Source: https://www.federalregister.gov/documents/2002/12/27/02-32753/procedure-for-conducting-monthly-survey-of-rates-and-terms-on-conventional-one-family-non-farm
Timestamp: 2018-02-22 01:50:22
Document Index: 798274126

Matched Legal Cases: ['art 906', 'ART 906', '§\u2009906', '§\u2009906', '§\u2009906', '§\u2009906', '§\u2009906', '§\u2009731']

Federal Register :: Procedure for Conducting Monthly Survey of Rates and Terms on Conventional One-Family Non-farm Mortgage Loans
A Rule by the Federal Housing Finance Board on 12/27/2002
This rule will become effective on January 27, 2003.
78959-78961 (3 pages)
No. 2002-62
List of Subjects in 12 CFR Part 906
PART 906—OPERATIONS.
https://www.federalregister.gov/d/02-32753 https://www.federalregister.gov/d/02-32753
The Federal Housing Finance Board (Finance Board) is making certain technical amendments to its regulation setting forth the practices and procedures for conducting the Monthly Survey of Rates and Terms on Conventional One-Family, Non-farm Mortgage Loans (Monthly Interest Rate Survey or MIRS). The amendments are being adopted solely to conform the text of the rule to the revised practices and Start Printed Page 78960procedures for MIRS sampling and weighting methodology, which are the subject of a Notice published elsewhere in this issue of the Federal Register.
Joseph A. McKenzie, Deputy Chief Economist, (202) 408-2845 or mckenziej@fhfb.gov; Charlotte A. Reid, Special Counsel, Office of General Counsel (202) 408-2510 or reidc@fhfhb.gov; Federal Housing Finance Board, 1777 F Street, NW., Washington, DC 20006.
On September 26, 2000, the Finance Board published in the Federal Register (65 FR 57813) a notice proposing several changes to the Monthly Interest Rate Survey (preliminary notice). MIRS provides a statistical base for certain housing finance benchmarks, such as the annual adjustments to the maximum dollar limits for the purchase of conventional mortgages by Fannie Mae and Freddie Mac. See 12 U.S.C. 1717(b)(2), 1454(a)(2), respectively.[1]
The preliminary notice recommended revising the sampling and weighting methodology from one based on lender type and region to one based solely on lender size, eliminating the monthly table of mortgage interest rates and terms by lender type (Table III of the monthly MIRS release), and adjusting the quarterly table of mortgage rates and terms by metropolitan area by adding and deleting several metropolitan areas so that only the largest 32 metropolitan areas would be reported (Table IV of the January, April, July, and October MIRS releases).
Changes to MIRS are authorized under Federal Home Loan Bank Act (Act) provisions that require the on-going availability of indexes used to calculate the interest rates on adjustable rate mortgages (ARMs).[2] The Act expressly permits the Chairperson of the Finance Board to approve changes to the methodology that affect the availability of adjustable rate mortgage indexes. Additionally, the Finance Board may substitute substantially similar indexes if it can no longer make an index available and “if the * * * Chairperson of the Finance Board * * * determines, after notice and opportunity for comment, that: (A) The new index is based on data substantially similar to that of the original index; and (B) the substitution of the new index will result in an interest rate substantially similar to the rate in effect at the time the original index became unavailable.” See 12 U.S.C. 1437 note.
Under this authority, and in response to the comments on the preliminary notice received by the Finance Board, the Chairman of the Finance Board has authorized certain changes to MIRS data sampling and weighting methodology and the designation of substitute indexes. These changes are set forth in a final Notice that is published elsewhere in this issue of the Federal Register. In accordance with the final Notice, MIRS data will use a sampling and weighting methodology based on lender size and lender type. There will be four lender-size classes and three lender-type classes (commercial banks, mortgage companies, and savings institutions). Table III of the monthly MIRS release will continue to be made available, but the “Savings and Loan Association” and “Mutual Savings Bank” categories will be collapsed in to a single “Savings Institutions” category. The final Notice also will adjust the quarterly table of mortgage rates and terms by metropolitan area by adding and deleting several metropolitan areas so that only the largest 32 metropolitan areas would be reported (Table IV of the January, April, July, and October MIRS releases). Additionally, the Notice will designate certain substitute indexes.
Accordingly, section 906.3 of the Finance Board's regulations, which sets forth the existing practice and procedures for conducting MIRS, is being revised to reflect these changes. The final rule will replace the reference to savings and loan associations and mutual savings banks with a collective reference to “savings institutions,” and delete the reference to the number of lenders sampled. The final rule also adds a sentence stating that the preliminary MIRS weights are based on lender type and lender size. Other MIRS changes, such as the revision of Table IV and the designation of successor ARM index rates, do not require any textual changes to section 906.3 of the Finance Board's regulations.
The Finance Board is adopting these revisions in § 906.3 to ensure that the text of the rule is fully consistent with MIRS practice and procedures, as revised pursuant to the final Notice. The revisions in the rule are minimal and technical in nature, and are intended to achieve consistency in the descriptive terminology governing MIRS sampling and weighting methodology. Additionally, the Finance Board is deleting the provisions that are set forth in paragraph (c) of § 906.3 and in section 906.4 of the Finance Board's regulations, as obsolete. None of the rule text changes are intended to implement any regulatory changes to any substantive rights.
The changes to MIRS sampling and weighting methodology will be implemented in January 2003 and will be published in late February 2003. Changes to the published MIRS tables also will occur with the publication of the January 2003 data in late February. The January 2003 implementation will allow MIRS data to be weighted using a consistent methodology within each calendar year. The amendments to §§ 906.3 and 906.4 of the Finance Board's regulations also will be effective January 2003.
The final rule applies only to the Finance Board, which does not come within the meaning of “small entities,” as defined in the Regulatory Flexibility Act (RFA). See 5 U.S.C. 601(6). Therefore, in accordance with section 605(b) of the RFA, see id. at 605(b), the Finance Board hereby certifies that this final rule will not have a significant economic impact on a substantial number of small entities.
The final rule does not contain any substantive changes to MIRS data collection form or other information under the Paperwork Reduction Act of 1995. See 44 U.S.C. 3501 et seq. The current Office of Management and Budget clearance for the form is set to expire on June 30, 2004.
Organizational functions (Government agencies)
End Amendment Part Start Part Start Printed Page 78961
Authority: 12 U.S.C. 1422a, 1422b, and 1437 note.
2. Revise § 906.3 to read as follows:
3. Remove and reserve § 906.4.
1. 1 The Housing and Community Development Act of 1980 tied the Fannie Mae and Freddie Mac conforming loan limits to MIRS. See Pub. L. 96-399, Title III, Section 313(a), (b), 94 Stat. 1644-45 (Oct. 8, 1980). Specifically, Fannie Mae and Freddie Mac are required by their respective statutes, which are nearly identical, to base the annual dollar limit on the “the national one-family house price in the monthly survey of all major lenders conducted by the [Finance Board].” See 12 U.S.C. 1717(b)(2), 1454(a)(2) (conforming loan limit provisions). The Finance Board inherited the task of conducting MIRS from the former Federal Home Loan Bank Board (FHLBB) pursuant to section 402(e)(3) of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (“FIRREA”), Pub. L. 101-73, Title VII, Section 402(e)(3), 103 Stat. 183 (1989), and was substituted for the former FHLBB in the conforming loan limit provisions pursuant to §§ 731(f)(1)(B) and (f)(2)(B) of FIRREA.
2. Section 402(e)(3) of FIRREA amended the Act to specify that the Chairperson of the Finance Board “shall take such action as may be necessary to assure that the indexes prepared by the * * * Federal Home Loan Bank Board * * * immediately prior to the enactment of this subsection and used to calculate the interest rate on adjustable-rate mortgage instruments continue to be available.” See 12 U.S.C. 1437 note.
[FR Doc. 02-32753 Filed 12-26-02; 8:45 am]