Federal Register / Vol. 61, No. 108 / Tuesday, June 4, 1996 / Rules and Regulations 28057

(b) Effective period. This section is

effective from 12:01 p.m. until 3 p.m. on

June 7, 1996, and from 6 a.m. to 6 p.m.

on June 8, 1996, unless extended or

terminated sooner by the Captain of the

Port, New York.

(c) Regulations. (1) The general

regulations contained in 33 CFR 165.23

apply to this safety zone.

(2) Vessels not participating in this

event, swimmers, and personal

watercraft of any nature are precluded

from entering or moving within the

safety zone without permission from the

Captain of the Port New York.

(3) All persons and vessels shall

comply with the instructions of the

Coast Guard Captain of the Port or the

designated on scene patrol personnel.

U.S. Coast Guard patrol personnel

include commissioned, warrant, and

petty officers of the Coast Guard. Upon

being hailed by a U.S. Coast Guard

vessel via siren, radio, flashing light, or

other means, the operator of a vessel

shall proceed as directed.

Dated: May 9, 1996.

T.H. Gilmour,

Captain, U.S. Coast Guard, Captain of the

Port, New York.

[FR Doc. 96–13859 Filed 6–3–96; 8:45 am]

BILLING CODE 4910–14–M

DEPARTMENT OF VETERANS

AFFAIRS

38 CFR Part 36

RIN 2900–AI01

Loan Guaranty: Miscellaneous

AGENCY: Department of Veterans Affairs.

ACTION: Final rule.

SUMMARY: This document amends the

Department of Veterans Affairs (VA)

regulations governing the VA home loan

program by deleting superseded

provisions, amending provisions to

reflect statutory changes, deleting

provisions that have no legal effect, and

updating a position title. This document

also amends the regulations by

incorporating a precedent opinion of the

VA General Counsel stating that the law

governing the housing loan and

specially adapted housing programs

does not preclude VA from approving a

loan or grant when the property will be

held in a Family Living Trust, provided

the veteran has at least an equitable life

estate in the property, the lien for any

VA financing attaches to the remainder,

and the trust arrangement is valid under

State law.

EFFECTIVE DATE: June 4, 1996.

FOR FURTHER INFORMATION CONTACT: Ms.

Judith Caden, Assistant Director for

Loan Policy (264), Loan Guaranty

Service, Veterans Benefits

Administration, Department of Veterans

Affairs, 810 Vermont Avenue, NW.,

Washington, DC 20420, (202) 273–7368.

SUPPLEMENTARY INFORMATION: Section

36.4216 is deleted since it has been

superseded by a new 38 CFR Part 44

which sets forth the current

requirements for governmentwide

debarment and suspension of program

participants, including manufactured

home lenders and loan holders from the

VA Loan Guaranty Program.

A recent legal opinion of the VA

General Counsel, VAOPGCPREC 26–95,

published in summary form in the

Federal Register on March 12, 1996, 61

FR 10063, holds that the law governing

the housing loan and specially adapted

housing programs does not preclude VA

from approving a loan or grant when the

property will be held in a Family Living

Trust, provided the veteran has at least

an equitable life estate in the property,

the lien for any VA financing attaches

to the remainder, and the trust

arrangement is valid under State law.

Previous regulations specifying the title

interest a veteran must obtain in the

subject property in order to qualify for

assistance under these programs did not

address property held in trust for estateplanning reasons. Accordingly, sections

36.4253(a), 36.4350(a), 36.4402(a), and

36.4515(a) are revised to reflect the

holding in this precedent opinion.

The Servicemen’s Readjustment Act

of 1944 originally permitted VA to pay

a guaranty claim when the holder

reported the loan as being in default.

The Deficit Reduction Act of 1984, P.L.

98–369, § 2512, amended what is now

codified as 38 U.S.C. § 3732(a) to require

that a liquidation sale must be held

before a claim may be paid. Sections

36.4316 and 36.4318 are amended to

reflect these statutory changes.

Section 36.4346(g)(2) is revised to

correct citation references.

Section 36.4402(a) is revised to

provide that a veteran is eligible for

assistance under section 2101(a) of

Chapter 21 if he or she has or will

acquire an interest in a suitable housing

unit which is at least a beneficial

interest in a revocable Family Living

Trust. This change incorporates the

holding of VAOPGCPREC 26–95, as

discussed above.

Section 36.4404(a) is revised to note

that the maximum statutory amount of

a grant to obtain specially adapted

housing is $38,000. Section 36.4404(b)

is revised to update the maximum

statutory amount of a grant for a

residence already adapted with special

features from $6,000 to $6,500.

The authority cited for § 36.4507(c) is

corrected, from 38 U.S.C. § 3710(c) to

§ 3711.

Regulations referring to covenants

purporting to restrict the sale or

occupancy of property by race, color,

religion, or national origin are removed.

Previous regulations (§§ 36.4350(b)(7)

and 36.4515(b)(7)) provided that the

violation of such a covenant will not

render title to property unacceptable to

VA. Also, under previous § 36.4510(d),

a borrower’s recording such a covenant

may have constituted an event of default

on a VA direct loan.

In removing these provisions, VA

stresses its continuing commitment to

fair housing. VA affirmatively

administers its housing programs in a

manner to further the purposes and

objectives of the Fair Housing Act, 42

U.S.C. §§ 3601–3631. VA will not

condone any violation of fair housing

law in its programs, and will take all

necessary measures to deal with any

violation that comes to VA’s attention.

VA believes, however, that present law

makes these regulatory provisions

unnecessary.

The provisions relating to raciallyrestrictive covenants were originally

added to the regulations in response to

the Supreme Court decision in Shelley

v. Kraemer, 334 U.S. 1 (1948). Although

that decision held that courts may not

enforce racially-restrictive covenants, it

also held such privately-created

covenants were not invalid and could be

effectuated by voluntary adherence.

Much has changed in the area of fair

housing since 1948. The Fair Housing

Act clearly and unambiguously

prohibits discrimination in the sale,

rental, or financing of housing on the

basis of race, color, religion, sex,

familial status, or national origin. VA

believes it is clear that such restrictive

covenants are absolutely null and void,

and any attempt to create or enforce

such a covenant would be unlawful.

Since these covenants have absolutely

no effect, VA sees no reason to provide

by regulation that violations of such

purported restrictions may be ignored in

considering whether or not a veteran

has good and marketable title. VA does

not believe any knowledgeable attorney

or title professional would consider the

existence of such an obsolete, unlawful

covenant in reviewing title.

Case law also holds that recorders of

deeds may not accept for recording new

racially restrictive covenants.

Accordingly, VA sees no purpose in

making the recording of such a covenant

an event of default.
28058 Federal Register / Vol. 61, No. 108 / Tuesday, June 4, 1996 / Rules and Regulations

Finally, all references to the Chief

Benefits Director in Part 36 are changed

to refer to this official’s new title, the

Under Secretary for Benefits.

This final rule consists of interpretive

rules, restatements of statute, updating a

position title, and nonsubstantive

changes, and, therefore, is not subject to

the notice-and-comment and effectivedate provisions of 5 U.S.C. 553.

The Secretary hereby certifies that

this final rule will not have a significant

economic impact on a substantial

number of small entities as they are

defined in the Regulatory Flexibility

Act, 5 U.S.C. 601–612. This final rule

would not cause a significant effect on

any entities since it consists of

interpretive rules, restatements of

statute, updating a position title, and

nonsubstantive changes. Therefore,

pursuant to 5 U.S.C. 605(b), this

amendment is exempt from the initial

and final regulatory-flexibility analysis

requirements of §§ 603 and 604.

The Catalog of Federal Domestic

Assistance Program numbers are 64.106,

64.114, 64.118 and 64.119.

List of Subjects in 38 CFR Part 36

Condominiums, Handicapped,

Housing loan programs—housing and

community development, Veterans.

Approved: May 24, 1996.

Jesse Brown,

Secretary of Veterans Affairs.

For the reasons set out in the

preamble, 38 CFR part 36 is amended as

set forth below.

PART 36—LOAN GUARANTY

1. The authority citation for part 36

§§ 36.4201 through 36.4287 continues to

read as follows:

Authority: Sections 36.4201 through

36.4287 issued under 38 U.S.C. 501, 3701–

3704, 3707, 3710–3714, 3719, 3720, 3729,

unless otherwise noted.

§ 36.4216 [Removed]

2. Section 36.4216 is removed.

§ 36.4220 [Amended]

3. In § 36.4220, paragraph (a)

introductory text is amended by

removing ‘‘Chief Benefits Director’’ both

times it appears and adding, in its place,

‘‘Under Secretary for Benefits’’.

§ 36.4221 [Amended]

4. In § 36.4221 paragraphs (b) and (c)

are amended by removing ‘‘Chief

Benefits Director’’ each time it appears

and adding, in its place, ‘‘Under

Secretary for Benefits’’.

§ 36.4226 [Amended]

5. In § 36.4226, paragraphs (d), (f) and

(g) are amended by removing ‘‘Chief

Benefits Director’’ and adding, in its

place ‘‘Under Secretary for Benefits’’.

6. In § 36.4253, paragraphs (a)(2) and

(e) are amended by removing ‘‘Chief

Benefits Director’’ and adding, in its

place, ‘‘Under Secretary for Benefits’’.

Paragraph (a)(3) is revised, and a new

paragraph (a)(4) is added to read as

follows:

§ 36.4253 Title and lien requirements.

(a) * * *

* * * * *

(3) A life estate, provided that the

remainder and reversionary interests are

subjected to the lien; or

(4) A beneficial interest in a revocable

Family Living Trust that ensures that

the veteran, or veteran and spouse, have

an equitable life estate, provided the

lien attaches to any remainder interest

and the trust arrangement is valid under

State law.

* * * * *

§ 36.4254 [Amended]

7. In § 36.4254, paragraph (a)(8) is

amended by removing ‘‘Chief Benefits

Director’’ and adding, in its place

‘‘Under Secretary for Benefits’’.

§ 36.4283 [Amended]

8. In § 36.4283, paragraph (k) is

amended by removing ‘‘Chief Benefits

Director’’ and adding, in its place,

‘‘Under Secretary for Benefits’’.

9. The authority citation for part 36

36.4300 through 36.4375 is revised to

read as follows:

Authority: Sections 36.4300 through

36.4375 issued under 38 U.S.C. 101, 501,

3701–3704, 3710, 3712–3714, 3720, 3729,

3732, unless otherwise noted.

§ 36.4312 [Amended]

10. In § 36.4312, paragraph (d)(1)(ix)

and (d)(7)(iv) are amended by removing

‘‘Chief Benefits Director’’ and adding, in

its place, ‘‘Under Secretary for

Benefits’’.

§ 36.4316 [Amended]

11. In § 36.4316, paragraph (c) is

removed, and paragraph (a) is amended

by removing ‘‘, submit a claim for

payment of the guaranty. The holder

may also then or thereafter’’, and

paragraph (b) is amended by removing

‘‘A claim for the guaranty, or’’ and

revising ‘‘the’’ to read: ‘‘The’’.

12. In § 36.4318, paragraph (a) is

revised to read as follows:

§ 36.4318 Refunding of loans in default.

(a) Upon receiving a notice of default

or a notice under § 36.4317, the

Secretary may within 30 days thereafter

require the holder upon penalty of

otherwise losing the guaranty or

insurance to transfer and assign the loan

and the security therefore to the

Secretary or to another designated by

the Secretary upon receipt of payment

in full of the balance of the

indebtedness remaining unpaid to the

date of such assignment. Such

assignment may be made without

recourse but the transferor shall not

thereby be relieved from the provisions

of § 36.4325.

* * * * *

13. In § 36.4320, paragraph (j) is

amended by removing ‘‘Chief Benefits

Director’’ and adding, in its place,

‘‘Under Secretary for Benefits’’;

paragraph (h)(2) is revised, and a new

authority citation is added at the end of

the section to read as follows:

§ 36.4320 Sale of security.

* * * * *

(h) * * *

(2) The holder may cancel any

insurance in force when the holder

acquires the property, provided the

holder has obtained the prior approval

of the Secretary. Coincident with the

notice of election to convey or transfer

the property to the Secretary or with the

acquisition of the property by the

holder, following such notice,

whichever is later, the holder shall

obtain endorsements on all such

insurance policies naming the Secretary

as an assured, as his/her interest may

appear. Such insurance policies shall be

forwarded to the Secretary at the time of

the conveyance or transfer of the

property to the Secretary or as soon after

that time as feasible.

* * * * *

(Authority: 38 U.S.C. 3732, Pub. L. 100–527)

§ 36.4335 [Amended]

14. In § 36.4335, the introductory text

is amended by removing ‘‘Chief Benefits

Director’’ and adding, in its place,

‘‘Under Secretary for Benefits’’.

§ 36.4342 [Amended]

15. In § 36.4342, paragraphs (b) and

(c) are amended by removing ‘‘Chief

Benefits Director’’ each time it appears

and adding, in its place ‘‘Under

Secretary for Benefits’’.

§ 36.4343 [Amended]

16. In § 36.4343, paragraph (a) is

amended by removing ‘‘Chief Benefits

Director’’ and adding, in its place,

‘‘Under Secretary for Benefits’’.

§ 36.4346 [Amended]

17. In § 36.4346, paragraph (g)(2) is

amended by removing ‘‘36.4331’’ and

adding, in its place, ‘‘44.205 and

44.305’’.
Federal Register / Vol. 61, No. 108 / Tuesday, June 4, 1996 / Rules and Regulations 28059

§ 36.4349 [Amended]

18. In § 36.4349, paragraphs (d), (f),

and (g) are amended by removing ‘‘Chief

Benefits Director’’ and adding, in its

place, ‘‘Under Secretary for Benefits’’.

19. In § 36.4350, paragraph (a)(2) is

amended by removing ‘‘Chief Benefits

Director’’ and adding, in its place,

‘‘Under Secretary for Benefits’’;

paragraph (b)(7) is removed; and

paragraph (b)(8) is redesignated as

paragraph (b)(7). Paragraph (a)(3) is

amended by removing ‘‘.’’ and adding,

in its place, ‘‘; or’’, and a new paragraph

(a)(4) is added to read as follows:

§ 36.4350 Estate of veteran in real

property.

(a) * * *

(4) A beneficial interest in a revocable

Family Living Trust that ensures that

the veteran, or veteran and spouse, have

an equitable life estate, provided the

lien attaches to any remainder interest

and the trust arrangement is valid under

State law.

* * * * *

§ 36.4352 [Amended]

20. Section 36.4352 is amended by

removing ‘‘Chief Benefits Director’’ and

adding, in its place, ‘‘Under Secretary

for Benefits’’.

§ 36.4364 [Amended]

21. In § 36.4364, paragraph (f) is

amended by removing ‘‘Chief Benefits

Director’’ and adding, in its place,

‘‘Under Secretary for Benefits’’.

§ 36.4393 [Amended]

22. In § 36.4393, paragraphs (g) and

(h) are amended by removing ‘‘Chief

Benefits Director’’ each time it appears

and adding, in its place, ‘‘Under

Secretary for Benefits’’.

23. The authority citation for part 36

36.4400 through 36.4411 continues to

read as follows:

Authority: Sections 36.4400 through

36.4411 issued under 72 Stat. 1114, 1168, as

amended (38 U.S.C. 501, 2101), unless

otherwise noted.

24. In § 36.4402, paragraph (a)(4)(iii)

is amended by removing ‘‘Chief Benefits

Director’’ and adding, in its place,

‘‘Under Secretary for Benefits’’.

Paragraph (a)(4)(iii) is further amended

by removing ‘‘;’’ and adding, in its

place, ‘‘, or’’; and a new paragraph

(a)(4)(iv) is added to read as follows:

§ 36.4402 Eligibility.

(a) * * *

(4) * * *

(iv) A beneficial interest in a

revocable Family Living Trust that

ensures that the veteran, or veteran and

spouse, have an equitable life estate,

provided the trust arrangement is valid

under State law;

* * * * *

25. In § 36.4404, paragraphs (a)

introductory text, (b)(2), and the

authority citation are revised to read as

follows:

§ 36.4404 Computation of cost.

(a) Computation of cost of housing

unit. Under section 2101(a) of chapter

21, for the purpose of computing the

amount of benefits payable to a veteranbeneficiary, there may be included in

the total cost to the veteran the

following amount, not to exceed

$38,000:

* * * * *

(b) * * *

(2) $6,500.

(Authority: 38 U.S.C. 2102(a), (b))

§ 36.4408 [Amended]

26. In § 36.4408, paragraph (b) is

amended by removing ‘‘Chief Benefits

Director’’ and adding, in its place,

‘‘Under Secretary for Benefits’’.

27. The authority citation for part 36

§§ 36.4500 through 36.4600 is revised to

read as follows:

Authority: Sections 36.4500 through

36.4600 issued under 38 U.S.C. 501, unless

otherwise noted.

28. In § 36.4507, paragraph (b)(2) is

amended by removing ‘‘Chief Benefits

Director, and adding, in its place,

‘‘Under Secretary for Benefits’’, and the

authority citation following paragraph

(c) is revised to read as follows:

§ 36.4507 Refinancing of mortgage or

other lien indebtedness.

* * * * *

(c) * * *

(Authority: 38 U.S.C. 3711)

* * * * *

§ 36.4510 [Removed]

29. In § 36.4510, paragraph (d) is

removed.

30. In § 36.4515, paragraph (a)(2) is

amended by removing ‘‘Chief Benefits

Director’’ and adding, in its place,

‘‘Under Secretary for Benefits’’; and by

removing paragraph (b)(7); and by

redesignating paragraph (b)(8) as

paragraph (b)(7). Paragraph (a)(3) is

amended by removing ‘‘.’’ in the last

sentence, and adding, in its place, ‘‘;

or’’; and a new paragraph (a)(4) is added

to read as follows:

§ 36.4515 Estate of veteran in real

property.

(a) * * *

* * * * *

(4) A beneficial interest in a revocable

Family Living Trust that ensures that

the veteran, or veteran and spouse, have

an equitable life estate, provided the

lien attaches to any remainder interest

and the trust arrangement is valid under

State law.

* * * * *

§ 36.4516 [Amended]

31. In § 36.4516, paragraph (c) is

amended by removing ‘‘Chief Benefits

Director’’ and adding, in its place,

‘‘Under Secretary for Benefits’’.

§ 36.4518 [Amended]

32. Section 36.4518 is amended by

removing ‘‘Chief Benefits Director’’ and

adding, in its place, ‘‘Under Secretary

for Benefits’’.

§ 36.4520 [Amended]

33. In § 36.4520, paragraph (b) is

amended by removing ‘‘Chief Benefits

Director’’ both times it appears and

adding, in its place, ‘‘Under Secretary

for Benefits’’.

§ 36.4600 [Amended]

34. In § 36.4600, paragraphs (g)(2) and

(j) are amended by removing ‘‘Chief

Benefits Director’’ and adding, in its

place, ‘‘Under Secretary for Benefits’’.

[FR Doc. 96–13855 Filed 6–3–96; 8:45 am]

BILLING CODE 8320–01–P

POSTAL SERVICE

39 CFR Part 233

Screening of Mail Reasonably

Suspected of Containing Nonmailable

Firearms

AGENCY: Postal Service.

ACTION: Final rule.

SUMMARY: On February 28, 1996, the

Postal Service published in the Federal

Register a proposed regulation outlining

the treatment of mail which is

reasonably suspected of being

dangerous to persons or property. The

rule also contains language which

allows for the screening of mail

reasonably suspected of containing

nonmailable firearms. The proposed

rule requested comments, but none were

received. Consequently, the Postal

Service hereby publishes this final rule.

EFFECTIVE DATE: June 4, 1996.

FOR FURTHER INFORMATION CONTACT:

George C. Davis, (202) 268–3076.

SUPPLEMENTARY INFORMATION: This

document creates a new subsection

233.11 of title 39, Code of Federal

Regulations, to include the requirements

for the treatment of mail which is

reasonably suspected of being

dangerous to persons or property. This