Implementation of The Privacy Act of 1974, as Amended; Amendment to Existing Systems of Records, Computerized Homes Underwriting Management System-Development of New System of Records, Loan Application Management System, 62656-62658 [2014-24861]

Agencies

• DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

[Federal Register Volume 79, Number 202 (Monday, October 20, 2014)]
[Notices]
[Pages 62656-62658]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-24861]


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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

[Docket No. FR-5763-N-10]


Implementation of The Privacy Act of 1974, as Amended; Amendment 
to Existing Systems of Records, Computerized Homes Underwriting 
Management System--Development of New System of Records, Loan 
Application Management System

AGENCY: Office of the Chief Information Officer, HUD.

ACTION: Amendment/New Systems of Records.

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SUMMARY: HUD is amending the Computerized Homes Underwriting Management 
System (CHUMS) to reflect changes to the following sections, which 
involve lenders and program administrators of Federal Housing 
Administrations (FHA) Mortgage Insurance Programs: first time 
homebuyers, Home Equity Conversion Mortgages for home owners, 203(k) 
for the rehabilitation of existing properties, Veteran Affairs 
certified FHA loans, and other FHA mortgage insurance programs. The 
changes to the amended system of records are to the ``Purposes'' and 
``Routine Uses of Records Maintained in the System'' captions. 
Additionally, HUD proposes to provide notice of a new system, the Loan 
Application Management System (LAMS), which is expected to replace 
CHUMS. Both proposals reflect the present status of the information 
contained in the systems and new data sharing practices, as well as 
enhancements to improve program services. The existing scope, 
objectives, and business processes in place for this program remain 
unchanged. A more detailed description of the present system is 
contained in notice ``Purpose'' caption. This notice supersedes the 
previous notice published in the Federal Register for CHUMS on December 
28, 2010 at 73 FR 81635.

DATES: Effective Date: The proposed modification will be effective 
immediately, with the exception of the Department's proposal to create 
a new system and revise its routine uses, which will become effective 
30 days after publication of this notice, on November 19, 2014, unless 
comments are received that would result in a contrary determination.
    Comments Due Date: November 19, 2014.

ADDRESSES: Interested persons are invited to submit comments regarding 
this notice to the Rules Docket Clerk, Office of the General Counsel, 
Department of Housing and Urban Development, 451 Seventh Street SW., 
Room 10276, Washington, DC 20410-0500. Communication should refer to 
the above docket number and title. A copy of each communication 
submitted will be available for public inspection and copying between 
8:00 a.m. and 5:00 p.m. weekdays at the above address.

FOR FURTHER INFORMATION CONTACT: Donna Robinson-Staton, Chief Privacy 
Officer, 451 Seventh Street SW., Washington, DC 20410 (Attention: 
Capitol View Building, 4th Floor), telephone number: (202) 402-8073. 
[The above telephone number is not a toll free number.] A 
telecommunications device for hearing- and speech-impaired persons 
(TTY) is available by calling the Federal Information Relay Service's 
toll-free telephone number (800) 877-8339.

SUPPLEMENTARY INFORMATION: This system of records is maintained by 
HUD's Office of Single Family Housing and includes HUD employees', 
program participants', and business partners' personally identifiable 
information that is retrieved by a name or unique identifier. Hence, 
this system of records encompasses programs and services of the 
Department's data collection and management practices. Publication of 
this notice allows HUD to satisfy its reporting requirement and keep an 
up-to-date accounting of its system of records publications. The 
amended and new systems will incorporate Federal privacy requirements 
and HUD policy requirements. The Privacy Act provides certain 
safeguards for an individual against an invasion of personal privacy by 
requiring Federal agencies to protect records contained in an agency 
system of records from unauthorized disclosure, by ensuring that 
information is current and collected only for its intended use, and by 
providing adequate safeguards to prevent misuse of such information. 
Additionally, this demonstrates the Department's focus on industry best 
practices in protecting the personal privacy of the individuals covered 
by this system notification. This notice states the name and location 
of the record system, the authority for and manner of its operations, 
the categories of individuals that it covers, the type of records that 
it contains, the sources of the information for the records, the 
routine uses made of the records and the type of exemptions in place 
for the records. In addition, this notice includes the business address 
of the HUD officials who will inform interested persons of the 
procedures whereby they may gain access to and/or request amendments to 
records pertaining to them.
    This publication does meet the threshold requirements for a new and 
amended system and a report was submitted to the Office of Management 
and Budget (OMB), the Senate Committee on Homeland Security and 
Governmental Affairs, and the House Committee on Government Reform as 
instructed by Paragraph 4c of Appendix l to OMB Circular No. A-130, 
``Federal Agencies Responsibilities for Maintaining Records About 
Individuals,'' July 25, 1994 (59 FR 37914).

    Authority:  5 U.S.C. 552a; 88 Stat. 1896; 42 U.S.C. 3535(d).

    Dated: October 3, 2014.
Rafael C. Diaz,
Chief Information Officer.
SYSTEM OF RECORDS NO.:
HSNG.SF/HUP.02.

SYSTEM NAME:
    Computerized Homes Underwriting Management System (CHUMS)-F-17/Loan 
Application Management System (LAMS)--P292.

SYSTEM LOCATION:
    The HUD Data Center which houses CHUMS and LAMS is located at the

[[Page 62657]]

Hewlett Packard (HP) Facility at 2020 Union Carbide Drive, South 
Charleston, West Virginia 25303-2734. HP is the designated records 
management facility for LAMS and the Atlanta Federal Records Center at 
4712 Southpark Boulevard, Ellenwood, GA 30294 is the records management 
facility for CHUMS until LAMS is fully implemented. Additionally, HUD 
Headquarter staff and staff throughout the United States will or have 
access to CHUMS/LAMS through HUD's standard telecommunications network 
from desktop workstations, and access by HUD's business partners is 
granted via secure HTTPS through the HUD FHA Connection Portal. 
Internal and external HUD hosted locations are as follows: HUD 
headquarters building, 451 Seventh Street SW., Washington, DC 20410; 
the HUD owned and operated Field Offices and Home Ownership Centers 
\1\, located in Atlanta, Denver, Philadelphia and Santa Ana.
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    \1\ https://portal.hud.gov/hudportal/documents/huddoc?id=append2.pdf
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CATEGORIES OF INDIVIDUALS COVERED BY THE SYSTEM:
    Individuals who have obtained a mortgage insured under HUD/FHA's 
single family mortgage insurance programs and individuals who 
unsuccessfully applied for mortgage insured by FHA. Also, individuals 
involved in the HUD/FHA single-family underwriting process (builders, 
appraisers, inspectors, mortgagee staff underwriters) and HUD employees 
involved in the single family underwriting process (e.g., appraisers, 
mortgage credit examiners, architectural employees, receiving clerks, 
assignment clerks, commitment clerks, records clerks, and closing 
clerks).

CATEGORIES OF RECORDS IN THE SYSTEM:
    Automated files contain the following categories of records:
    Mortgagors (Borrowers): name, address, social security number or 
other identification number, racial/ethnic background (if disclosed), 
and details about the mortgage loan, including loan application 
documentation. This information is supplied by lenders during the 
mortgage application and underwriting process.
    Builders, Appraisers and Inspectors: name, address, social security 
number or other identification number, territory, workload, and 
minority data including racial/ethnic background, Minority Business 
Enterprise (MBE) Code, and sex, for statistical tracking purposes.
    Mortgagee (Lender) Staff Appraisers and Underwriters: social 
security number or other identification number, territory and workload 
of the individuals.
    HUD Employees: name and social security number or other identifying 
number of employees involved in the single family underwriting process. 
This includes, but is not limited to: Homeownership Center managers, 
staff appraisers, architectural employees, receiving clerks, assignment 
clerks, commitment clerks, records clerks, and closing clerks.
    Note: Certain records contained in this system which pertain to 
individuals contain principally proprietary information concerning sole 
proprietorships may also reflect personal information, however, only 
the records reflecting personal information are subject to the Privacy 
Act.

AUTHORITY FOR MAINTENANCE OF THE SYSTEM:
    Section 203, National Housing Act, Public Law 73-479. The 
information collection enables HUD/FHA to process applications for HUD 
mortgage insurance and respond to inquiries regarding applications and 
insured mortgages; 42 U.S.C. 3543--Sec. 3543. Social Security Numbers 
are collected to prevent fraud and abuse in Department of Housing and 
Urban Development programs (enacted as part of the Housing and 
Community Development Act of 1987).

PURPOSE(S):
    The Fair Housing Administration (FHA) Office of Single Family 
Housing intends to modify the Computerized Homes Underwriting 
Management System (CHUMS) and create a new routine use exception to 
permit the sharing of information to third party servicers to improve 
HUD's review and evaluation process for its mortgage insurance 
appraisal documentation. Additionally, a new Loan Application 
Management System (LAMS) is being developed to better assist FHA with 
its automated processing, analysis, and screening of the appraisal 
documentation. CHUMS supports FHA staff in the processing of appraisal 
documentation for single family mortgage insurance applications (From 
initial receipt through final endorsement). CHUMS processes loan 
applications for first time homebuyers, Home Equity Conversion 
Mortgages (HECM) for home owners, Section 203(k) for the rehabilitation 
of existing properties, Veteran Affairs (VA) Certified FHA loans and 
other FHA approved mortgage insurance programs. CHUMS also provides 
automated assistance in mortgage credit evaluation, and FHA's TOTAL 
Scorecard which is a standardized credit assessment tool. It supports 
the conditional commitment process from the Mortgagee's request for 
property appraisal through issuance of a conditional commitment, firm 
commitment, endorsement, and the automated production of the Mortgage 
Insurance Certificate.
    The new LAMS tool is being created to become the eventual 
replacement system for CHUMS. The existing functionality in CHUMS will 
be moved into LAMS in stages over the next five years. In its initial 
release, LAMS will enable HUD to start collecting case binder data into 
an industry-wide electronic format that is acceptable to the mortgage 
industry (Mortgage Industry Standard Maintenance Organization) data 
standards. The improved enhancements will allow HUD to screen out 
errors in the appraisal and endorsement process more proficiently. In 
the past, HUD has identified far too late in the appraisal and 
endorsement process when a loan was at risk or in danger of fraud. 
Implementing the new LAMS tool and new evaluation process will allow 
HUD to better evaluate errors in the appraisal and endorsement process, 
and avoid endorsing unqualified loans. FHA believes that having the 
mortgage insurance documentation evaluated earlier on in the process 
will over time have a tremendous impact on the performance of HUD's 
mortgage insurance programs. The existing HUD data collected on 
applications for single family mortgage insurance endorsements, 
includes electronic copies of mortgage documentation, along with the 
results of automated risk scoring and fraud validations, electronic 
copies of the lender submitted mortgage insurance appraisal records, 
the underlying data and metadata of documentation obtained in the 
application, underwriting, insuring and closing stages of the mortgage 
loan transaction will be used for risk management evaluation studies of 
the abovementioned mortgage insurance portfolios.

ROUTINE USES OF RECORDS MAINTAINED IN THE SYSTEM, INCLUDING CATEGORIES 
OF USERS AND THE PURPOSES OF SUCH USES.
    In addition to those disclosures generally permitted under 5 U.S.C. 
552a(b) of the Privacy Act other routine uses include:
    1. To other agencies; such as the Departments of Agriculture, 
Education and Veterans Affairs, and the Small Business Administration, 
for use of HUD's Credit Alert Interactive Voice Response System 
(CAIVRS) to prescreen applicants for loans or loans guaranteed

[[Page 62658]]

by the Federal Government to ascertain if the applicant is delinquent 
in paying a debt owed to or insured by the Government.
    2. To the Federal Bureau of investigations (FBI) for investigation 
of possible fraud revealed in the underwriting, insuring or monitoring 
process.
    3. To the Department of Justice for prosecutions of fraud revealed 
in underwriting, insuring or monitoring process.
    4. To the General Accounting Office (GAO) for audit purposes.
    5. To Financial institutions, computer software companies and other 
federal agencies (including the Federal Reserve) for automated 
underwriting, credit scoring and other risk management evaluation 
studies.
    6. To other federal agencies (including the Federal Reserve) for 
purposes of statistical research not involving personally identifiable 
information, to evaluate program effectiveness in meeting the 
Department of Housing and Urban Development (HUD) FHA's mission, and to 
inform policy makers on changes to effect program improvements.
    7. To the HUD Office of Policy Development and Research (PD&R) and 
its researchers for mortgage credit evaluations and statistical 
analysis.
    8. To contractors, grantees, experts, consultants, and the agents 
of thereof, and others performing or working on a contract, service, 
grant, cooperative agreement with HUD, when necessary to accomplish an 
agency function related to these system of records, limited to only 
those data elements considered relevant to accomplishing an agency 
function. Individuals provided information under this routine use is 
subject to the same Privacy Act requirements and limitations on 
disclosure as are applicable to HUD officers and employees.
    9. To contractors, experts, consultants with whom HUD has a 
contract, service agreement or other assignment of the Department, when 
necessary to utilize relevant data for purposes of testing new 
technology and systems designed to enhance program operations and 
performance.
    See also on HUD's privacy Web site, Appendix 1 \2\ for 
discretionary routine uses that may in certain cases be applicable to 
CHUMS and LAMS.
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    \2\ https://portal.hud.gov/hudportal/documents/huddoc?id=append1.pdf
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POLICIES AND PRACTICES FOR STORING, RETRIEVING, ACCESSING, RETAINING, 
AND DISPOSING OF RECORDS IN THE SYSTEM:
STORAGE:
    Records are stored on magnetic disc/drum. There are no paper 
records maintained by this system.

RETRIEVABILITY:
    Records are retrieved by case number, name, Social Security Number 
or other identification number.

SAFEGUARDS:
    Electronic records are maintained in secured areas, and access is 
limited to authorized personnel. No paper records are maintained that 
require safeguarding.

RETENTION AND DISPOSAL:
    Data is retained online for 13 months after the date of 
endorsement, or 13-18 months for non-endorsed cases, and then archived. 
The archived data can be retrieved upon request. In archive data, CHUMS 
and LAMS retain case data indefinitely. The Records Retention Schedule 
for CHUMS/F17 and LAMS/292 are listed in the HUD Records Disposition 
Schedules Handbook (2225.6) Appendix A--Single Family Home Mortgage 
Insurance Program Records.

SYSTEM MANAGER(S) AND ADDRESS:
    Director, Office of Single Family Program Development, Department 
of Housing and Urban Development, 451 Seventh Street SW., Washington, 
DC 20410.

NOTIFICATION AND RECORD ACCESS PROCEDURES:
    For information, assistance, or inquiries about the existence of 
records, contact the Chief Privacy Officer, Department of Housing and 
Urban Development, 451 Seventh Street SW., Room 4156, Washington, DC 
20410 (Attention: Capitol View Building, 4th Floor), telephone number: 
(202) 402-8073. Verification of your identity must include original 
signature and be notarized. Written request must include the full name, 
Social Security Number, date of birth, current address, and telephone 
number of the individual making the request.

CONTESTING RECORD PROCEDURES:
    The Department's rules for contesting contents of records and 
appealing initial denials appear in 24 CFR part 16. Additional 
assistance may be obtained by contacting: U.S. Department of Housing 
and Urban Development, Chief Privacy Officer, 451 Seventh Street SW., 
Washington, DC 20410 (Attention: Capitol View Building, 4th Floor), 
telephone number: (202) 402-8073 or the HUD Departmental Privacy 
Appeals Officers, Office of General Counsel, Department of Housing and 
Urban Development, 451 Seventh Street SW., Washington DC 20410.

RECORD SOURCE CATEGORIES:
    Mortgagors, appraisers, inspectors, builders, mortgagee staff 
appraisers, mortgagee staff underwriters, and HUD employees are the 
sources of data stored in the systems.

SYSTEMS EXEMPTED FROM CERTAIN PROVISIONS OF THE ACT:
    None.
[FR Doc. 2014-24861 Filed 10-17-14; 8:45 am]
BILLING CODE 4210-67-P