26702 Federal Register / Vol. 63, No. 92 /Wednesday, May 13, 1998 / Proposed Rules

DEPARTMENT OF HOUSING AND

URBAN DEVELOPMENT

24 CFR Parts 200 and 207

[Docket No. FR–4303–P–01]

RIN 2502–AH11

Electronic Submission of Required

Data by Multifamily Mortgagees to

Report Mortgage Delinquencies,

Defaults, Reinstatements, Assignment

Elections, and Withdrawals of

Assignment Elections

AGENCY: Office of the Assistant

Secretary for Housing-Federal Housing

Commissioner, HUD.

ACTION: Proposed rule; Notice of

proposed information collection

requirements.

SUMMARY: This proposed rule would

require mortgagees that hold or service

multifamily mortgages insured by HUD

to submit certain data electronically to

HUD in a HUD prescribed format.

Electronic submission is necessary

because the manual submission of HUD

forms has become a burden to servicing

mortgagees, as well as to HUD. This

proposed rule would apply to all

multifamily mortgagees in their

responsibility to report mortgage

delinquencies, mortgage defaults,

mortgage reinstatements, elections to

assign mortgages to HUD, and

withdrawal of assignment elections.

DATES: Comment due date: July 13,

1998.

ADDRESSES: Interested persons are

invited to submit comments regarding

this proposed rule to the Rules Docket

Clerk, Office of the General Counsel,

Room 10276, Department of Housing

and Urban Development, 451 Seventh

Street, SW, Washington, DC 20410.

Communications should refer to the

above docket number and title.

Facsimile (FAX) comments are not

acceptable. A copy of each comment

submitted will be available for public

inspection and copying during regular

business hours (7:30 a.m. to 5:30 p.m.)

eastern time at the above address.

FOR FURTHER INFORMATION CONTACT:

Willie Spearmon, Director, Office of

Business Products, Room 6134,

Department of Housing and Urban

Development, 451 Seventh Street, SW,

Washington, DC 20410, telephone (202)

708–3000 (this is not a toll-free

number). Individuals with hearing or

speech impairments may access this

number via TTY by calling the Federal

Information Relay Service at (800) 877–

8339 (this is a toll-free number).

SUPPLEMENTARY INFORMATION:

I. Background

HUD obtains data regarding the status

of delinquent insured mortgage loans on

multifamily projects by using Form

HUD–92426, Multifamily Default Status

Report. HUD needs the information

submitted on the form in order to

monitor mortgage loans for which the

mortgagees are experiencing payment or

other difficulties. In accordance with

the requirements of 24 CFR part 207, the

mortgagee must prepare and sign this

form under the specified circumstances

and mail it to HUD. When HUD receives

the form, it must sign it and return it to

the mortgagee to acknowledge receipt of

the form.

To replace this burdensome

paperwork process, HUD has developed

a method for mortgagees to submit the

data currently collected on Form HUD–

92426, as well as to report the date of

the mortgagees’ last physical inspection

of the project, using the Internet.

According to this new method, the

mortgagee will electronically submit the

required data to HUD, after which an

electronic receipt will automatically be

returned. HUD will provide, at no cost

to mortgagees, ‘‘stand alone’’ software

and technical support for that software,

which is designed to run on IBMcompatible personal computers (PCs).

Mortgagees will, however, need to

provide their own PCs and Internet

connections. Mortgagees that do not

choose to initiate Internet access for

themselves may contract with another

entity or individual to act on their

behalf to report the data electronically;

HUD believes that this is not likely to

be necessary in most cases.

One of HUD’s primary concerns is the

costs mortgagees may incur in

establishing Internet access if they have

not already done so. For this reason,

HUD has decided to allow for a

staggered implementation of this

rulemaking, under which smaller

mortgagees would be given more time to

comply with the new electronic

reporting requirements. HUD believes,

however, that electronic tracking of the

default and reinstatement data generally

will reduce costs for mortgagees. HUD

has field-tested electronic submission of

this data on a voluntary pilot basis with

a number of mortgagees, and has

received generally favorable responses.

While HUD hopes to begin

implementing the electronic reporting

requirements in this rule in July 1998,

HUD encourages mortgagees to comply

with these requirements voluntarily to

the extent possible, in order for the

mortgagees and HUD to realize an early

advantage of cost savings.

II. This Proposed Rule

This document proposes to amend the

regulations in 24 CFR parts 200 and 207

related to multifamily housing mortgage

insurance, in order to require

mortgagees with insured multifamily

mortgage loans to submit information

reporting mortgage delinquencies,

defaults, reinstatements, assignment

elections, and withdrawals of

assignment elections electronically,

rather than in writing on Form HUD–

92426. Specifically, this document

proposes to amend the regulations as

follows:

(1) This proposed rule would add a

new subpart B to part 200, entitled

‘‘Electronic Submission of Required

Data for Mortgage Defaults and Mortgage

Insurance Claims for Insured

Multifamily Mortgages.’’ This new

subpart B would require multifamily

mortgagees to submit the data

electronically, and it would provide the

staggered schedule of effectiveness. As

mentioned above, HUD would allow

smaller mortgagees (i.e., those with

fewer insured mortgage loans) more

time to comply with the electronic

submission requirements. This new

subpart would also provide for an

exception to the electronic submission

requirements, subject to HUD approval,

for very small mortgagees for which

compliance would represent a financial

hardship.

(2) This document also proposes

several conforming changes to the

current requirements in part 207. In

§ 207.256, which requires mortgagees to

notify HUD of defaults, this document

proposes to require mortgagees to notify

HUD in the manner prescribed in the

new subpart B of part 200, rather than

in writing. This document would

similarly amend § 207.256a, which

requires mortgagees to notify HUD if a

mortgage loan is reinstated, and

§ 207.258, which requires mortgagees to

notify HUD if they elect to assign a

mortgage to HUD or to acquire a

property and convey title to HUD.

III. Other Matters

A. Paperwork Burden

The information collection

requirements contained in this proposed

rule have been submitted to the Office

of Management and Budget (OMB) for

review in accordance with the

Paperwork Reduction Act of 1995 (44

U.S.C. 3501–3520).

In accordance with 5 CFR

1320.5(a)(1)(iv), HUD is setting forth the

following concerning the proposed

collection of information:
Federal Register / Vol. 63, No. 92 /Wednesday, May 13, 1998 / Proposed Rules 26703

Description Number of

respondents

Total annual

response

Minutes per

response

Total

hours

Electronic transfer of information ..................................................................... 420 2000 10 333

Interested persons are invited to

submit comments regarding the

information collection requirements in

this proposed rule. Comments must be

received within 60 days of the date of

this proposal. Comments must refer to

the proposed rule by name and docket

number (FR 4303), and must be sent to

Joseph F. Lackey, Jr., HUD Desk Officer,

Office of Management and Budget, New

Executive Office Building, Washington,

DC 20503.

B. Regulatory Flexibility Act

The Secretary, in accordance with the

Regulatory Flexibility Act (5 U.S.C.

605(b)), has reviewed this proposed rule

before publication and by approving it

certifies that this proposed rule would

not have a significant economic impact

on a substantial number of small

entities. The electronic submission

requirements in this proposed rule

should reduce burden and costs for all

mortgagees. As stated above, HUD will

also reduce the burden on mortgagees

by providing the software and technical

support necessary to facilitate the

electronic submission requirements.

Therefore, HUD has determined that

this proposed rule would not have a

significant economic impact on a

substantial number of small entities.

Notwithstanding this determination,

HUD specifically invites comments

regarding alternatives to this proposed

rule that will meet HUD’s objectives as

described in this preamble.

C. Environmental Impact

This proposed rule is categorically

excluded from environmental review

under the National Environmental

Policy Act (42 U.S.C. 4321). The

proposed addition to part 200 of a new

subpart B falls within the exclusion

provided by 24 CFR 50.19(c)(1), in that

it does not direct, provide for assistance

or loan and mortgage insurance for, or

otherwise govern or regulate, real

property acquisition, disposition,

leasing, rehabilitation, alteration,

demolition, or new construction, or

establish, revise, or provide for

standards for construction or

construction materials, manufactured

housing, or occupancy. The proposed

amendments to part 207 are

categorically excluded under 24 CFR

50.19(c)(2), because they amend an

existing document, and the existing

document as a whole would not fall

within the exclusion in 24 CFR

50.19(c)(1), but the amendments by

themselves would.

D. Executive Order 12612, Federalism

The General Counsel, as the

Designated Official under section 6(a) of

Executive Order 12612, Federalism, has

determined that the policies contained

in this proposed rule would not have

substantial direct effects on States or

their political subdivisions, on the

relationship between the Federal

Government and the States, or on the

distribution of power and

responsibilities among the various

levels of government. This proposed

rule relates only to the manner in which

mortgagees submit required information

to HUD, and it would not affect the

federalism concerns addressed in the

Order. As a result, this proposed rule is

not subject to review under the Order.

E. Unfunded Mandates Reform Act

Title II of the Unfunded Mandates

Reform Act of 1995 (Pub. L. 104–4;

approved March 22, 1995) (UMRA)

establishes requirements for Federal

agencies to assess the effects of their

regulatory actions on State, local, and

tribal governments, and on the private

sector. This rule would not impose any

Federal mandates on any State, local, or

tribal government, or on the private

sector, within the meaning of the

UMRA.

F. Catalog of Federal Domestic

Assistance

The Catalog of Federal Domestic

Assistance number is 14.155.

List of Subjects

24 CFR Part 200

Administrative practice and

procedure, Claims, Equal employment

opportunity, Fair housing, Home

improvement, Housing standards, Lead

poisoning, Loan programs—housing and

community development, Minimum

property standards, Mortgage insurance,

Organization and functions

(Government agencies), Penalties,

Reporting and recordkeeping

requirements, Social security,

Unemployment compensation, Wages.

24 CFR Part 207

Manufactured homes, Mortgage

insurance, Reporting and recordkeeping

requirements, Solar energy.

Accordingly, 24 CFR Chapter II is

proposed to be amended as follows:

PART 200—INTRODUCTION TO FHA

PROGRAMS

1. The authority citation for 24 CFR

part 200 continues to read as follows:

Authority: 12 U.S.C. 1701–1715z–18; 42

U.S.C. 3535(d).

2. In part 200, a new subpart B,

consisting of §§ 200.120 through

200.121, is added to read as follows:

Subpart B—Electronic Submission of

Required Data for Mortgage Defaults

and Mortgage Insurance Claims for

Insured Multifamily Mortgages

Sec.

200.120 Purpose and applicability.

200.121 Requirements and effectiveness.

§ 200.120 Purpose and applicability.

(a) Purpose. The purpose of this

subpart B is to require mortgagees of all

multifamily projects whose mortgages

are insured or coinsured by HUD to

submit electronically information

regarding mortgage delinquencies,

defaults, reinstatements, elections to

assign, and withdrawals of assignment

elections, and related information, as

that information is required by 24 CFR

part 207 and Form HUD–92426 (which

is available at the Department of

Housing and Urban Development, HUD

Custom Service Center, 451 7th Street,

SW, Room B–100, Washington, DC

20410; telephone (800) 767–7465).

(b) Applicability. This subpart applies

to all HUD multifamily mortgage

insurance and coinsurance programs.

§ 200.121 Requirements and effectiveness.

(a) Multifamily mortgagees, which are

required by 24 CFR part 207 to report

mortgage delinquencies, defaults,

reinstatements, assignment elections,

withdrawals of assignment elections,

and related information, must submit

this information electronically, over the

Internet, in accordance with the

following schedule of effectiveness:

(1) Mortgagees having 70 or more

insured mortgage loans must comply

with this section by no later than

January 1, 1999;

(2) Mortgagees having from 26 to 69

insured mortgage loans must comply

with this section by no later than

January 1, 2000;

(3) Mortgagees having from 11 to 25

insured mortgage loans must comply

with this section by no later than

January 1, 2001;
26704 Federal Register / Vol. 63, No. 92 /Wednesday, May 13, 1998 / Proposed Rules

(4) Mortgagees having 10 or fewer

insured mortgage loans must comply

with this section by no later than

January 1, 2002.

(b) Exception. On or after January 1,

2002, mortgagees that hold or service

fewer than 10 multifamily mortgages

may continue to report mortgage

delinquencies, defaults, reinstatements,

assignment elections, withdrawals of

assignment elections, and related

information in writing on Form HUD–

92426 only with specific HUD approval.

HUD will grant such approval, upon

application by the mortgagee, for

reasons of hardship due to insufficient

financial resources to purchase the

required hardware and Internet access.

(c) HUD will not accept reports of

information regarding defaults,

reinstatements, assignment elections,

and related information in a manner

that is not in accordance with this

section. Failure on the part of

mortgagees to report this information as

required by 24 CFR part 207 and this

section may result in HUD’s application

of the sanctions and surcharges

specified in 24 CFR part 207.

PART 207—MULTIFAMILY HOUSING

MORTGAGE INSURANCE

3. The authority citation for 24 CFR

part 207 continues to read as follows:

Authority: 12 U.S.C. 1701z–11(e), 1713,

and 1715b; 42 U.S.C. 3535(d).

4. Section 207.256 is revised to read

as follows:

§ 207.256 Notice.

(a) If the default as defined in

§ 207.255 is not cured within the 30

days grace period, the mortgagee must,

within 30 days thereafter, notify the

Commissioner of such default, in the

manner prescribed in 24 CFR part 200,

subpart B.

(b) Notwithstanding § 207.255(a)(2),

the mortgagee must give notice to the

Commissioner, in the manner

prescribed in 24 CFR part 200, subpart

B, of the failure of the mortgagor to

comply with such covenant, regardless

of the fact the mortgagee may not have

elected to accelerate the debt.

5. Section 207.256a is revised to read

as follows:

§ 207.256a Reinstatement of defaulted

mortgage.

If, after default and prior to the

completion of foreclosure proceedings,

the mortgagor cures the default, the

insurance shall continue as if a default

had not occurred, provided the

mortgagee gives notice of reinstatement

to the Commissioner, in the manner

prescribed in 24 CFR part 200, subpart

B.

6. Section 207.258 is amended by

revising paragraphs (a) and (b)(1), to

read as follows:

§ 207.258 Insurance claim requirements.

(a) Alternative election by mortgagee.

When the mortgagee becomes eligible to

receive mortgage insurance benefits

pursuant to § 207.255(c), it must, within

45 days thereafter, give the

Commissioner notice, in the manner

prescribed in 24 CFR part 200, subpart

B, of its intention to file an insurance

claim and of its election either to assign

the mortgage to the Commissioner, as

provided in paragraph (b) of this

section, or to acquire and convey title to

the Commissioner, as provided in

paragraph (c) of this section.

(b) * * *

(1) Notice of assignment. On the date

the assignment of the mortgage is filed

for record, the mortgagee must notify

the Commissioner, in the manner

prescribed in 24 CFR part 200, subpart

B, of such assignment, and must also

notify the FHA Comptroller by telegram

of such recordation.

* * * * *

April 8, 1998.

Dated: May 6, 1998.

Art Agnos,

Acting General Deputy, Assistant Secretary

for Housing, Deputy Federal Housing

Commissioner.

[FR Doc. 98–12615 Filed 5–12–98; 8:45 am]

BILLING CODE 4210–27–P