63576 Federal Register / Vol. 69, No. 211 / Tuesday, November 2, 2004 / Proposed Rules 

DEPARTMENT OF HOUSING AND 

URBAN DEVELOPMENT 

24 CFR Part 81 

[Docket No. FR–4960–A–01] 

RIN 2501–AD12 

HUD’s Regulation of the Federal 

National Mortgage Association (Fannie 

Mae) and the Federal Home Loan 

Mortgage Corporation (Freddie Mac): 

GSE Housing Goals—Advance Notice 

of Proposed Rulemaking

AGENCY: Office of the Assistant 

Secretary for Housing—Federal Housing 

Commissioner.

ACTION: Advance Notice of Proposed 

Rulemaking (ANPR). 

SUMMARY: Elsewhere in today’s Federal 

Register, HUD is publishing its final 

rule that establishes new housing goals 

for Fannie Mae and Freddie Mac for the 

years 2005 through 2008. An issue 

raised by commenters during the public 

comment period on the proposed rule, 

but not included as a regulatory 

provision in the final rule published in 

today’s Federal Register, concerns the 

feasibility of the housing goals for 

Fannie Mae and Freddie Mac during a 

period when refinances of home 

mortgages constitute a large share of the 

mortgage market. This ANPR advises of 

HUD’s intention to consider a regulatory 

provision that recognizes and takes into 

consideration the impact of high 

volumes of refinance transactions on the 

GSEs’ ability to achieve the housing 

goals in certain years, and solicits 

proposals on how such a provision 

should be structured and implemented.

DATES: Comment Due Date: December 

17, 2004.

ADDRESSES: Interested persons are 

invited to submit comments regarding 

this advance notice of proposed 

rulemaking to the Rules Docket Clerk, 

Office of General Counsel, Room 10276, 

Department of Housing and Urban 

Development, 451 Seventh Street, SW., 

Washington, DC 20410–0500. 

Communications should refer to the 

above docket number and title. 

Facsimile comments are not accepted. A 

copy of each communication submitted 

will be available for public inspection 

and copying between 8 a.m. and 5 p.m. 

weekdays at the above referenced 

address.

FOR FURTHER INFORMATION CONTACT:

Sandra Fostek, Director, Office of 

Government Sponsored Enterprises, 

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, 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 via TTY by 

calling the Federal Information Relay 

Service at (800) 877–8399.

SUPPLEMENTARY INFORMATION: 

Background 

Elsewhere in today’s Federal Register, 

HUD is publishing a final rule that sets 

new housing goal levels for Fannie Mae 

and Freddie Mac (collectively the 

government-sponsored enterprises or 

GSEs) (Housing Goals final rule). The 

new housing goal levels are established 

in accordance with the Federal Housing 

Enterprises Financial Safety and 

Soundness Act of 1992 (FHEFSSA) and 

govern the purchase by Fannie Mae and 

Freddie Mac of mortgages financing 

low- and moderate-income housing, 

special affordable housing, and housing 

in central cities, rural areas, and other 

underserved areas. The new goal levels 

are applicable for the years 2005 

through 2008, and are accompanied by 

new subgoals for the GSEs’ acquisitions 

of home purchase loans that qualify for 

each of the housing goals. 

The Housing Goals final rule follows 

publication of a May 3, 2004, proposed 

rule (69 FR 24228) and takes into 

consideration the public comments 

received on the proposed rule. The 

preamble to the Housing Goals final rule 

provides a more detailed discussion of 

the May 3, 2004, proposed rule, the 

changes made at the final rule stage, the 

significant issues raised by public 

commenters on the proposed rule, and 

the Department’s responses to those 

issues. One issue raised by several 

public comments, and not addressed in 

the Housing Goals final rule as a 

regulatory change, concerns the 

feasibility of the GSEs achieving the 

housing goals during a period when 

there is a high volume of home mortgage 

refinances. 

Some public commenters expressed 

concerns that the housing goals would 

be unattainable in a high refinance 

environment, when a large portion of 

the mortgage market consists of 

refinance loans rather than home 

purchase mortgages. These commenters 

suggested that HUD should take into 

consideration the potential effects of a 

high refinance environment on the 

GSEs’ ability to meet the housing goals. 

Some commenters suggested that 

refinance mortgages should be excluded 

from the goals calculation, while others 

suggested that the GSEs should be 

expected to meet the goals without 

special consideration of a high refinance 

environment. Several commenters 

suggested that the Housing Goals final 

rule should include a specific 

mechanism to take into account changes 

in market conditions resulting from a 

high refinance volume. The comments 

on the possible impacts of a high 

refinance environment are highlighted 

in more detail in the preamble to the 

Housing Goals final rule. 

This ANPR 

As stated in the preamble to the 

Housing Goals final rule and as stated 

in this ANPR, HUD has decided to 

consider, as a specific regulatory 

provision, the feasibility of the GSEs 

meeting the housing goals in a high 

refinance environment through a 

separate rulemaking, which 

consideration begins with publication of 

this ANPR. 

HUD did not propose, in the May 3, 

2004, proposed rule, a regulatory 

mechanism to address the impact of a 

high refinance environment on the 

ability of the GSEs to meet their annual 

housing goals in years in which there is 

a high refinance environment. HUD 

believes that it would benefit from 

additional public input on this issue. 

HUD recognizes, from prior years, that 

a period of high refinance volume can 

make it more challenging for the GSEs 

to attain the housing goals. Until this 

rulemaking is completed, the GSEs are 

not without relief in a high refinance 

environment under existing authority. 

FHEFSSA provides a mechanism by 

which HUD can take into consideration 

market and economic conditions that 

may make the achievement of housing 

goals infeasible in any given year. (See

12 U.S.C. 4566(b).) It is contemplated, 

however, that a more efficient 

mechanism could be devised for dealing 

with high refinance volumes under the 

housing goals. 

HUD is soliciting public comment on 

how it might add a regulatory provision 

that accommodates a high refinance 

environment under the housing goals. 

Refinancing of mortgages promotes 

homeownership by helping families to 

finance their homes on a more 

affordable basis, and also by providing 

an opportunity to families who have 

bought their homes through subprime 

financing to move into the prime market 

as they improve their credit rating. 

Federal Register / Vol. 69, No. 211 / Tuesday, November 2, 2004 / Proposed Rules 63577

Through this ANPR, HUD solicits 

proposals on an appropriate regulatory 

mechanism to address the impact of a 

high refinance environment on the 

ability of the GSEs to meet housing 

goals for any year that is characterized 

by a high refinance environment. HUD 

especially solicits proposals that are 

sufficiently descriptive and detailed 

concerning any methodology or 

calculation offered, and HUD also 

encourages the inclusion of examples 

that illustrate how the commenter’s 

proposal would work in practice.

Dated: October 22, 2004. 

John C. Weicher, 

Assistant Secretary for Housing—Federal 

Housing Commissioner.

[FR Doc. 04–24100 Filed 11–1–04; 8:45 am] 

BILLING CODE 4210–27–P