This section of the FEDERAL REGISTER

contains editorial corrections of previously

published Presidential, Rule, Proposed Rule,

and Notice documents. These corrections are

prepared by the Office of the Federal

Register. Agency prepared corrections are

issued as signed documents and appear in

the appropriate document categories

elsewhere in the issue.

Corrections Federal Register

40656 

Vol. 73, No. 136 

Tuesday, July 15, 2008 

DEPARTMENT OF HOUSING AND 

URBAN DEVELOPMENT 

Office of Federal Housing Enterprise 

Oversight 

12 CFR Part 1750 

RIN 2550–AA38 

Risk-Based Capital Regulation—Loss 

Severity Amendments 

Correction 

In rule document E8–13378 beginning 

on page 35893 in the issue of 

Wednesday, June 25, 2008 make the 

following corrections: 

1. On page 35893, in the third 

column, the last paragraph and its 

accompanying footnotes should read as 

follows: 

Title XIII of the Housing and 

Community Development Act of 1992, 

Public Law 102–550, titled the Federal 

Housing Enterprises Financial Safety 

and Soundness Act of 1992 (Act) (12 

U.S.C. 4501 et seq.), established OFHEO 

as an independent office within the 

Department of Housing and Urban 

Development to ensure that Fannie Mae 

and Freddie Mac (collectively the 

Enterprises) are adequately capitalized, 

operate safely and soundly, and comply 

with applicable laws, rules and 

regulations. The Act provides that the 

Director of OFHEO (Director) is 

authorized to make such determinations 

and take such actions as the Director 

determines necessary with respect to the 

issuance of regulations regarding, 

among other things, the required capital 

levels for the Enterprises.1 The Act 

further provides that the Director shall 

issue regulations establishing the riskbased capital test (Risk-Based Capital 

Regulation) and that the Risk-Based 

Capital Regulation, subject to certain 

confidentiality provisions, shall be 

sufficiently specific to permit an 

individual other than the Director to 

apply the risk-based capital test in the 

same manner as the Director.2

1 12 U.S.C. 4513(a), (b)(1), (b)(3). 

2 12 U.S.C. 1361(e)(1), (e)(3). 

2. On page 35894, in the first column, 

the first full paragraph and its 

accompanying footnotes should read as 

follows: 

Pursuant to the Act, OFHEO 

published a final regulation setting forth 

a risk-based capital test which forms the 

basis for determining the risk-based 

capital requirement for each Enterprise.3

The Risk-Based Capital Regulation has 

been amended to incorporate corrective 

and technical amendments that enhance 

the transparency sensitivity to risk and 

accuracy of the calculation of the riskbased capital requirement.4

3 Risk-Based Capital, 66 FR 47730 

(September 13, 2001), 12 CFR part 1750. 4 Risk-Based Capital, 66 FR 47730 

(September 13, 2001), 12 CFR part 1750, as 

amended, 67 FR 11850 (March 15, 2002), 67 

FR 19321 (April 19, 2002), 67 FR 66533 

(November 1, 2002), 68 FR 7309 (February 

13, 2003), 71 FR 75085 (December 14, 2006). 

3. On the same page, in the second 

column, the first full paragraph and its 

accompanying footnote should read as 

follows: 

Consistent with the Act and OFHEO’s 

commitment to review, update and 

enhance the Risk-Based Capital 

Regulation in order to ensure an 

accurate risk sensitive and transparent 

calculation of the risk-based capital 

requirement, OFHEO published a notice 

of proposed rulemaking (NPRM) to 

incorporate amendments to the RiskBased Capital Regulation.5 Specifically, 

OFHEO proposed two changes to the 

Risk-Based Capital Regulation. The first 

change was proposed because certain 

loss severity equations resulted in the 

Enterprises recording profits instead of 

losses on foreclosed mortgages during 

the calculation of the risk-based capital 

requirement. The current loss severity 

equations overestimate Enterprise 

recoveries for defaulted government 

guaranteed and low loan-to-value loans. 

The results generated by the current loss 

severity equations are not consistent 

with the Risk-Based Capital Regulation 

and result in significant reductions in 

the risk-based capital requirements for 

the Enterprises. The second change 

relates to the treatment of Federal 

Housing Administration insurance 

associated with single-family loans with 

a loan-to-value ratio below 78%. 

OFHEO proposed changes related to 

these loans that would make the RiskBased Capital Regulation consistent 

with current law. 5 Risk-Based Capital-Loss Severity 

Amendments, 72 FR 68656 (December 5, 

2007). 

[FR Doc. Z8–13378 Filed 7–14–08; 8:45 am] 

BILLING CODE 1505–01–D 

ebenthall on PRODPC60 with NOTICES6