, to fully understand the 

ability of the GSEs to lead the mortgage 

market, and to help to fill the 

‘‘information vacuum’’ related to the 

GSEs’’ mortgage purchase activities as 

noted by Congress when it enacted 

FHEFSSA in 1992. 

In addition, separately identifying 

data on metropolitan and nonmetropolitan activities of the GSEs is of 

critical importance in order to 

accurately compare the GSEs to the 

primary mortgage market. By allowing 

analysis of the GSEs’ purchases of 

mortgages on properties in metropolitan 

areas, as opposed to non-metropolitan 

areas, HUD’s release of this data would 

allow comparisons with market data, 

reported in accordance with HMDA, 

which contain information on newly 

originated mortgages in metropolitan 

areas at the census tract level. National 

File B also separates the GSEs’ mortgage 

purchases into prior-year and currentyear originations. The market analysis, 

comparing GSE purchases with HMDAreported originations in the primary 

market, will allow HUD and others to 

accurately evaluate GSE leadership 

capabilities relative to the conventional 

conforming mortgage market, one of the 

statutory factors that Congress mandated 

that HUD consider in setting the 

housing goals. 

2. Purpose of Loan 

In the 2000 Proposed Rule, HUD 

proposed to add Purpose of Loan to the 

Census Tract File and National File A 

by releasing data on whether a mortgage 

was for home purchase, refinance, or 

was a second mortgage. HUD further 

proposed to add a previously unreleased 

indicator for rehabilitation loans to the 

coded values of Purpose of Loan, and to 

redefine code ‘‘9’’ as ‘‘information not 

applicable/not available.’’

HUD has determined not to accord 

proprietary treatment to Purpose of 

Loan data if Purpose of Loan data are 

released in the Census Tract File and 

National File A in two categories, either 

‘‘home purchase’’ or ‘‘all other’’, the 

latter of which would include refinance, 

second, and rehabilitation mortgages 

combined into one element. For 

National File B, the public use database 

would retain the existing level of detail, 

although an additional element would 

be provided to indicate whether a loan 

is a code 4, which indicates 

rehabilitation loans. The public use 

database will redefine code 9 from ‘‘Not 

Applicable’’ to ‘‘Not Applicable/Not 

Available.’’

By making these changes, the Census 

Tract File and National File A of the 

public use database will clearly identify 

home purchase mortgages, which are 

central to the GSEs’ missions and 

important to the formulation of 

regulatory policy toward the GSEs while 

addressing any concerns relating to the 

public release of this information. 

Meanwhile, National File B of the 

public use database will continue to 

report greater detail on loan purpose, 

including information on second 

mortgages and rehabilitation loans. 

The need to distinguish home 

purchase loans in the Census Tract File 

has been conveyed to HUD by 

researchers who have attempted to use 

the GSE public use database in 

conjunction with HMDA data (which 

separately identifies home purchase and 

refinance loans). These researchers 

indicate that the usefulness of the 

Census Tract File is severely limited 

because it does not separately identify 

home purchase loans.

The level of down payment is a major 

factor in determining access to 

homeownership for lower-income 

families. With respect to National File 

A, separately identifying the 

distribution of home purchase loans 

across LTVs would allow users of the 

public use database to perform analyses 

of the GSEs’ contributions to 

homeownership opportunities for those 

lower-income families that find it most 

difficult to raise cash. Such 

identification would permit the public 

to consider whether the GSEs are 

purchasing sufficient low down 

payment loans to serve the needs of 

lower-income borrowers. Currently, 

questions such as these cannot be 

answered using the GSE public use 

database. Including Purpose of Loan in 

National File A will enable HUD and 

others to analyze the GSEs’

contributions to expanding 

homeownership opportunities. 

3. Federal Guarantee 

Federal Guarantee is already 

disclosed in National Files A and B. 

HUD proposed to add it to the Census 

Tract File. This data element identifies 

whether the loan is a Federal Housing 

Administration (FHA) loan or Veterans 

Administration (VA) loan, a Rural 

Housing Service (RHS) guaranteed rural 

housing loan, a home equity conversion 

mortgage (HECM), a Title I–FHA loan, 

or a loan without any federal guarantee. 

Federal Guarantee (FHA, VA, RHS) is 

disclosed in the HMDA database. 

HUD has determined that proprietary 

restrictions will not be violated if the 

Census Tract File reports the Federal 

Guarantee in one of three categories—

‘‘FHA/VA,’’ ‘‘other federal guarantee,’’

or ‘‘no federal guarantee.’’ HUD has 

59480 Federal Register / Vol. 69, No. 191 / Monday, October 4, 2004 / Notices 

determined that its proposal should be 

implemented and data identifying 

‘‘federal guarantee,’’ as described 

herein, should not be accorded 

proprietary treatment in the Census 

Tract File. 

HUD previously determined in the 

1996 Order that the Federal Guarantee 

data element specifying whether a loan 

is an FHA or a VA loan, an RHSguaranteed rural housing loan, a HECM, 

a Title I FHA loan, or a loan without any 

federal guarantee, is not proprietary 

when released in the National Files A 

and B, as specified in that Order. On the 

other hand, HUD also determined, with 

regard to the Census Tract File, that this 

element is proprietary. However, since 

HMDA does make available to the 

public information on whether current 

year loans are conventional, FHA, VA, 

or RHS, the Department believes that a 

revocation of its prior proprietary 

determination with regard to the Census 

Tract File is warranted. 

The public benefit of being able to 

distinguish FHA/VA, Other Federal 

Guarantee and No Federal Guarantee 

loans by geographical location is 

substantial. As noted earlier, HMDA 

reports such information for most loans 

originated in the primary market in 

metropolitan areas and for most loans 

sold to the GSEs. This addition to the 

Census Tract File will make the data in 

that file consistent with the primary 

market data reported by HMDA. By 

including the Federal Guarantee 

information in the Census Tract File, 

HUD will enable users of the GSE public 

use database to analyze the GSEs’

mortgage purchases with more 

precision. 

4. Race/National Origin 

Section 1323(b)(2) of FHEFSSA, 

codified at 12 U.S.C. 4543(b)(2), 

provides that the Secretary shall not 

restrict access to certain data elements 

listed in the GSEs’ respective Charter 

Acts; these data elements include the 

race of mortgagors. The race/national 

origin of the borrower and co-borrower 

are already made public in the Census 

Tract File. This data element also 

includes designations for why 

information is not available. The race/

national origin of the borrower and coborrower are also made public in 

National Files A and B as a combined 

data element which presents data on the 

race/national origin of the borrower and 

co-borrower, including whether they are 

of a different race/national origin from 

each other. There is no designation for 

why information is missing in National 

Files A and B. 

In the 2000 Proposed Rule, HUD 

proposed to change the presentation in 

National Files A and B to provide a 

separate race/national origin data 

element for the borrower and coborrower, and to detail reasons for 

missing race data currently provided 

only in the Census Tract File 

(specifically whether information was 

not provided by the applicant in a mail 

or telephone application, the field is not 

applicable, or the information is not 

available). HUD has determined that its 

proposal should be implemented and 

that data identifying ‘‘race/national 

origin,’’ as described herein, should not 

be accorded proprietary treatment in 

National Files A and B. 

HUD previously determined in the 

1995 Final Rule, and reaffirmed in the 

1996 Order, that the race/national origin 

data element is non-proprietary when 

released for the borrower and coborrower in the Census Tract File, and 

that combined race/national origin data 

for both the borrower and co-borrower 

are non-proprietary in the form in 

which these have been released in the 

National Files A and B. Thus, the 

Department has not previously made 

available to the public, via the public 

use database, separate data on race/

national origin for the borrower and the 

co-borrower in National Files A and B. 

However, since HMDA does make 

available to the public separate data on 

the race/national origin of the borrower 

and the co-borrower, as does the Census 

Tract File, the Department believes that 

a revocation of its prior proprietary 

determination is warranted. 

5. Gender of the Borrower and CoBorrower 

Section 1323(b)(2) of FHEFSSA, 

codified at 12 U.S.C. 4543(b)(2), 

provides that the Secretary shall not 

restrict access to certain data elements 

listed in the GSEs’ respective Charter 

Acts. These data elements include the 

gender of single-family mortgagors. The 

gender of the borrower and co-borrower 

are already present in the Census Tract 

File, and as a combined data element in 

National Files A and B. There is no 

designation for why information is 

missing in National Files A and B. 

HUD is now changing the 

presentation in National Files A and B 

to provide borrower and co-borrower 

information separately. In addition, 

HUD will include in National Files A 

and B additional information on the 

reasons why data are missing, i.e., 

information was not provided by the 

applicant in mail or telephone 

application, the field is not applicable, 

or the information is not available. This 

information currently is provided only 

in the Census Tract File. HUD has 

determined that this change should be 

implemented and that data identifying 

the gender of the borrower and coborrower, as described herein, should 

not be accorded proprietary treatment in 

the National Files A and B. 

The disclosure, on a disaggregated 

basis in the National Files, of separate 

gender information for borrowers and 

co-borrowers, would not affect the 

financial or competitive position of 

either GSE. As noted above, the two 

National Files already report gender 

information on an aggregated basis 

(combining the primary borrower and 

co-borrower information). The 

Department would be providing 

separate gender information for the 

borrower and the co-borrower in the 

form in which gender information is 

already provided in the Census Tract 

File. 

HUD previously determined in the 

1996 Order that gender qualifies for 

proprietary treatment when released in 

the form of separate borrower and coborrower gender data elements in the 

two National Files. As a result, the 

Department has not previously made 

this information available to the public 

via the public use database. Information 

on the gender of the borrower and coborrower for GSE-purchased loans is 

readily available from the Census Tract 

File (for all single-family loans) and 

from HMDA (for most home purchase 

and refinance loans sold to the GSEs). 

The Department’s release of separate 

information on borrower and coborrower race/national origin (as 

discussed in the preceding section) will 

have the effect of revealing, in National 

Files A and B, information on whether 

the number of borrowers is one or at 

least two. Given this information with 

the existing combined borrower/coborrower gender data element, the level 

of gender information in National Files 

A and B will become substantively 

equivalent to the level of gender 

information provided if the borrower 

and co-borrower information are 

provided separately. (In some cases 

there are three or more borrowers; 

information on the total number of 

borrowers for a loan will continue to be 

excluded from the GSE public use 

database.) To make this as clear as 

possible for users of the public use 

database, HUD will code borrower and 

co-borrower information separately as is 

done with HMDA data. 

For these reasons, HUD has 

determined that it is appropriate to 

release this augmented disclosure of 

information on gender in the National 

Files. 

Federal Register / Vol. 69, No. 191 / Monday, October 4, 2004 / Notices 59481

6. Top-Coding of Unpaid Principal 

Balance (UPB) 

The Department uses ‘‘top-coding’’ in 

the public use database to present the 

maximum unpaid principal balance of a 

mortgage at the time of acquisition by a 

GSE as a number less than the 

conforming loan limit. In this way, users 

of the public use database can gain 

information on the unpaid principal 

balance of GSE mortgage purchases 

without being able to discern whether a 

unit is a one-unit or a two-to-four unit 

property. The top-code for a singlefamily mortgage is calculated by 

applying a fixed ratio to the conforming 

loan limit.

The first year for which HUD 

collected proprietary data on UPB was 

1993, when the conforming loan limit 

for one-unit properties (except in Alaska 

and Hawaii) was $203,150. For that 

year, HUD top-coded UPB at $200,000, 

or 98.45 percent of the conforming loan 

limit. 

Under the 1994 Temporary Order, 

UPB was designated as proprietary and 

not released. Under Appendix F of the 

1995 Rule, data on UPB were allowed to 

be released as either less than or greater 

than $200,000 in the single-family 

Census Tract File, but not in National 

File A or B. The 1996 Order did not 

change the treatment of this data 

element. 

After the 1996 Order was published, 

HUD released UPB data, top-coded at 

$200,000 for the years 1993 through 

1995. For subsequent years, HUD has 

continued to apply a $200,000 top-code, 

even as the conforming loan limit has 

risen. For 2004, with a conforming loan 

limit of $333,700, a $200,000 top-code 

means that information on the 

distribution of UPB that HUD has 

asserted to be relevant for public 

purposes and non-proprietary is being 

masked. 

Accordingly, HUD will henceforth 

adjust annually the top-code UPB for all 

single-family properties by applying the 

fixed ratio (200/207) to the then-current 

single-family conforming loan limit. 

Therefore, consistent with the topcoding convention already employed for 

1993 through 1995, HUD is ordering the 

top-coding convention for each year to 

be 98.4 percent of the conforming loan 

limit, rounded to the nearest $500. This 

will result in a top-code for the year 

2004, in which the conforming loan 

limit is $333,700, of $328,500. 

HUD has determined that there is no 

adverse consequence from annually respecifying the top-code of UPB, as it 

only restores the level of disclosure 

established in the Final Order that is set 

forth in Appendix F to the 1995 Final 

Rule and in the 1996 Order. HUD 

previously determined in those Orders 

that the Acquisition UPB data element 

qualifies for proprietary treatment, but 

may be released to the public after 

applying top-coding to this data. In 

those Orders, the Department indicated 

that the purpose of top-coding was to 

mask two-to four-unit properties by 

combining them with one-unit 

properties within approximately 1.5 

percentage points below the conforming 

loan limit. Over time, the top-code set 

in 1996 has decreased to 59.93 percent 

of the conforming loan limit in 2004, as 

the conforming loan limit has risen. 

Because the Department has already 

determined that the Acquisition UPB 

data element can be released to the 

public when a top-code is applied, and 

since the effect of the current 

modification is limited to adjusting the 

top-code to reflect annual changes in the 

conforming loan limit, the Department 

believes this clarification of HUD’s prior 

proprietary determination is warranted. 

7. Occupancy Code 

Occupancy Code (identifying whether 

the unit is owner-occupied, a rental unit 

in an owner-occupied property, a unit 

in an investment property, or 

information not available) is already 

provided in National File B of the 

public use database. In the 2000 

Proposed Rule, HUD proposed to add 

this data element to the Census Tract 

File and to National File A (identifying 

whether the property is owneroccupied, is an investment property, or 

that the information is not available). 

The Census Tract File currently does 

not distinguish mortgages on owneroccupied properties from mortgages on 

investor-owned properties. Separately 

identifying mortgages on owneroccupied and investor-owned properties 

in the Census Tract File of the public 

use database would make the Census 

Tract File comparable with HMDA, 

which distinguishes between mortgages 

on owner-occupied and non-owneroccupied properties. This change would 

permit comparison of the GSEs’

purchases of mortgages on owneroccupied properties with HMDAreported mortgages on owner-occupied 

properties originated in the 

conventional conforming primary 

market. (In the public use database 

second homes are included in the 

‘‘owner-occupied’’ category while in 

HMDA they are included in the ‘‘nonowner-occupied’’ category.) 

HUD has determined that its proposal 

should be implemented and that 

occupancy code information in the 

Census Tract File should not be 

accorded proprietary treatment. HUD 

previously determined in the 1996 

Order that the Occupancy Code data 

element is not proprietary in National 

File B when recoded to mask whether 

the property is the second home, but 

that the data element is accorded 

proprietary treatment in the Census 

Tract File and National File A. 

However, since HMDA does make 

available to the public the occupancy 

code data element, and for the other 

reasons set forth in this final order, the 

Department believes that a revocation of 

its prior proprietary determination with 

respect to the Census Tract File is 

warranted. (HUD has further determined 

that because National File A contains 

only mortgage data on owner-occupied 

one-unit properties, release of 

information on investor-owned 

properties is not applicable to this File.) 

Under HMDA, lenders report 

information for most loans originated in 

the primary market in metropolitan 

areas and for most loans sold to the 

GSEs. This addition to the single-family 

Census Tract File would make the data 

in that file consistent with the primary 

market data reported by HMDA, thus 

allowing for comparisons of the 

characteristics of loans on owneroccupied properties that are originated 

in the primary market and loans that are 

bought by the GSEs. This would provide 

a better understanding of the role of the 

GSEs in purchasing mortgages in the 

owner-occupied portions of the 

metropolitan housing markets. In 

addition, single-family rental properties 

provide an important source of 

financing for low-income housing, 

particularly in inner cities, but more 

needs to be known about the GSEs’

activities in this important market. For 

these reasons, the public benefit of 

being able to distinguish, by 

geographical location, between 

mortgages on owner-occupied and 

investor-owned properties is 

substantial. 

2. Treatment of Multifamily Data 

Under the 2000 Proposed Rule, HUD 

proposed to add the following data 

elements to the GSE public use database 

for multifamily properties: 

1. Date of Mortgage Note 

Date of Mortgage Note was proposed 

by HUD in the 2000 Proposed Rule to 

be released in the multifamily National 

File only, showing whether the 

mortgage was originated in the same 

year as acquired by the GSE, or in a 

prior year, or whether this information 

is missing. 

HUD has determined that its proposal 

should be implemented and that data on 

the Date of Mortgage Note in the 

59482 Federal Register / Vol. 69, No. 191 / Monday, October 4, 2004 / Notices 

multifamily National File should not be 

accorded proprietary treatment. 

HUD previously determined in the 

1996 Final Order that the Date of 

Mortgage Note data element qualifies for 

proprietary treatment in both the Census 

Tract File and the National File. As a 

result, the Department has not 

previously made this information 

available to the public via the public use 

database. However, since HMDA does 

make available to the public the Date of 

Mortgage Note data element, the 

Department believes that a revocation of 

its prior proprietary determination is 

warranted. This will permit public 

analyses of GSE purchases of 

multifamily loans originated in prior 

years and also facilitate comparisons 

between data in the GSE public use 

database and HMDA data. 

2. Type of Seller Institution 

Type of Seller Institution (showing 

whether the loan seller is a mortgage 

company, Savings Association 

Insurance Fund (SAIF)-insured 

depository institution, Bank Insurance 

Fund (BIF)-insured depository 

institution, National Credit Union 

Administration (NCUA)-insured credit 

union, or some other type of institution) 

is already provided to users in the 

Census Tract File of the public use 

database. In the 2000 Proposed Rule, 

HUD proposed to release this 

information in the National File as well. 

HUD has determined that data on the 

Type of Seller Institution in the 

National File should not be accorded 

proprietary treatment and that its 

proposal should be implemented with 

one change: SAIF-insured depository 

institution and BIF-insured depository 

institution will be recoded as a 

combined data element in the National 

File. 

HUD previously determined in the 

1996 Order that the Type of Seller 

Institution data element is not 

proprietary when released in the Census 

Tract File and is proprietary when 

released in the National File. As a 

result, the Department has not 

previously made this information 

available to the public via the public use 

database. However, since HMDA does 

make available to the public the Type of 

Seller Institution data element, the 

Department believes that a revocation of 

its prior proprietary determination is 

warranted. This will facilitate 

comparisons between data contained in 

the GSE and HMDA databases and will 

also facilitate analyses by members of 

the public of affordability, property and 

size characteristics, as well as other key 

characteristics by type of seller at the 

national level. 

E. Other Technical Changes 

In the 2000 Proposed Rule, HUD 

proposed the following additional 

changes, of a minor technical or 

definitional nature, to the public use 

database: 

1. Borrower(s) Annual Income 

HUD proposed to change the ‘‘not 

available’’ code for borrower(s) annual 

income from ‘‘999999’’ to ‘‘9999999.’’

No objection was raised to this change. 

Accordingly, it will be implemented.

2. Purpose of Loan—Single-Family 

HUD proposed to add code ‘‘4’’ for 

rehabilitation loans as a code under 

Purpose of Loan in the single-family 

GSE public use database, and to change 

code ‘‘9’’ from ‘‘not applicable’’ to ‘‘not 

applicable/not available.’’ No objection 

was raised to this change. Accordingly, 

it will be implemented. 

3. Purpose of Loan—Multifamily 

HUD proposed to change code ‘‘9’’

under Purpose of Loan in the 

multifamily GSE public use database 

from ‘‘not applicable’’ to ‘‘not 

applicable/not available.’’ No objection 

was raised to this change. Accordingly, 

it will be implemented. 

4. Occupancy Code in National File A 

In the preamble to the 2000 Proposed 

Rule, HUD proposed that Occupancy 

Code be disclosed in National File A. In 

seeming contradiction to this proposal, 

HUD’s matrix in Appendix E to the 2000 

Proposed Rule indicated that this data 

element would continue not to be 

disclosed. The issue is, however, 

substantively immaterial given that 

National File A is limited to mortgages 

on owner-occupied one-unit properties, 

all of which would have an Occupancy 

Code of ‘‘1’’ under the proposal. In order 

to economize on space in the data file, 

and since the code is unnecessary, HUD 

will continue to omit this data element 

from National File A. 

F. Summary of Revised Public Use 

Database Structure 

An appendix is attached to this Final 

Order that summarizes the structure of 

the single-family and multifamily GSE 

public use database files incorporating 

the changes that will be implemented 

based on HUD’s determinations in this 

Final Order. For GSE single-family 

mortgage data, changes are reflected in 

data fields 4, 15, 18, 22, 27, 41, 42, 43, 

44, and 47. For GSE multifamily 

mortgage data, changes are reflected in 

data fields 19, 21, and 33. 

Conclusion 

The Department is complying fully 

with the requirements of FHEFSSA and 

will not restrict access to the data 

submitted by the GSEs to HUD under 

sections 309(m) and (n) of the Fannie 

Mae Charter Act and sections 307(e) and 

(f) of the Freddie Mac Act, other than as 

described in this final order and the 

attached Appendix. Also, the 

Department has considered the 

assertions of the GSEs and other 

commenters that certain data should be 

treated as proprietary and has 

concluded that revising the 1996 Order 

is necessary to release GSE information 

that is reported to HUD to the public, to 

complement the HMDA database, and to 

fill the ‘‘information vacuum’’ on GSE 

mortgage purchase activities, while at 

the same time protecting the GSEs’

proprietary information, in accordance 

with FHEFSSA and its legislative 

history. 

Pursuant to sections 1323 and 1326 of 

FHEFSSA, codified at 12 U.S.C. 4543 

and 4546, and HUD’s regulations at 24 

CFR part 81, the Department has 

determined that certain loan-level 

mortgage data elements, as detailed in 

the attached Appendix and contained in 

the annual loan-level data files 

submitted by Fannie Mae and Freddie 

Mac to the Department in accordance 

with sections 309(m) and (n) of the 

Fannie Mae Charter Act (12 U.S.C. 

1723a(m) and 1723a(n)) and sections 

307(e) and (f) of the Freddie Mac Act (12 

U.S.C. 1456(e) and 1456(f)), shall not be 

accorded proprietary treatment and 

shall be made available for public use 

via the public use database established 

by section 1323 of FHEFSSA. The 

Appendix further identifies those data 

elements for which HUD has made these 

determinations.

Finally, this final order provides that 

the Department also will revise the topcoding convention on the unpaid 

principal balance (UPB) of mortgages in 

the single-family Census Tract File 

beginning with the year 2004 and 

consistent with the top-coding 

convention already employed for the 

years 1993 through 1995. 

The Department will release the 

reclassified data elements, as set forth in 

this Final Order, beginning in 2005, 

through the Department’s public use 

database covering the GSEs’ 2004 

mortgage purchases, and in all future 

public use databases. 

The Department also has determined 

to make the technical changes to its 

implementation of the public use 

database, as originally described in the 

2000 Proposed Rule and as described in 

Federal Register / Vol. 69, No. 191 / Monday, October 4, 2004 / Notices 59483

this final order. These technical changes 

will take effect immediately. 

Expiration and Modification of this 

Final Order 

This final order supersedes the final 

order of October 17, 1996 (61 FR 54322) 

and shall be effective until such time as 

the Department determines that it is 

necessary and/or appropriate to 

withdraw or modify it.

Dated: September 28, 2004. 

John C. Weicher, 

Assistant Secretary for Housing-Federal 

Housing Commissioner.

BILLING CODE 4210–27–P

59484 Federal Register / Vol. 69, No. 191 / Monday, October 4, 2004 / Notices 


EN04oc04.035</GPH>
Federal Register / Vol. 69, No. 191 / Monday, October 4, 2004 / Notices 59485


EN04oc04.036</GPH>
59486 Federal Register / Vol. 69, No. 191 / Monday, October 4, 2004 / Notices 


EN04oc04.037</GPH>
Federal Register / Vol. 69, No. 191 / Monday, October 4, 2004 / Notices 59487


EN04oc04.038</GPH>
59488 Federal Register / Vol. 69, No. 191 / Monday, October 4, 2004 / Notices 

[FR Doc. 04–22049 Filed 10–01–04; 8:45 am] 

BILLING CODE 4210–27–C


EN04oc04.039</GPH>