Multifamily Accelerated Processing (MAP): MAP Lender Quality Assurance Enforcement, 43242-43246 [05-14744]

Agencies

• DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

[Federal Register Volume 70, Number 142 (Tuesday, July 26, 2005)]
[Rules and Regulations]
[Pages 43242-43246]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 05-14744]



[[Page 43241]]

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Part IV





Department of Housing and Urban Development





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24 CFR Part 200



Multifamily Accelerated Processing (MAP): MAP Lender Quality Assurance 
Enforcement; Final Rule

Federal Register / Vol. 70, No. 142 / Tuesday, July 26, 2005 / Rules 
and Regulations

[[Page 43242]]


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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

24 CFR Part 200

[Docket No. FR-4836-F-02]
RIN 2502-AI01


Multifamily Accelerated Processing (MAP): MAP Lender Quality 
Assurance Enforcement

AGENCY: Office of the Assistant Secretary for Housing--Federal Housing 
Commissioner, HUD.

ACTION: Final rule.

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SUMMARY: This final rule provides the bases for, and procedures 
applicable to, enforcement actions under Multifamily Accelerated 
Processing (MAP), a form of ``fast-track processing'' that gives 
qualified lenders the option of preparing the applicable Federal 
Housing Administration (FHA) forms and doing preliminary underwriting 
for certain loan applications. This final rule follows publication of a 
December 17, 2004, proposed rule.

DATES: Effective Date: August 25, 2005.

FOR FURTHER INFORMATION CONTACT: Michael McCullough, Director, Office 
of Multifamily Development, Office of Housing, Department of Housing 
and Urban Development, 451 Seventh Street, SW., Room 6138, Washington, 
DC 20410-0500; telephone (202) 708-1142 (this is not a toll-free 
number). Persons with hearing or speech disabilities may access this 
number through TTY by calling the toll-free Federal Information Relay 
Service at (800) 877-8339.

SUPPLEMENTARY INFORMATION:

I. Background

    Multifamily lenders that are approved MAP lenders and that process 
a multifamily mortgage loan using MAP procedures do so with the 
understanding and agreement that their loan processing actions and 
decisions are subject to HUD review. By allowing a MAP lender to 
prepare much of the documentation for a loan submission for FHA 
multifamily mortgage insurance, HUD places confidence in the lender's 
integrity and competence. If, in the process of performing this 
function, the lender should place the FHA multifamily mortgage 
insurance portfolio at risk, HUD must have (1) an accelerated process 
for review of the lender's actions, and (2) the means to act 
expeditiously to correct violations. This accelerated review process 
and mechanism for HUD action is referred to as ``MAP Lender Quality 
Assurance Enforcement.'' On December 17, 2004 (69 FR 75812), HUD 
published a proposed rule to include in a new subpart Y of 24 CFR part 
200, consisting of Sec. Sec.  200.1500 through 200.1545, the 
requirements and procedures that constitute MAP Lender Quality 
Assurance Enforcement.
    The December 17, 2004, proposed rule included provisions that 
addressed the procedures of the MAP Lender Review Board; lender 
notification; issuance of MAP warning letters; placement of a lender on 
MAP probation; suspension or termination of MAP privileges; negotiated 
settlement agreements between HUD and MAP lenders; and a MAP appeals 
process. A comment period of 60 days was provided in the proposed rule, 
which also specifically sought comment on whether there are any 
quantitative measures, such as a lender's frequency or severity of 
claims, that may serve as a basis for MAP sanctions.

II. This Final Rule

    HUD did not receive any public comments on the proposed rule and 
this final rule makes no changes to the December 17, 2004, proposed 
rule.

III. Findings and Certifications

Unfunded Mandates Reform Act

    Title II of the Unfunded Mandates Reform Act of 1995 (2 U.S.C. 
1531-1538) (UMRA) establishes requirements for federal agencies to 
assess the effects of their regulatory actions on state, local, and 
tribal governments and the private sector. This rule does not impose 
any Federal mandates on any state, local, or tribal government or the 
private sector within the meaning of UMRA.

Executive Order 13132, Federalism

    Executive Order 13132 (entitled ``Federalism'') prohibits, to the 
extent practicable and permitted by law, an agency from promulgating a 
regulation that has federalism implications and either imposes 
substantial direct compliance costs on state and local governments and 
is not required by statute, or preempts state law, unless the relevant 
requirements of section 6 of the executive order are met. This rule 
does not have federalism implications and does not impose substantial 
direct compliance costs on state and local governments or preempt state 
law within the meaning of the executive order.

Impact on Small Entities

    The Secretary, in accordance with the Regulatory Flexibility Act (5 
U.S.C. 605(b)), has reviewed and approved this rule and in so doing 
certifies that this rule will not have a significant economic impact on 
a substantial number of small entities for the following reasons. The 
rule provides clear, uniform, expeditious, and equitable requirements 
and procedures to permit HUD to take enforcement actions, correct MAP 
violations, and protect the financial interests of the government. As 
such, the rule results in an industry-wide and governmental benefit in 
that it clarifies the terms of the relationship between HUD and MAP 
lenders.

Environmental Impact

    This rule does not direct, provide for assistance or loan or 
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. Accordingly, under 24 CFR 50.19(c)(1), this rule 
is categorically excluded from environmental review under the National 
Environmental Policy Act of 1969 (42 U.S.C. 4321).

Catalog of Federal Domestic Assistance

    The Catalog of Federal Domestic Assistance number applicable to the 
program affected by this rule is 14.134.

List of Subjects in 24 CFR Part 200

    Administrative practice and procedure, Claims, Equal employment 
opportunity, Fair housing, Home improvement, Housing standards, 
Incorporation by reference, 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.


0
Accordingly, HUD amends 24 CFR part 200 as follows:

PART 200--INTRODUCTION TO FHA PROGRAMS

0
1. The authority citation for 24 CFR part 200 continues to read as 
follows:

    Authority: 12 U.S.C. 1702-1715z-21; 42 U.S.C. 3535(d).


0
2. A new subpart Y is added to read as follows:

Subpart Y--Multifamily Accelerated Processing (MAP): MAP Lender 
Quality Assurance Enforcement

Sec.
200.1500 Sanctions against a MAP lender.

[[Page 43243]]

200.1505 Warning letter.
200.1510 Probation.
200.1515 Suspension of MAP privileges.
200.1520 Termination of MAP privileges.
200.1525 Settlement agreements.
200.1530 Bases for sanctioning a MAP lender.
200.1535 MAP Lender Review Board.
200.1540 Imminent harm notice of action.
200.1545 Appeals of MAP Lender Review Board decisions.


Sec.  200.1500  Sanctions against a MAP lender.

    (a) In addition to any other legal remedy available to HUD, HUD may 
take the following actions with respect to a MAP lender:
    (1) Warning letter;
    (2) Probation;
    (3) Suspension;
    (4) Termination;
    (5) Limited Denial of Participation (LDP);
    (6) Referral to the Mortgagee Review Board; and
    (7) Referral to the Office of Inspector General.
    (b) The actions listed in paragraphs (a)(1) through (a)(4) of this 
section are carried out in accordance with the requirements of this 
subpart. An LDP is a sanction applied in accordance with subpart G of 
24 CFR part 24 to participants in loan transactions other than FHA-
insured lenders. The Mortgagee Review Board procedures are found at 24 
CFR part 25.


Sec.  200.1505  Warning letter.

    (a) In general. HUD may issue a warning letter, which specifies 
problems or violations identified by HUD, to a MAP lender.
    (b) Effect of warning letter. The warning letter:
    (1) Does not suspend a lender's MAP privileges;
    (2) May impose a higher level of review of the lender's 
underwriting by HUD;
    (3) May direct the taking of a corrective action; and
    (4) May require a meeting in a designated HUD office with the 
principal owners or officers, or both, of the MAP lender to discuss the 
specified problems and violations, and possible corrective actions.
    (c) Relationship to other sanctions. The issuance of a warning 
letter is not subject to the MAP Lender Review Board procedures in 
accordance with Sec.  200.1535, and is not a prerequisite to the 
probation, or suspension, or termination of MAP privileges.


Sec.  200.1510  Probation.

    (a) In general. Only the MAP Lender Review Board (or Board) may 
place a lender on probation, in accordance with the procedures of Sec.  
200.1535.
    (b) Effect of probation. (1) Probation is intended to be corrective 
in nature and not punitive. As a result, release from probation is 
conditioned upon the lender meeting a specific requirement or 
requirements, such as replacement of a staff member. A lender's failure 
to take prompt corrective action after being placed on probation may be 
the basis for a recommendation of either suspension or termination. Any 
such recommendation shall, when possible, go to a MAP Lender Review 
Board composed of the same members who issued the original probation.
    (2) During the probation period, a MAP lender:
    (i) Shall be removed from the MAP-Approved Lender list posted on 
HUD's website;
    (ii) May not submit, and HUD may not accept, materials after the 
close of business of the date of the probation letter for a new 
application under MAP for multifamily mortgage insurance from HUD; and
    (iii) May continue to process any existing application for 
multifamily mortgage insurance submitted to a Multifamily Hub or 
Program Center before the date of the probation letter.
    (3) The MAP Lender Review Board may impose a higher level of review 
of the lender's underwriting by HUD;
    (4) Probation is nationwide in effect.
    (c) Duration of probation. (1) Probation continues until all 
specific corrective actions required by the MAP Lender Review Board 
(for example, exclusion of a specific staff member from work on MAP 
loans) are taken by the MAP lender. When all corrective actions have 
been taken, the MAP lender shall notify the Board. Once the Board is 
satisfied that the corrective actions have occurred, the probation 
period shall end.
    (2) A false statement that corrective action has been taken 
constitutes a false certification and may constitute a violation of 18 
US.C. 1001.
    (3) When probation is lifted, the lender's name shall be promptly 
reinstated on the MAP-Approved Lender list posted on HUD's Web site.


Sec.  200.1515  Suspension of MAP privileges.

    (a) In general. Only the MAP Lender Review Board may suspend a 
lender's eligibility for MAP, in accordance with the procedures of 
Sec.  200.1535.
    (b) Effect of suspension. (1) A suspension may impose any 
conditions that may be imposed by probation.
    (2) During the suspension period a MAP lender:
    (i) Shall be removed from the MAP-approved lender list posted on 
HUD's Web site;
    (ii) May not submit, and the HUD field office may not accept, 
materials after the close of business of the date of the suspension 
letter for a new application for multifamily mortgage insurance from 
HUD; and
    (iii) May continue to process any existing application for 
multifamily mortgage insurance submitted to a Multifamily Hub or 
Program Center before the date of the suspension letter.
    (3) The MAP Lender Review Board may impose a higher level of review 
of the lender's underwriting by HUD;
    (4) Suspension is nationwide in effect.
    (c) Duration of suspension. (1) Suspension may not exceed 12 
months, except where conditions are imposed. If both a time period and 
conditions are imposed, a suspension shall terminate only when:
    (i) The time period of the suspension has expired;
    (ii) The MAP lender has submitted a certification of compliance 
with those conditions to the Board; and
    (iii) The Board has notified the MAP lender it has received the 
certification of compliance and is satisfied that the corrective 
actions have occurred.
    (2) When suspension is lifted, the lender's name shall be promptly 
reinstated on the MAP-Approved Lender list posted on HUD's Web site.


Sec.  200.1520  Termination of MAP privileges.

    (a) In general. Except as provided in paragraph (b) of this 
section, only the MAP Lender Review Board may terminate a lender's MAP 
privileges, in accordance with the procedures of Sec.  200.1535.
    (b) Administrative termination. HUD will notify a lender of 
immediate termination of MAP privileges when either of the following 
circumstances is present:
    (1) Failure by the MAP lender to maintain its status as an FHA-
approved lender; or
    (2) Failure by the MAP lender to maintain a minimum level of MAP 
lender activity, as evidenced by failure to submit either a pre-
application package or firm commitment application at least once every 
12 months.
    (c) Effect of termination. (1) The terminated lender shall be 
removed from the MAP-Approved Lender list on HUD's Web site.
    (2) A terminated lender may not submit, and the HUD field office 
may not accept, materials after the close of business of the date of 
the termination letter for new multifamily mortgage insurance from HUD.

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    (3) Any MAP pre-application or MAP application in process may no 
longer be processed under MAP by the terminated lender. The lender will 
either:
    (i) Immediately transfer the transaction to the traditional 
application processing (TAP) procedure. HUD will completely reprocess 
all stages of the transaction; or
    (ii) Immediately transfer the project to a new MAP lender. The new 
MAP lender must completely reprocess all stages of the transaction. At 
no time can the new MAP lender assign the pre-application, the firm 
application, the mortgage insurance commitment, or the insured 
construction loan back to the original MAP lender.
    (4) HUD will not endorse any MAP loan processed by the terminated 
lender unless a firm commitment was issued before the date of 
termination.
    (i) Firm commitments involving new construction or substantial 
rehabilitation must be immediately transferred to a new MAP lender. At 
no time can the new MAP lender assign the firm mortgage insurance 
commitment, or the insured construction loan, back to the original MAP 
lender.
    (ii) Firm commitments issued for Section 223(f) projects may be 
transferred before final endorsement to any approved FHA lender or kept 
in the lender's portfolio.
    (iii) For those construction loans that have been initially 
endorsed, the MAP lender will lose its MAP privileges for construction 
loan administration. HUD will assume all the construction loan 
administration duties it normally performs for TAP processing.
    (iv) The original lender may service a transferred loan once it is 
finally endorsed.
    (5) Termination is nationwide in effect.
    (6) When a MAP lender loses its MAP lender status as a result of 
termination, the lender's status to process transactions using TAP is 
unaffected, provided that the lender has maintained its status as an 
FHA-approved multifamily lender.
    (d) Reinstatement. An application for reinstatement of MAP 
authority may not be made until at least 12 months after the date of 
termination. The requirements for reinstatement shall be the same as 
for initial qualification, and the applicant must show that the 
problems that led to termination have been resolved.


Sec.  200.1525  Settlement agreements.

    (a) HUD staff, as authorized, may negotiate a settlement agreement 
with a MAP lender before or after the issuance of a warning letter or 
referral to the MAP Lender Review Board. Once a matter has been 
referred to the MAP Lender Review Board, only the Board may approve a 
settlement agreement.
    (b) Settlement agreements may provide for:
    (1) Cessation of any violation;
    (2) Correction or mitigation of the effects of any violation;
    (3) Removal of lender staff from positions involving origination, 
underwriting, and/or construction loan administration;
    (4) Actions to collect sums of money wrongfully or incorrectly paid 
by the MAP lender to a third party;
    (5) Implementation or revision of a quality control plan or other 
corrective measure acceptable to HUD; and
    (6) Modification of the duration or provisions of any 
administrative sanction deemed to be appropriate by HUD.
    (c) A MAP lender's compliance with a settlement agreement is 
evidenced by the lender certifying its compliance with the conditions 
of the agreement, and HUD's determination that the lender is in 
compliance with the conditions of the agreement.
    (d) Failure by a MAP lender to comply with a settlement agreement 
may result in a probation, or suspension, or termination of MAP 
privileges, or referral to the Mortgagee Review Board.


Sec.  200.1530  Bases for sanctioning a MAP lender.

    It is HUD policy that approved MAP lenders are expected to comply 
at all times with HUD's underwriting and construction loan 
administration requirements and not to take any action that presents a 
risk to HUD's insurance funds. A MAP lender's improper underwriting and 
construction loan administration activities may lead to a warning 
letter or other sanction from HUD. Examples of such activities include, 
but are not limited to, the following:
    (a) Minor offenses that may be the basis for a warning letter 
include:
    (1) Failure to provide required exhibits or the submission of 
incomplete or inaccurate exhibits. Although the MAP lender will be 
permitted to correct minor errors or provide additional information, 
substantial inaccuracies or lack of significant information will result 
in a return of the application and retention of any fee collected;
    (2) Repeated failure to complete processing to firm commitment 
unrelated to an underwriting analysis that demonstrates that the 
process should not proceed to firm commitment;
    (3) Preparation of an underwriting summary that is not supported by 
the appropriate documentation and analysis;
    (4) Failure to notify the HUD processing office promptly of changes 
in the mortgage loan application for a firm commitment submitted, such 
as changes in rents, numbers of units, or gross project area;
    (5) Failure to meet MAP closing requirements or construction loan 
administration requirements;
    (6) Business practices that do not conform to those generally 
accepted by prudent lenders or that show irresponsibility; and
    (7) Failure to cooperate with a Lender Qualifications and 
Monitoring Division review by HUD.
    (b) Serious offenses that might be a basis for a warning letter or 
probation, suspension, or termination include:
    (1) Receipt of multiple warning letters over any one-year period. 
In determining which sanction to pursue as a result of prior warning 
letters, HUD will consider the facts and circumstances surrounding 
those warning letters and the corrective actions, if any, undertaken by 
the lender;
    (2) Fraud or material misrepresentation in the lender's 
participation in FHA multifamily programs;
    (3) Lender collusion with, or influence upon, third party 
contractors to modify reports affecting the contractor's independent 
evaluation;
    (4) A violation of MAP procedures by a third party contractor, 
which the MAP lender knew, or should have known, was occurring and 
which, if performed by the MAP lender itself, would constitute a ground 
for a sanction under this chapter;
    (5) Evidence that a lender's inadequate or inaccurate underwriting 
was a cause for assignment of an FHA-insured mortgage and claim for 
insurance benefits to HUD;
    (6) Identity-of-interest violations as defined by Chapter 2 of the 
MAP Guide;
    (7) Payment by, or receipt of a payment by, a MAP lender of any 
kickback or other consideration, directly or indirectly, which would 
affect the lender's independent evaluation, or represent a conflict of 
interest, in connection with any FHA-insured mortgage transaction;
    (8) Failure to comply with any agreement, certification, 
undertaking, or condition of approval listed in a MAP lender's 
application for approval;
    (9) Noncompliance with any requirement or directive of the MAP 
Lender Review Board;

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    (10) Violation of the requirements of any contract with HUD, or 
violation of the requirements in any statute or regulation;
    (11) Submission of false information, or a false certification, to 
HUD in connection with any MAP mortgage transaction;
    (12) Failure of a MAP lender to respond in a timely manner to 
inquiries from the MAP Lender Review Board in accordance with this 
subpart;
    (13) Indictment or conviction of a MAP lender or any of its 
officers, directors, principals, or employees for an offense that 
reflects on the responsibility, integrity, or ability of the lender to 
participate in the MAP initiative;
    (14) Employing or retaining an officer, partner, director, or 
principal at the time when the person was suspended, debarred, 
ineligible, or subject to an LDP under 24 CFR part 24, or otherwise 
prohibited from participation in HUD programs, when the MAP lender knew 
or should have known of the prohibition;
    (15) Employing or retaining an employee who is not an officer, 
partner, director or principal, and who is or will be working on HUD-
FHA program matters, at a time when that person was suspended, 
debarred, ineligible, or subject to an LDP under 24 CFR part 24 or 
otherwise prohibited from participation in HUD programs, when the MAP 
lender knew or should have known of the prohibition;
    (16) Failure to cooperate with an audit or investigation by the HUD 
Office of Inspector General or an inquiry by HUD into the conduct of 
the MAP lender's FHA-insured loans; and
    (17) Failure to fund MAP mortgage loans or any misuse of mortgage 
loan proceeds.


Sec.  200.1535  MAP Lender Review Board.

    (a) Authority. (1) Sanctions. The MAP Lender Review Board (or 
Board) is authorized to impose appropriate sanctions on a MAP lender 
after:
    (i) Conducting an impartial review of all information and 
documentation submitted to the Board; and
    (ii) Making factual determinations that there has been a violation 
of MAP requirements.
    (2) Settlement agreements. The Board is authorized to approve 
settlement agreements in accordance with Sec.  200.1525 of any matter 
pending before the Board.
    (3) Extensions. The Board is authorized to extend, on its own 
initiative or for good cause at the written request of a MAP lender, 
any time limit otherwise applicable under this section. Notice of any 
such extension shall be timely provided to a MAP lender.
    (b) Notice of violation. Before the Board reviews a matter for 
consideration of a sanction, the Board's Chairman will issue written 
notice of violation to the MAP lender's contact person as listed on the 
Multifamily MAP Web site. The notice is sent by overnight delivery and 
must be signed for by an employee of the MAP lender upon receipt. The 
notice:
    (1) Informs the lender that the Board is considering a specific 
violation;
    (2) States the specific facts alleged concerning the violation, 
with citation to the HUD requirements that have been violated;
    (3) Includes as attachments copies of all documents evidencing the 
violation and upon which the Board will rely in reaching a decision;
    (4) Provides the lender with the opportunity to request in writing, 
within 15 business days after the date of the issuance of the notice, 
to:
    (i) Meet for an informal conference with the Board in person or by 
video conference using HUD facilities at Headquarters or one of HUD's 
field offices; and
    (ii) Present written evidence and any other relevant information at 
the conference;
    (5) Requires a written response to be submitted to the Board by a 
date specified within the notice;
    (6) Provides the street address, email address, or facsimile (FAX) 
number for purposes of receiving the lender's request for an informal 
conference and written response; and
    (7) Is made part of the administrative record of the Board's 
decision of the matter.
    (c) Response to notice. (1) The MAP lender's written response 
required by the notice of violation may not exceed 15 double-spaced 
typewritten pages and must include an executive summary, a statement of 
the facts, an argument, and a conclusion. The response and supporting 
documentation must be submitted in triplicate.
    (2) Failure to respond by the dates specified within the notice may 
result in a determination by the Board without conducting an informal 
conference with the MAP lender and without consideration of any written 
response submitted by the MAP lender.
    (d) Informal conference. (1) The Board will schedule an informal 
conference and notify the lender of the time and place of the 
conference, if one is requested.
    (2) At the conference, the Board will meet with the lender or its 
designees and HUD staff to review documentary evidence and 
presentations by both sides.
    (3) Oral statements made at the informal meeting will not be 
considered as part of the administrative record of the Board's 
determination, except:
    (i) The Board may note for the record and consider voluntary 
admissions, made by the lender or a representative of the lender, of 
any element of the violation charged;
    (ii) Statements substantiated by any additional documents or 
evidence submitted in accordance with paragraphs (e)(1) or (e)(3) of 
this section; and
    (iii) Transcripts prepared and submitted in accordance with 
paragraph (e)(2) of this section.
    (e) Post-conference submissions. (1) Any additional documents, 
evidence, or written arguments relevant to the notice of violation and 
the informal conference that the lender or HUD staff wish to present to 
the Board, must be presented within five business days after date of 
the informal conference.
    (2) No transcript of the informal conference will be made, unless 
the lender elects to have a transcript made by a certified court 
reporter at its own expense. If the lender elects to have a transcript 
made, the lender must provide three copies of the transcript to HUD 
within five business days after the date of the informal conference. 
The transcript will not become a part of the administrative record of 
the Board's decision unless it is submitted within the required five-
day period frame.
    (3) Following the receipt of any post-conference submissions, the 
Board may request or permit additional documents or evidence to be 
submitted within a period set by the Board for inclusion in the 
administrative record.
    (f) Board action. (1) The Board will confer to consider the 
evidence included in the administrative record and make a final 
decision concerning the matter. Any record of confidential 
communications between and among Board members at this stage of the 
proceedings is privileged from disclosure and will not be regarded as a 
part of the administrative record of any matter.
    (2) In determining what action is appropriate concerning the 
matter, the Board considers, among other factors:
    (i) The seriousness and the extent of the violation;
    (ii) Any history of prior offenses;
    (iii) Deterrence of future violations;
    (iv) Any inappropriate benefits received by the MAP lender;
    (v) Potential inappropriate benefit to other persons; and

[[Page 43246]]

    (vi) Any mitigating factors.
    (3) Board decisions will be determined by majority vote.
    (g) Notice of action. (1) The Board will issue its final decision 
within 10 business days after the date of the informal conference or 
the expiration of any period allowed for the submission of documents 
and evidence, whichever is later.
    (2) The Board will notify the MAP lender of its final decision by 
overnight delivery of a written notice of the final decision to the MAP 
lender's contact person as listed on the Multifamily MAP Web site. The 
Board will also notify HUD field offices of its final decision.
    (3) The final decision finds that a violation either does, or does 
not, exist. If a violation is found to exist, the final decision:
    (i) States the violation and any factual findings of the Board;
    (ii) States the nature and duration of the sanction;
    (iii) Informs the MAP lender of its right to an appeal conference 
and identifies the appeals official to be contacted; and
    (iv) May add to or modify the violation as stated in the initial 
notice of violation.


Sec.  200.1540  Imminent harm notice of action.

    The Board may issue an imminent harm notice of action to terminate 
a MAP lender, or to place a MAP lender on probation or suspension 
without advance notice to the MAP lender in those instances where the 
Board determines there exists a need to protect the financial interest 
of HUD from imminent harm. In all such instances, the Board shall 
notify the lender of the Board's decision promptly and give the reasons 
for the decision in accordance with Sec.  200.1535(g)(2) and (3). The 
lender shall have the right to submit materials to the Board and to 
appear before the Board to seek prompt reconsideration of the Board's 
decision in accordance with the procedures of Sec.  200.1535.


Sec.  200.1545  Appeals of MAP Lender Review Board decisions.

    (a) Request for appeal. Whenever the Board imposes a sanction of 
probation, suspension, or termination against a MAP lender, the lender 
may request, in writing, an appeal conference before the appeals 
official. The MAP lender must deliver the written request for an appeal 
to the appeals official within 10 business days after the date noted on 
the notice of action or the right to an appeal is deemed waived. 
Participation in the appeal process under this section is not a 
prerequisite to filing an action for judicial review under the 
Administrative Procedure Act.
    (b) Appeals Official. The appeals official must be an individual 
who has not been previously involved with the proceedings or settlement 
discussions at issue.
    (c) Notice of action in effect. The notice of action issued by the 
Board remains in effect while the appeal is pending.
    (d) Scheduling of appeal. (1) Upon receipt of the request for an 
appeal, the appeals official will promptly notify the MAP lender of the 
time and place of the appeal conference. The appeal conference will be 
held within 10 business days after receipt of the MAP lender's appeal 
request, except as provided in paragraph (d)(2) of this section.
    (2) A MAP lender may request, and the appeals official may agree, 
to have an appeal conference held more than 10, but not more than 30 
business days after the date of the lender's request for an appeal.
    (e) Scope of appeal. The appeals official may consider information 
included in the administrative record and any new information presented 
at the appeal conference that is substantiated in accordance with 
paragraph (f) of this section. In addition, the appeals official may 
consider voluntary admissions by the lender or a representative of the 
lender of any element of the violation charged.
    (f) Additional documents. (1) Transcript. No transcript of the 
appeal conference will be made, unless the MAP lender elects to have a 
transcript made by a certified court reporter at its own expense. If 
the lender elects to have a transcript made, it must provide three 
copies of the transcript to the appeals official within five business 
days after the date of the appeal conference.
    (2) Other documents. Any additional, relevant documents or written 
arguments that the MAP lender wishes to present to the appeals official 
must be presented within five business days after the date of the 
appeal conference.
    (g) Determination of appeal. Within 10 business days after the date 
of the appeal conference or the expiration of the period allowed for 
the submission of documents and written arguments, whichever is later, 
the appeals official will make a written determination to confirm, 
modify, or overturn the Board's decision and notice of action. If the 
appeals official overturns the Board's decision, the lender shall 
immediately return to an active status as a MAP lender and the written 
determination to overturn will be posted on HUD's MAP Web site.

    Dated: July 19, 2005.
Brian D. Montgomery,
Assistant Secretary for Housing-Federal Housing Commissioner.
[FR Doc. 05-14744 Filed 7-25-05; 8:45 am]
BILLING CODE 4210-27-P