This section of the FEDERAL REGISTER

contains notices to the public of the proposed

issuance of rules and regulations. The

purpose of these notices is to give interested

persons an opportunity to participate in the

rule making prior to the adoption of the final

rules.

Proposed Rules Federal Register

17300 

Vol. 78, No. 55 

Thursday, March 21, 2013 

OFFICE OF MANAGEMENT AND 

BUDGET 

2 CFR Chapters I and II 

Reform of Federal Policies Relating to 

Grants and Cooperative Agreements; 

Cost Principles and Administrative 

Requirements (Including Single Audit 

Act) 

AGENCY: Executive Office of the 

President, Office of Management and 

Budget (OMB). 

ACTION: Extension of comment period; 

proposed guidance. 

SUMMARY: The Office of Management 

and Budget is extending the comment 

period for the Proposed Guidance on 

Reform of Federal Policies Relating to 

Grants and Cooperative Agreements; 

Cost Principles and Administrative 

Requirements (Including Single Audit 

Act) published February 1, 2013. The 

original comment period was scheduled 

to end on May 2, 2013. Today, OMB is 

extending the time period in which to 

provide public comments until June 2, 

2013. This will allow interested parties 

additional time to analyze the issues 

and prepare their comments. 

DATES: To be assured of consideration, 

comments must be received by OMB 

electronically through 

www.regulations.gov docket OMB– 

2013–0001 no later than 11:59 p.m. 

Eastern Standard Time (E.S.T.) on June 

2, 2013. 

ADDRESSES: Comments on this proposal 

must be submitted electronically at 

www.regulations.gov. In submitting 

comments, please search for docket 

OMB–2013–0001, which includes the 

full text of this proposal as well as 

supporting materials, and submit 

comments there. 

FOR FURTHER INFORMATION CONTACT: For 

general information, please contact 

Victoria Collin at (202) 395–7791. For 

more information on grants management 

and the Council on Financial Assistance 

Reform please visit www.cfo.gov/cofar. 

Daniel I. Werfel, 

Controller. 

[FR Doc. 2013–06455 Filed 3–20–13; 8:45 am] 

BILLING CODE P 

DEPARTMENT OF TRANSPORTATION 

Federal Aviation Administration 

14 CFR Part 39 

[Docket No. FAA–2007–28059; Directorate 

Identifier 2007–NE–13–AD] 

RIN 2120–AA64 

Airworthiness Directives; Rolls-Royce 

plc Turbofan Engines 

AGENCY: Federal Aviation 

Administration (FAA), DOT. 

ACTION: Notice of proposed rulemaking 

(NPRM). 

SUMMARY: We propose to supersede an 

existing airworthiness directive (AD) for 

all Rolls-Royce plc (RR) RB211-Trent 

553–61, 553A2–61, 556–61, 556A2–61, 

556B–61, 556B2–61, 560–61, 560A2–61, 

768–60, 772–60, 772B–60, 875–17, 877– 

17, 884–17, 884B–17, 892–17, 892B–17, 

and 895–17 turbofan engines. The 

existing AD currently requires 

inspection of the intermediate-pressure 

(IP) compressor rotor shaft rear balance 

land for cracks. Since we issued that 

AD, a crack was detected in a Trent 500 

IP compressor rotor shaft rear balance 

land during a shop visit, and further 

engineering evaluation done by RR 

concluded that the cracking may also 

exist in Trent 900 engines. This 

proposed AD would require inspections 

of the IP compressor rotor shaft as 

required by the existing AD while 

adding on-wing inspections for the 

Trent 500 engines, and on-wing and inshop inspections for the Trent 900 

engines. We are proposing this AD to 

detect cracking on the IP compressor 

rotor shaft rear balance land, which 

could lead to uncontained engine failure 

and damage to the airplane. 

DATES: We must receive comments on 

this proposed AD by May 20, 2013. 

ADDRESSES: You may send comments, 

using the procedures found in 14 CFR 

11.43 and 11.45, by any of the following 

methods: 

• Federal eRulemaking Portal: Go to 

http://www.regulations.gov. Follow the 

instructions for submitting comments. 

• Fax: 202–493–2251. 

• Mail: U.S. Department of 

Transportation, Docket Operations, M– 

30, West Building Ground Floor, Room 

W12–140, 1200 New Jersey Avenue SE., 

Washington, DC 20590. 

• Hand Delivery: Deliver to Mail 

address above between 9 a.m. and 5 

p.m., Monday through Friday, except 

Federal holidays. 

For service information identified in 

this AD, contact Rolls-Royce plc, 

Corporate Communications, P.O. Box 

31, Derby, England, DE248BJ; phone: 

011 44 1332 242424; fax: 011 44 1332 

245418; email: http://www.rollsroyce.com/contacts/civil_team.jsp. You 

may view this service information at the 

FAA, Engine & Propeller Directorate, 12 

New England Executive Park, 

Burlington, MA. For information on the 

availability of this material at the FAA, 

call 781–238–7125. 

Examining the AD Docket 

You may examine the AD docket on 

the Internet at http:// 

www.regulations.gov; or in person at the 

Docket Management Facility between 9 

a.m. and 5 p.m., Monday through 

Friday, except Federal holidays. The AD 

docket contains this proposed AD, the 

regulatory evaluation, any comments 

received and other information. The 

street address for the Docket Office 

(phone: 800–647–5527) is in the 

ADDRESSES section. Comments will be 

available in the AD docket shortly after 

receipt. 

FOR FURTHER INFORMATION CONTACT: 

Frederick Zink, Aerospace Engineer, 

Engine Certification Office, FAA, Engine 

& Propeller Directorate, 12 New England 

Executive Park, Burlington, MA 01803; 

phone: 781–238–7779; fax: 781–238– 

7199; email: frederick.zink@faa.gov. 

SUPPLEMENTARY INFORMATION: 

Comments Invited 

We invite you to send any written 

relevant data, views, or arguments about 

this proposed AD. Send your comments 

to an address listed under the 

ADDRESSES section. Include ‘‘Docket No. 

FAA–2007–28059; Directorate Identifier 

2007–NE–13–AD’’ at the beginning of 

your comments. We specifically invite 

comments on the overall regulatory, 

economic, environmental, and energy 


wreier-aviles on DSK5TPTVN1PROD with PROPOSALS
Federal Register / Vol. 78, No. 55 / Thursday, March 21, 2013 / Proposed Rules 17301 

aspects of this proposed AD. We will 

consider all comments received by the 

closing date and may amend this 

proposed AD because of those 

comments. 

We will post all comments we 

receive, without change, to http:// 

www.regulations.gov, including any 

personal information you provide. We 

will also post a report summarizing each 

substantive verbal contact we receive 

about this proposed AD. 

Discussion 

On May 15, 2012, we issued AD 

2012–10–12, Amendment 39–17061 (77 

FR 31176, May 25, 2012), for all RR 

RB211-Trent 553–61, 553A2–61, 556– 

61, 556A2–61, 556B–61, 556B2–61, 

560–61, 560A2–61, 768–60, 772–60, 

772B–60, 875–17, 877–17, 884–17, 

884B–17, 892–17, 892B–17, and 895–17 

turbofan engines. That AD requires 

continuing initial inspections, adding 

additional inspections, and a mandatory 

terminating action. That AD resulted 

from reports of additional cracking on 

RB211-Trent 700 and RB211-Trent 800 

IP compressor rotor shafts. We issued 

that AD to detect cracking on the IP 

compressor rotor shaft rear balance 

land, which could lead to uncontained 

engine failure and damage to the 

airplane. 

Actions Since Existing AD Was Issued 

Since we issued AD 2012–10–12, 

Amendment 39–17061 (77 FR 31176, 

May 25, 2012), a crack in a Trent 500 

IP compressor rotor shaft rear balance 

land was detected during a shop visit. 

Further engineering evaluation, done by 

RR, concluded that the cracking may 

also exist in Trent 900 engines. 

Relevant Service Information 

We reviewed RR Non-Modification 

Alert Service Bulletin (NMASB) No. 

RB.211–72–AH058, dated December 13, 

2012, and RR NMASB No. RB.211–72– 

AH059, dated December 11, 2012. 

NMASB No. RB.211–72–AH058 

describes procedures for inspection of 

RB211-Trent 553–61, 553A2–61, 556– 

61, 556A2–61, 556B–61, 556B2–61, 

560–61, and 560A2–61 engines. NMASB 

No. RB.211–72–AH059 describes 

procedures for inspection of RB211- 

Trent 970–84, 970B–84, 972–84, 972B– 

84, 977–84, 977B–84, and 980–84 

engines. 

FAA’s Determination 

We are proposing this AD because we 

evaluated all the relevant information 

and determined the unsafe condition 

described previously is likely to exist or 

develop in other products of the same 

type design. 

Proposed AD Requirements 

This proposed AD would retain all 

the requirements of AD 2012–10–12, 

Amendment 39–17061 (77 FR 31176, 

May 25, 2012). This proposed AD would 

add requirements to perform on-wing 

inspections for the Trent 500 and onwing and in-shop inspections for the 

Trent 900 engines. 

Costs of Compliance 

We estimate that this proposed AD 

would affect about 136 engines installed 

on airplanes of U.S. registry. We also 

estimate that it would take about 14 

hours per engine to perform required 

inspections. The average labor rate is 

$85 per hour. Replacement parts are 

estimated to cost about $2,271 per 

engine. Based on these figures, we 

estimate the cost of the proposed AD on 

U.S. operators to be $470,696. 

Authority for This Rulemaking 

Title 49 of the United States Code 

specifies the FAA’s authority to issue 

rules on aviation safety. Subtitle I, 

Section 106, describes the authority of 

the FAA Administrator. Subtitle VII, 

Aviation Programs, describes in more 

detail the scope of the Agency’s 

authority. 

We are issuing this rulemaking under 

the authority described in Subtitle VII, 

Part A, Subpart III, Section 44701, 

‘‘General requirements.’’ Under that 

section, Congress charges the FAA with 

promoting safe flight of civil aircraft in 

air commerce by prescribing regulations 

for practices, methods, and procedures 

the Administrator finds necessary for 

safety in air commerce. This regulation 

is within the scope of that authority 

because it addresses an unsafe condition 

that is likely to exist or develop on 

products identified in this rulemaking 

action. 

Regulatory Findings 

We have determined that this 

proposed AD would not have federalism 

implications under Executive Order 

13132. This proposed AD would not 

have a substantial direct effect on the 

States, on the relationship between the 

national Government and the States, or 

on the distribution of power and 

responsibilities among the various 

levels of government. 

For the reasons discussed above, I 

certify that the proposed regulation: 

(1) Is not a ‘‘significant regulatory 

action’’ under Executive Order 12866, 

(2) Is not a ‘‘significant rule’’ under 

the DOT Regulatory Policies and 

Procedures (44 FR 11034, February 26, 

1979), 

(3) Will not affect intrastate aviation 

in Alaska, to the extent that it justifies 

making a regulatory distinction, and 

(4) Will not have a significant 

economic impact, positive or negative, 

on a substantial number of small entities 

under the criteria of the Regulatory 

Flexibility Act. 

List of Subjects in 14 CFR Part 39 

Air transportation, Aircraft, Aviation 

safety, Incorporation by reference, 

Safety. 

The Proposed Amendment 

Accordingly, under the authority 

delegated to me by the Administrator, 

the FAA proposes to amend 14 CFR part 

39 as follows: 

PART 39—AIRWORTHINESS 

DIRECTIVES 

■ 1. The authority citation for part 39 

continues to read as follows: 

Authority: 49 U.S.C. 106(g), 40113, 44701. 

§ 39.13 [Amended] 

■ 2. The FAA amends § 39.13 by 

removing airworthiness directive (AD) 

2012–10–12, Amendment 39–17061 (77 

FR 31176, May 25, 2012), and adding 

the following new AD: 

Rolls-Royce plc: Docket No. FAA–2007– 

28059; Directorate Identifier 2007–NE– 

13–AD. 

(a) Comments Due Date 

The FAA must receive comments on this 

AD action by May 20, 2013. 

(b) Affected ADs 

This AD supersedes AD 2012–10–12, 

Amendment 39–17061 (77 FR 31176, May 25, 

2012). 

(c) Applicability 

This AD applies to Rolls-Royce plc (RR) 

RB211-Trent 553–61, 553A2–61, 556–61, 

556A2–61, 556B–61, 556B2–61, 560–61, 

560A2–61, 768–60, 772–60, 772B–60, 875– 

17, 877–17, 884–17, 884B–17, 892–17, 892B– 

17, 895–17, 970–84, 970B–84, 972–84, 972B– 

84, 977–84, 977B–84, and 980–84 turbofan 

engines. 

(d) Unsafe Condition 

This AD was prompted by detection of a 

crack in a Trent 500 intermediate-pressure 

(IP) compressor rotor shaft rear balance land 

with follow-on RR engineering evaluation 

concluding that cracking may also exist in 

Trent 900 engines. We are issuing this AD to 

detect cracking on the IP compressor rotor 

shaft rear balance land, which could lead to 

uncontained engine failure and damage to 

the airplane. 

(e) Compliance 

Comply with this AD within the 

compliance times specified, unless already 

done. 


wreier-aviles on DSK5TPTVN1PROD with PROPOSALS
17302 Federal Register / Vol. 78, No. 55 / Thursday, March 21, 2013 / Proposed Rules 

(f) RB211-Trent 700 Series Engines—Rear 

Balance Land Inspections 

(1) Within 625 cycles-in-service (CIS) after 

June 29, 2012, or before the next flight after 

the effective date of this AD, whichever 

occurs later, borescope inspect the IP 

compressor rotor shaft rear balance land. Use 

RB211 Trent 700 Series Propulsion System 

Non-Modification Alert Service Bulletin 

(NMASB) No. RB.211–72–AG270, Revision 4, 

dated March 21, 2011, sections 3.A.(2)(a) 

through 3.A.(2)(c) and 3.A.(3)(a) through 

3.A.(3)(c) for in-shop procedures, or 3.B.(2)(a) 

through 3.B.(2)(c) and 3.B.(4)(a) through 

3.B.(4)(c) for on-wing procedures, to do the 

inspection. 

(2) Thereafter, repeat the inspection within 

every 625 cycles-since-last inspection (CSLI). 

You may count CSLI from the last borescope 

inspection or the last eddy current inspection 

(ECI), whichever occurred last. 

(3) At each shop visit after the effective 

date of this AD, perform an ECI and visually 

inspect the IP compressor rotor shaft rear 

balance land, and visually inspect the 

balance weights. Use RB211 Trent 700 and 

Trent 800 Series Propulsion Systems NMASB 

No. RB.211–72–AG085, Revision 2, dated 

July 7, 2011, sections 3.A. through 3.C., to do 

the inspections. 

(g) RB211-Trent 800 Series Engines—Rear 

Balance Land Inspections 

(1) Within 475 CIS after June 29, 2012, or 

before the next flight after the effective date 

of this AD, whichever occurs later, borescope 

inspect the IP compressor rotor shaft rear 

balance land. Use RB211 Trent 800 Series 

Propulsion System NMASB No. RB.211–72– 

AG264, Revision 5, dated March 21, 2011, 

sections 3.A.(2)(b) through 3.A.(2)(c) and 

3.A.(3)(a) through 3.A.(3)(c) for in-shop 

procedures, or 3.B.(2)(a) through 3.B.(2)(c) 

and 3.B.(4)(a) through 3.B.(4)(c) for on-wing 

procedures, to do the inspection. 

(2) Thereafter, repeat the inspection within 

every 475 CSLI. You may count CSLI from 

the last borescope inspection or the last ECI, 

whichever occurred last. 

(3) At each shop visit, perform an ECI and 

visually inspect the IP compressor rotor shaft 

rear balance land, and visually inspect the 

balance weights. Use RB211 Trent 700 and 

Trent 800 Series Propulsion Systems NMASB 

No. RB.211–72–AG085, Revision 2, dated 

July 7, 2011, sections 3.A. through 3.C., to do 

the inspections. 

(h) RB211-Trent 500 Series Engines—Rear 

Balance Land Inspections 

(1) Within 340 CIS after the effective date 

of this AD, borescope inspect the IP 

compressor rotor shaft rear balance land. Use 

RB211 Trent 500 Series Propulsion Systems 

NMASB No. RB.211–72–AH058, dated 

December 13, 2012, sections 3.A.(2)(a) 

through 3.A.(2)(c), 3.A.(3)(a) through 

3.A.(3)(d), and 3.A.(5)(a) through 3.A.(5)(c) 

for on-wing procedures, to do the inspection. 

(2) Thereafter, repeat the inspection within 

every 340 CSLI. You may count CSLI from 

the last borescope inspection or the last ECI, 

whichever occurred last. 

(3) At each shop visit, perform an ECI and 

visually inspect the IP compressor rotor shaft 

rear balance land, and visually inspect the 

balance weights. Use RB211 Trent 500 and 

Trent 900 Series Propulsion Systems NonModification Service Bulletin (NMSB) No. 

RB.211–72–G448, Revision 3, dated July 7, 

2011, sections 3.D.(4) through 3.D.(5), 

3.D.(6)(f) through 3.D.(7)(w), 3.D.(8)(f) 

through 3.D.(8)(w), 3.D.(11), and 3.D.(12), to 

do the inspections. 

(i) RB211-Trent 900 Series Engines—Rear 

Balance Land Inspections 

(1) Within 280 flight cycles after the 

effective date of this AD, borescope inspect 

the IP compressor rotor shaft rear balance 

land. Use RB211 Trent 900 Series Propulsion 

Systems NMASB No. RB.211–72–AH059, 

dated December 11, 2012, sections 3.A.(2)(a) 

through 3.A.(2)(c), 3.A.(3)(a) through 

3.A.(3)(d), and 3.A.(5)(a) through 3.A.(5)(c), 

to do the inspection. 

(2) Thereafter, repeat the inspection within 

every 280 CSLI. You may count from the last 

borescope inspection or the last ECI, 

whichever occurred last. 

(3) At each shop visit after the effective 

date of this AD, perform an ECI and visually 

inspect the IP compressor rotor shaft rear 

balance land, and visually inspect the 

balance weights. Use RB211 Trent 500 and 

Trent 900 Series Propulsion Systems NMSB 

No. RB.211–72–G448, Revision 3, dated July 

7, 2011, sections 3.D.(4) through 3.D.(5), 

3.D.(6)(f) through 3.D.(7)(w), 3.D.(8)(f) 

through 3.D.(8)(w), 3.D.(11), and 3.D.(12), to 

do the inspection. 

(j) Mandatory Termination Action for 

RB211-Trent 700 and RB211-Trent 800 

Engines 

(1) For RB211-Trent 700 engines. At the 

next shop visit in which any level of 

inspection or strip is scheduled to be carried 

out on the IP compressor, remove the existing 

IP compressor balance weights. 

(2) For RB211-Trent 800 engines. At the 

next shop visit in which any level of 

inspection or strip is scheduled to be carried 

out on the IP compressor, remove the existing 

IP compressor balance weights. 

(3) Once you have removed the balance 

weights, do not re-install them on any IP 

compressor shaft rear balance land. 

(k) Credit for Previous Actions 

(1) For RB211-Trent 700 series engines: 

(i) If you borescope inspected your RB211- 

Trent 700 series engine using RB211 Trent 

700 Series Propulsion System NMASB No. 

RB.211–72–AG270, Revision 1, dated 

December 14, 2009, or Revision 2, dated 

December 21, 2010, or Revision 3, dated 

February 25, 2011, before the effective date 

of this AD, you have satisfied the 

requirements of paragraph (f)(1) of this AD. 

(ii) If you performed the ECI and visual 

inspection of your RB211-Trent 700 series 

engines using RB211 Trent 700 and Trent 800 

Series Propulsion Systems NMASB No. 

RB.211–72–AG085, Revision 1, dated 

September 27, 2010, before the effective date 

of this AD, you have satisfied the ECI and 

visual inspections required by paragraph 

(f)(3) of this AD. 

(2) For RB211-Trent 800 series engines: 

(i) If you borescope inspected your RB211- 

Trent 800 series engine using RB211 Trent 

800 Series Propulsion System NMASB No. 

RB.211–72–AG264, Revision 3, dated 

December 21, 2010, or Revision 4, dated 

February 25, 2011, before the effective date 

of this AD, you have satisfied the 

requirements of paragraph (g)(1) of this AD. 

(ii) If you performed the ECI and in-shop 

visual inspection of your RB211-Trent 800 

series engines using RB211 Trent 700 and 

Trent 800 Series Propulsion Systems NMASB 

No. RB.211–72–AG085, Revision 1, dated 

September 27, 2010, before the effective date 

of this AD, you have satisfied the ECI and 

visual inspections required by paragraph 

(g)(3) of this AD. 

(3) For RB211-Trent 500 and 900 series 

engines: 

(i) If you performed the ECI of your RB211- 

Trent 500 series engines using RB211 Trent 

500, 700 and 800 Series Propulsion Systems 

NMASB No. RB.211–72–AF260, Revision 4, 

dated July 28, 2009, and RB211 Trent 500 

and Trent 900 Series Propulsion Systems 

NMSB No. RB.211–72–G448, Revision 2, 

dated December 23, 2010 before the effective 

date of this AD, you have satisfied the ECIs 

required by paragraph (h)(3) of this AD. 

(ii) If you performed the in-shop visual 

inspection of your RB211-Trent 500 series 

engines using RB211 Trent 500 and Trent 900 

Series Propulsion Systems NMSB No. 

RB.211–72–G448, Revision 2, dated 

December 23, 2010, before the effective date 

of this AD, you have satisfied the in-shop 

visual inspections required by paragraph 

(h)(3) of this AD. 

(l) Definitions 

For the purpose of this AD, a shop visit is 

defined as introduction of an engine into a 

shop and disassembly sufficient to expose 

the IP compressor module rear face. 

(m) Alternative Methods of Compliance 

(AMOCs) 

The Manager, Engine Certification Office, 

FAA, may approve AMOCs for this AD. Use 

the procedures in 14 CFR 39.19 to make your 

request. 

(n) Related Information 

(1) For more information about this AD, 

contact Frederick Zink, Aerospace Engineer, 

Engine Certification Office, FAA, Engine & 

Propeller Directorate, 12 New England 

Executive Park, Burlington, MA 01803; 

phone: 781–238–7779; fax: 781–238–7199; 

email: frederick.zink@faa.gov. 

(2) European Aviation Safety Agency AD 

2013–0002, dated January 4, 2013 also 

pertains to the subject of this AD. 

(3) For service information identified in 

this AD, contact Rolls-Royce plc, Corporate 

Communications, P.O. Box 31, Derby, 

England, DE248BJ; phone: 011–44–1332– 

242424; fax: 011–44–1332–245418; Internet: 

http://www.rolls-royce.com/contact/ 

civil_team.jsp. 

(4) You may view the referenced service 

information at the FAA, Engine & Propeller 

Directorate, 12 New England Executive Park, 

Burlington, MA 01803. For information on 

the availability of this material at the FAA, 

call 781–238–7125. 


wreier-aviles on DSK5TPTVN1PROD with PROPOSALS
Federal Register / Vol. 78, No. 55 / Thursday, March 21, 2013 / Proposed Rules 17303 

Issued in Burlington, Massachusetts, on 

March 13, 2013. 

Colleen M. D’Alessandro, 

Assistant Manager, Engine & Propeller 

Directorate, Aircraft Certification Service. 

[FR Doc. 2013–06498 Filed 3–20–13; 8:45 am] 

BILLING CODE 4910–13–P 

DEPARTMENT OF HOUSING AND 

URBAN DEVELOPMENT 

24 CFR Part 203 

[Docket No. FR–5658–N–01] 

Federal Housing Administration (FHA): 

Direct Endorsement Program 

Solicitation of Comment on Timeframe 

for Conducting Pre-Endorsement 

Review 

AGENCY: Office of the Assistant 

Secretary for Housing—Federal Housing 

Commissioner, HUD. 

ACTION: Request for comments. 

SUMMARY: HUD is seeking comment on 

moving the timeframe that FHA 

conducts its pre-endorsement review of 

loans originated by Direct Endorsement 

lenders from a time that is prior to the 

lender closing each loan and before 

FHA’s endorsement of the mortgage for 

insurance to a period after the loan has 

been closed. Comment is sought on 

whether this shift in time, as further 

described in this document, would 

reduce the processing time before the 

loans may be closed, and facilitate loan 

closing. 

DATES: Comment Due Date. April 22, 

2013. 

ADDRESSES: Interested persons are 

invited to submit comments regarding 

this rule to the Regulations Division, 

Office of General Counsel, 451 7th 

Street SW., Room 10276, Department of 

Housing and Urban Development, 

Washington, DC 20410–0500. There are 

two methods for submitting public 

comments. All submissions must refer 

to the above docket number and title. 

1. Submission of Comments by Mail. 

Comments may be submitted by mail to 

the Regulations Division, Office of 

General Counsel, Department of 

Housing and Urban Development, 451 

7th Street, SW., Room 10276, 

Washington, DC 20410–0500. 

2. Electronic Submission of 

Comments. Interested persons may 

submit comments electronically through 

the Federal eRulemaking Portal at 

www.regulations.gov. HUD strongly 

encourages commenters to submit 

comments electronically. Electronic 

submission of comments allows the 

commenter maximum time to prepare 

and submit a comment, ensures timely 

receipt by HUD, and enables HUD to 

make them immediately available to the 

public. Comments submitted 

electronically through the 

www.regulations.gov Web site can be 

viewed by other commenters and 

interested members of the public. 

Commenters should follow the 

instructions provided on that site to 

submit comments electronically. 

Note: To receive consideration as public 

comments, comments must be submitted 

through one of the two methods specified 

above. Again, all submissions must refer to 

the docket number and title of the notice. 

No Facsimile Comments. Facsimile 

(FAX) comments are not acceptable. 

Public Inspection of Public 

Comments. All properly submitted 

comments and communications 

submitted to HUD will be available for 

public inspection and copying between 

8 a.m. and 5 p.m., Eastern Time, 

weekdays at the above address. Due to 

security measures at the HUD 

Headquarters building, an advance 

appointment to review the public 

comments must be scheduled by calling 

the Regulations Division at 202–708– 

3055 (this is not a toll-free number). 

Individuals with speech or hearing 

impairments may access this number 

through TTY by calling the Federal 

Relay Service at 800–877–8339 (this is 

a toll-free number). Copies of all 

comments submitted are available for 

inspection and downloading at 

www.regulations.gov. 

FOR FURTHER INFORMATION CONTACT: Joy 

Hadley, Director, Office of Lender 

Activities and Program Compliance, 

Office of Housing, U.S. Department of 

Housing and Urban Development, 490 

L’Enfant Plaza East SW., Room P3214, 

Washington, DC 20024–8000; telephone 

number 202–708–1515 (this is not a tollfree number). Persons with hearing or 

speech impairments may access this 

number through TTY by calling the tollfree Federal Relay Service at 800–877– 

8339. 

SUPPLEMENTARY INFORMATION: 

I. Background 

FHA grants lenders unconditional 

Direct Endorsement authority to close 

loans without prior FHA approval in 

accordance with the terms and 

conditions of HUD’s regulations in 24 

CFR 203.3. Under the Direct 

Endorsement program, the lender 

underwrites and closes the mortgage 

loan without prior FHA review or 

approval. Before being granted 

unconditional Direct Endorsement 

authority, the lender must submit a 

specified number of loan files for review 

and approval by FHA as described in 24 

CFR 203.3(b)(4). The regulations 

provide for the review of each loan file 

to be conducted by FHA, and the lender 

to be notified of the acceptability of the 

mortgage, prior to FHA endorsement of 

the mortgage for insurance. The Direct 

Endorsement program has been 

designed to give the lender sufficient 

certainty of FHA endorsement 

requirements to justify the assumption 

of the responsibilities involved in 

originating and closing mortgage loans 

without prior FHA review. 

At present, FHA generally conducts 

this review of the loan files required 

under 24 CFR 203.3(b)(4) prior to 

closing and, if acceptable, issues a 

commitment to the lender at that time. 

After closing, the mortgage is then 

submitted to FHA for endorsement for 

insurance. While this is the general 

procedure utilized by lenders seeking 

unconditional Direct Endorsement 

approval, FHA currently allows lenders 

to close the loans before submission for 

review. A lender is eligible for 

unconditional Direct Endorsement 

authority once FHA has reviewed and 

found acceptable the requisite number 

of loan files, at either pre-closing or preendorsement review, provided that the 

lender has met the other requirements 

for Direct Endorsement approval under 

24 CFR 203.3. 

II. This Request for Comments 

Proposed Transition of FHA’s Review to 

Post-Closing, Pre-Endorsement 

Through this document FHA proposes 

for consideration and public comment 

shifting the timeframe for FHA’s review 

of loans prior to endorsement from preclosing to post-closing. FHA proposes 

that a lender applying for unconditional 

Direct Endorsement authority submit 

the loan files required under 24 CFR 

203.3(b)(4) only after closing. After 

determining that the mortgage is 

acceptable and meets all FHA 

requirements, FHA will notify the 

lender that the loan has been endorsed. 

Feedback is sought on whether the 

proposed change in review time would 

benefit the lender by reducing the 

amount of time between loan 

origination and closing, and would 

result in operational savings of time and 

costs associated with approval 

timeframes, which FHA recognizes can 

be lengthy at times. Feedback is also 

sought on whether the proposed change 

in review time would benefit the 

borrower; that is, would the borrower be 

able to take advantage of shorter interest 

rate lock-in periods, which could help 

to ensure that the borrower receives the 


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