Federal Housing Administration (FHA): Standardizing Method of Payment for FHA Insurance Claims, 9253-9256 [2015-03457]
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Federal Register / Vol. 80, No. 34 / Friday, February 20, 2015 / Proposed Rules
(1) Determine the level of
organizational performance effort
needed to achieve the objectives of asset
management;
(2) Determine the performance gaps
between the existing level of
performance effort and the needed level
of performance effort; and
(3) Develop strategies to close the
identified organizational performance
gaps and define the period of time over
which the gap is to be closed.
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§ 515.019 Periodic evaluations of facilities
requiring repair or reconstruction due to
emergency events.
(a) A State DOT shall conduct a
statewide evaluation of the State’s
existing roads, highways, and bridges
eligible for funding under title 23,
United States Code, that have required
repair and reconstruction activities on
two or more occasions due to emergency
events, to determine if there are
reasonable alternatives to any of these
roads, highways, and bridges. The
evaluation shall consider the risk of
recurring damage and cost of future
repair under current and future
environmental conditions. For purposes
of this section, ‘‘emergency event’’
means a natural disaster or catastrophic
failure due to external causes resulting
in an emergency declared by the
Governor of the State or an emergency
or disaster declared by the President of
the United States.
(b) For purposes of this section,
reasonable alternatives include work
types that could achieve the following:
(1) Reduce the need for Federal funds
to be expended on emergency repair and
reconstruction activities;
(2) Better protect public safety and
health and the human and natural
environment; and
(3) Meet transportation needs as
described in the relevant and applicable
Federal, State, local, and tribal plans
and programs. Relevant and applicable
plans and programs include the LongRange Statewide Transportation Plan,
STIP, Metropolitan Transportation Plan,
and Transportation Improvement
Program that are developed under part
450 of this title.
(c) Not later than [date 2 years after
effective date of final rule], the State
DOT must complete the evaluation for
NHS highways and bridges and any
other assets included in the State DOT’s
asset management plan. The State DOT
must complete the evaluation for all
other roads, highways, and bridges
meeting the criteria for evaluation not
later than [date 4 years after effective
date of final rule], excluding federallyowned facilities. The State DOT shall
update the evaluation after every
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emergency event to the extent needed to
include facilities affected by the event.
The State will review and update the
evaluation at least every four years after
the initial evaluation. In establishing its
evaluation cycle, the State DOT should
consider how the evaluation can best
inform the State DOT’s preparation of
its asset management plan and STIP.
(d) The State DOT shall include in its
asset management plan developed
pursuant to §§ 515.007 and 515.009, a
summary of the evaluation for any
roads, highways, and bridges included
in the asset management plan. The
results of the evaluation of those assets,
including any update following an
emergency event, shall be addressed in
the asset management plan’s risk
analysis as provided in § 515.007(a)(6).
(e) The State DOT must make the
evaluation available to the FHWA upon
request.
[FR Doc. 2015–03167 Filed 2–19–15; 8:45 am]
BILLING CODE 4910–22–P
DEPARTMENT OF HOUSING AND
URBAN DEVELOPMENT
24 CFR Parts 203, 207, 220, 221, 232,
235, 236 and 241
[Docket No. FR–5805–P–01]
RIN 2502–AJ26
Federal Housing Administration (FHA):
Standardizing Method of Payment for
FHA Insurance Claims
Office of the Assistant
Secretary for Housing-Federal Housing
Commissioner, HUD.
ACTION: Proposed rule.
AGENCY:
This proposed rule is a costsavings measure to update HUD’s
regulations regarding the payment of
FHA insurance claims in debentures.
Section 520(a) of the National Housing
Act affords the Secretary discretion to
pay insurance claims in cash or
debentures. Although HUD has given
mortgagees the option to elect payment
of FHA insurance claims in debentures
in some sections of HUD’s regulations,
HUD has not paid an FHA insurance
claim under these regulations using
debentures in approximately 5 years.
This proposed rule would amend
applicable FHA regulations to bring
consistency in determining the method
of payment for FHA insurance claims.
DATES: Comment Due Date: April 21,
2015.
SUMMARY:
Interested persons are
invited to submit comments regarding
this proposed rule to the Regulations
ADDRESSES:
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9253
Division, Office of General Counsel,
Department of Housing and Urban
Development, 451 7th Street SW., Room
10276, Washington, DC 20410–0500.
Communications must refer to the above
docket number and title. There are two
methods for submitting public
comments. All submissions must refer
to the above docket number and title.
1. Submission of Comments by Mail.
Comments may be submitted by mail to
the Regulations Division, Office of
General Counsel, Department of
Housing and Urban Development, 451
7th Street SW., Room 10276,
Washington, DC 20410–0500.
2. Electronic Submission of
Comments. Interested persons may
submit comments electronically through
the Federal eRulemaking Portal at
www.regulations.gov. HUD strongly
encourages commenters to submit
comments electronically. Electronic
submission of comments allows the
commenter maximum time to prepare
and submit a comment, ensures timely
receipt by HUD, and enables HUD to
make them immediately available to the
public. Comments submitted
electronically through the
www.regulations.gov Web site can be
viewed by other commenters and
interested members of the public.
Commenters should follow the
instructions provided on that site to
submit comments electronically.
Note: To receive consideration as public
comments, comments must be submitted
through one of the two methods specified
above. Again, all submissions must refer to
the docket number and title of the rule.
No Facsimile Comments. Facsimile
(fax) comments are not acceptable.
Public Inspection of Public
Comments. HUD will make all properly
submitted comments and
communications available for public
inspection and copying between 8 a.m.
and 5 p.m. weekdays at the above
address. Due to security measures at the
HUD Headquarters building, you must
schedule an appointment in advance to
review the public comments by calling
the Regulations Division at 202–708–
3055 (this is not a toll-free number).
Individuals with speech or hearing
impairments may access this number
via TTY by calling the toll-free Federal
Relay Service at 800–877–8339. Copies
of all comments submitted are available
for inspection and downloading at
www.regulations.gov.
FOR FURTHER INFORMATION CONTACT: For
information about: HUD’s Single Family
Housing program, contact Ivery Himes,
Director, Office of Single Family Asset
Management, Office of Housing,
Department of Housing and Urban
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Federal Register / Vol. 80, No. 34 / Friday, February 20, 2015 / Proposed Rules
Development, 451 7th Street SW., Room
9172, Washington, DC, 20410; telephone
number 202–708–1672; HUD’s
Multifamily Housing program, contact
Sivert Ritchie, Multifamily Claims
Branch, Office of Housing, Department
of Housing and Urban Development,
451 7th Street SW., Room 6252,
Washington, DC 20410–8000; telephone
number 202–708–2510. The telephone
numbers listed above are not toll-free
numbers. Persons with hearing or
speech impairments may access these
numbers through TTY by calling the
toll-free Federal Relay Service at 800–
877–8339.
SUPPLEMENTARY INFORMATION:
I. Background
Prior to the Housing and Urban
Development Act of 1965, the Secretary
was required to pay insurance claims on
mortgages or loans insured under the
National Housing Act in debentures.
Section 215 of the Housing and Urban
Development Act of 1965 amended Title
V of the National Housing Act to add a
new section which authorized the
Secretary, in his discretion, to pay
insurance claims on mortgages or loans
insured under any section of the
National Housing Act in cash or
debentures.1
In some of FHA’s regulations in 24
CFR, subtitle B, chapter II, HUD has
discretionarily provided mortgagees
with the ability to request and receive
payment of an insurance claim on a loan
insured under the National Housing Act
in debentures. As a result of these
regulations, HUD has needed to
maintain an interagency agreement with
Treasury, which is the agency
responsible for issuing and servicing
debentures, costing HUD over $206,000
per year, despite the fact that there are
no current debentures being serviced by
Treasury for HUD, and HUD has not
paid an FHA insurance claim in
debentures in approximately 5 years.
II. This Proposed Rule
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HUD proposes to use the authority
provided in section 520(a) of the
National Housing Act to reflect the
Secretary’s discretion to pay FHA
insurance claims in cash or debentures.
This change will enable HUD, in the
future, to make a fiscally responsible
1 Section 520(a) of the National Housing Act (12
U.S.C. 1735d) states: ‘‘Notwithstanding any other
provision of this Act with respect to the payment
of insurance benefits, the Secretary is authorized, in
his discretion, to pay in cash or in debentures any
insurance claim or part thereof which is paid on or
after the date of the enactment of the Housing and
Urban Development Act of 1965 on a mortgage or
a loan which was insured under any section of this
Act either before or after such date.’’
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decision about maintaining the costly
interagency agreement with Treasury.
This rule proposes to amend the
following sections to bring consistency
in the payment of FHA insurance claims
among FHA programs: §§ 203.400,
203.476, 203.478, 207.259, 220.751,
220.822, 221.762, 232.885, 235.215,
236.265, 241.261, 241.885 and 241.1205.
As a result of these changes, § 220.760
will be eliminated because it will be
unnecessary.
III. Findings and Certifications
Regulatory Review—Executive Order
13563
Executive Order 13563 (Improving
Regulations and Regulatory Review)
directs executive agencies to analyze
regulations that are ‘‘outmoded,
ineffective, insufficient, or excessively
burdensome, and to modify, streamline,
expand, or repeal them in accordance
with what has been learned.’’ Executive
Order 13563 also directs that, where
relevant, feasible, and consistent with
regulatory objectives, and to the extent
permitted by law, agencies are to
identify and consider regulatory
approaches that reduce burdens and
maintain flexibility and freedom of
choice for the public.
The broader purposes of the reform to
FHA’s regulations regarding Secretarial
discretion of the type of FHA insurance
claim payment are to eliminate
unnecessary spending and bring
consistency regarding the payment of
insurance claims across all FHA
programs. As discussed in the preamble,
the interagency agreement with
Treasury costs HUD over $206,000 per
year, even though HUD currently does
not have any debentures for payment of
FHA insurance claims in circulation,
and has not made a payment in
debentures in approximately 5 years for
these insurance claims. In addition,
different FHA programs treat payment
of FHA insurance claims differently,
and this proposed rule will simplify the
regulations so that the authority to
determine the method of claim payment
always rests with the Secretary.
Regulatory Flexibility Act
The Regulatory Flexibility Act (RFA)
(5 U.S.C. 601 et seq.) generally requires
an agency to conduct a regulatory
flexibility analysis of any rule subject to
notice and comment rulemaking
requirements, unless the agency certifies
that the rule will not have a significant
economic impact on a substantial
number of small entities. This rule only
changes the party which has the
authority to determine the method of
payment of FHA single family,
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multifamily, and healthcare insurance
claims.
Accordingly, the undersigned certifies
that this rule will not have a significant
economic impact on a substantial
number of small entities.
Notwithstanding HUD’s determination
that this rule will not have a significant
effect on a substantial number of small
entities, HUD specifically invites
comments regarding any less
burdensome alternatives to this rule that
will meet HUD’s objectives as described
in the preamble to this rule.
Environmental Impact
The proposed rule does not direct,
provide for assistance or loan and
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 proposed
rule is categorically excluded from
environmental review under the
National Environmental Policy Act of
1969 (42 U.S.C. 4321).
Executive Order 13132, Federalism
Executive Order 13132 (entitled
‘‘Federalism’’) prohibits an agency from
publishing any rule that has federalism
implications if the rule either (i)
imposes substantial direct compliance
costs on state and local governments
and is not required by statute, or (ii)
preempts state law, unless the agency
meets the consultation and funding
requirements of section 6 of the
Executive order. This proposed rule
would not have federalism implications
and would not impose substantial direct
compliance costs on state and local
governments or preempt state law
within the meaning of the Executive
order.
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 on
the private sector. This proposed rule
would not impose any Federal mandates
on any state, local, or tribal
governments, or on the private sector,
within the meaning of the UMRA.
Catalog of Federal Domestic Assistance
The Catalog of Federal Domestic
Assistance number for Mortgage
Insurance-Housing in Older, Declining
Areas is 14.123; Mortgage Insurance-
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Rental Housing is 14.134; Mortgage
Insurance-Rental and Cooperative
Housing for Moderate Income Families
and Elderly, Market Interest Rate;
Mortgage Insurance-Rental Housing in
Urban Renewal Areas is 14.139;
Supplemental Loan InsuranceMultifamily Rental Housing is 14.151;
Mortgage Insurance for the Purchase or
Refinancing of Existing Multifamily
Housing Projects is 14.155.
Paperwork Reduction Act
This proposed rule reduces
information collection requirements
already submitted to the Office of
Management and Budget (OMB) under
the Paperwork Reduction Act of 1995
(44 U.S.C. 3501–3520). In accordance
with the Paperwork Reduction Act, an
agency may not conduct or sponsor, and
a person is not required to respond to,
a collection of information unless the
collection displays a currently valid
OMB control number.
24 CFR Part 236
Grant programs-housing and
community development, Low and
moderate income housing, Mortgage
insurance, Rent subsidies, Reporting
and recordkeeping requirements.
■
Authority: 12 U.S.C. 1701z–11(e),
1709(c)(1), 1713, 1715(b) and 1735d; 42
U.S.C. 3535(d).
Accordingly, for the reasons stated
above, HUD proposes to amend 24 CFR
parts 203, 207, 220, 221, 232, 235, 236,
and 241 as follows:
§ 207.259
PART 203—SINGLE FAMILY
MORTGAGE INSURANCE
1. The authority citation for part 203
is revised to read as follows:
■
24 CFR Part 203
■
Hawaiian Natives, Home
improvement, Indians-lands, Loan
programs-housing and community
development; Mortgage insurance;
Reporting and recordkeeping
requirements; Solar energy.
§ 203.400
24 CFR Part 220
Home improvement, Loan programshousing and community development,
Mortgage insurance, Reporting and
recordkeeping requirements, Urban
renewal.
24 CFR Part 221
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24 CFR Part 232
Fire prevention, Health facilities,
Loan programs-health, Loan programshousing and community development,
Mortgage insurance, Nursing homes,
Reporting and recordkeeping
requirements.
24 CFR Part 235
Condominiums, Cooperatives, Grant
programs-housing and community
development, Low and moderate
income housing, Mortgage insurance,
Reporting and recordkeeping
requirements.
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12:47 Feb 19, 2015
2. Revise § 203.400, to read as follows:
Method of payment.
(a) If the application for insurance
benefits is acceptable to the
Commissioner, payment of the
insurance claim shall be made in cash,
in debentures, or in a combination of
both, as determined by the
Commissioner either at, or prior to, the
time of payment.
(b) An insurance claim paid on a
mortgage insured under section 223(e)
of the National Housing Act shall be
paid in cash from the Special Risk
Insurance Fund.
■ 3. Revise § 203.476(g), to read as
follows:
§ 203.476
be filed.
Claim application and items to
*
Low and moderate income housing,
Mortgage insurance, Reporting and
recordkeeping requirements.
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PART 207—MULTIFAMILY HOUSING
MORTGAGE INSURANCE
Home improvement, Loan programshousing and community development,
Mortgage insurance, Reporting and
recordkeeping requirements, Solar
energy.
List of Subjects
Manufactured homes, Mortgage
insurance, Reporting and recordkeeping
requirements, Solar energy.
Commissioner either at, or prior to, the
time of payment.
*
*
*
*
*
24 CFR Part 241
Authority: 12 U.S.C. 1709, 1710, 1715b,
1715z–16, 1715u, 1717z–21 and 1735d; 15
U.S.C. 1639c; 42 U.S.C. 3535(d).
24 CFR Part 207
9255
*
*
*
*
(g) All property of the borrower held
by the lender or to which it is entitled
and, if the Commissioner elects to make
payments in debentures, all cash held
by the lender or to which it is entitled,
including deposits made for the account
of the borrower and which have not
been applied in reduction of the
principal loan indebtedness;
*
*
*
*
*
■ 4. Revise § 203.478(c), to read as
follows:
§ 203.478
Payment of insurance benefits.
*
*
*
*
*
(c) Method of payment. Payment of an
insurance claim shall be made in cash,
in debentures, or in a combination of
both, as determined by the
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5. The authority citation for part 207
is revised to read as follows:
6. Amend § 207.259 by revising
paragraph (a), to read as follows:
■
Insurance Benefits.
(a) Method of payment. (1) Upon
either an assignment of the mortgage to
the Commissioner or a conveyance of
the property to the Commissioner in
accordance with requirements in
§ 207.258, payment of an insurance
claim shall be made in cash, in
debentures, or in a combination of both,
as determined by the Commissioner
either at, or prior to, the time of
payment.
(2) An insurance claim paid on a
mortgage insured under section 223(e)
of the National Housing Act shall be
paid in cash from the Special Risk
Insurance Fund.
*
*
*
*
*
PART 220—MORTGAGE INSURANCE
AND INSURED IMPROVEMENT LOANS
FOR URBAN RENEWAL AND
CONCENTRATED DEVELOPMENT
7. The authority citation for part 220
is revised to read as follows:
■
Authority: 12 U.S.C. 1713, 1715b, 1715k
and 1735d; 42 U.S.C. 3535(d).
8. Revise § 220.751(a), to read as
follows:
■
§ 220.751
Cross-reference.
(a) All of the provisions of subpart B,
part 207 of this chapter, covering
mortgages insured under section 207 of
the National Housing Act, apply with
full force and effect to multifamily
project mortgages insured under section
220 of the National Housing Act, except
§ 207.256b Modification of mortgage
terms.
*
*
*
*
*
§ 220.760
■
[Removed]
9. Remove § 220.760.
§ 220.822
[Amended].
10. In § 220.822, remove and reserve
paragraph (b).
■
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Federal Register / Vol. 80, No. 34 / Friday, February 20, 2015 / Proposed Rules
PART 221—LOW COST AND
MODERATE INCOME MORTGAGE
INSURANCE—SAVINGS CLAUSE
PART 241—SUPPLEMENTARY
FINANCING FOR INSURED PROJECT
MORTGAGES
■
11. The authority citation for part 221
is revised to read as follows:
■
Authority: 12 U.S.C. 1715b, 1715l and
1735d; 42 U.S.C. 3535(d).
Authority: 12 U.S.C. 1715b, 1715z–6 and
1735d; 42 U.S.C. 3535(d).
§ 221.762
19. The authority citation for part 241
is revised to read as follows:
20. Revise § 241.261, to read as
follows:
■
[Amended].
12. In § 221.762, remove and reserve
paragraph (a).
§ 241.261
PART 232—MORTGAGE INSURANCE
FOR NURSING HOMES,
INTERMEDIATE CARE FACILITIES,
BOARD AND CARE HOMES, AND
ASSISTED LIVING FACILITIES
All of the provisions of § 207.259 of
this chapter relating to insurance
benefits shall apply to multifamily loans
insured under this subpart.
■ 21. Revise § 241.885(a), to read as
follows:
13. The authority citation for part 232
is revised to read as follows:
§ 241.885
■
■
Authority: 12 U.S.C. 1715b, 1715w, 1735d
and 1735f–19; 42 U.S.C. 3535(d).
14. Revise § 232.885(a), to read as
follows:
■
§ 232.885
Insurance benefits.
(a) Method of payment. Payment of an
insurance claim shall be made in cash,
in debentures, or in a combination of
both, as determined by the
Commissioner either at, or prior to, the
time of payment.
*
*
*
*
*
PART 235—MORTGAGE INSURANCE
AND ASSISTANCE PAYMENTS FOR
HOME OWNERSHIP AND PROJECT
REHABILITATION
15. The authority citation for part 235
is revised to read as follows:
■
Payment of insurance benefits.
Insurance benefits.
(a) Method of payment. Payment of
insurance claims shall be made in cash,
in debentures, or in a combination of
both, as determined by the
Commissioner either at, or prior to, the
time of payment.
*
*
*
*
*
■ 22. Revise § 241.1205, to read as
follows:
§ 241.1205
Payment of insurance benefits.
All the provisions of § 207.259 of this
chapter relating to insurance benefits
shall apply to an equity or acquisition
loan insured under subpart F of this
part.
Dated: January 15, 2015.
Biniam Gebre,
Acting Assistant Secretary for Housing—
Federal Housing Commissioner.
[FR Doc. 2015–03457 Filed 2–19–15; 8:45 am]
BILLING CODE 4210–67–P
Authority: 12 U.S.C. 1715b, 1715z and
1735d; 42 U.S.C. 3535(d).
DEPARTMENT OF THE INTERIOR
16. Revise § 235.215, to read as
follows:
■
§ 235.215
benefits.
Office of Surface Mining Reclamation
and Enforcement
Method of paying insurance
If the application for insurance
benefits is acceptable to the Secretary,
the insurance claim shall be paid in
cash, in debentures, or in a combination
of both, as determined by the
Commissioner either at, or prior to, the
time of payment.
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PART 236—MORTGAGE INSURANCE
AND INTEREST REDUCTION
PAYMENT FOR RENTAL PROJECTS
17. The authority citation for part 236
is revised to read as follows:
■
Authority: 12 U.S.C. 1715b, 1715z–1 and
1735d; 42 U.S.C. 3535(d).
§ 236.265
[Amended].
18. In § 236.265, remove and reserve
paragraph (a).
■
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17:35 Feb 19, 2015
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30 CFR Parts 816 and 817
[Docket ID: OSM–2014–0003; S1D1S
SS08011000 SX066A00067F 134S180110;
S2D2S SS08011000 SX066A00 33F
13XS501520]
Petition To Initiate Rulemaking; Use of
Explosives on Surface Coal Mining
Operations
Office of Surface Mining
Reclamation and Enforcement, Interior.
ACTION: Decision on petition for
rulemaking.
AGENCY:
We, the Office of Surface
Mining Reclamation and Enforcement
(OSMRE or OSM), are announcing our
final decision on a petition for
rulemaking that was submitted by
WildEarth Guardians. The petition
SUMMARY:
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requested that we revise our current
regulations to prohibit visible nitrogen
oxide clouds during blasting. The
Director has decided to grant the
petition in principle, and although we
do not intend to propose the specific
rule changes requested in the petition,
will instead initiate a rulemaking to
address this issue as discussed more
fully below.
DATES: February 20, 2015.
ADDRESSES: Copies of the petition and
other relevant materials comprising the
administrative record of this petition are
available for public review and copying
at the Office of Surface Mining
Reclamation and Enforcement,
Administrative Record, Room 252 SIB,
1951 Constitution Avenue NW.,
Washington, DC 20240.
FOR FURTHER INFORMATION CONTACT:
Joshua Rockwell, Division of Regulatory
Support, 1951 Constitution Ave. NW.,
Washington, DC 20240; Telephone:
202–208–2633; Email: jrockwell@
osmre.gov.
SUPPLEMENTARY INFORMATION:
Table of Contents
I. How does the petition process operate?
II. What is the substance of the petition?
III. What do our current regulations regarding
the use of explosives require?
IV. What comments did we receive and how
did we address them?
V. What is the Director’s decision?
VI. Procedural Matters and Determinations
I. How does the petition process
operate?
On April 18, 2014, we received a
petition from WildEarth Guardians
(petitioner) requesting that OSMRE
promulgate rules to prohibit the
production of visible nitrogen oxides
(NOX) emissions (including nitric oxide
and nitrogen dioxide) during blasting at
surface coal mining operations in order
to protect the health, welfare, and safety
of the public and of mine workers and
to prevent injury to persons. WildEarth
Guardians submitted this petition
pursuant to section 201(g) of the Surface
Mining Control and Reclamation Act of
1977 (SMCRA), 30 U.S.C. 1201(g),
which provides that any person may
petition the Director of OSMRE to
initiate a proceeding for the issuance,
amendment, or repeal of any regulation
adopted under SMCRA. OSMRE
adopted regulations at 30 CFR 700.12 to
implement this statutory provision.
In accordance with our regulation at
30 CFR 700.12(c), we determined that
WildEarth Guardians’ petition set forth
‘‘facts, technical justification and law’’
establishing a ‘‘reasonable basis’’ for
amending our regulations. Therefore, on
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]]>Agencies
[Federal Register Volume 80, Number 34 (Friday, February 20, 2015)]
[Proposed Rules]
[Pages 9253-9256]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2015-03457]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
24 CFR Parts 203, 207, 220, 221, 232, 235, 236 and 241
[Docket No. FR-5805-P-01]
RIN 2502-AJ26
Federal Housing Administration (FHA): Standardizing Method of
Payment for FHA Insurance Claims
AGENCY: Office of the Assistant Secretary for Housing-Federal Housing
Commissioner, HUD.
ACTION: Proposed rule.
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SUMMARY: This proposed rule is a cost-savings measure to update HUD's
regulations regarding the payment of FHA insurance claims in
debentures. Section 520(a) of the National Housing Act affords the
Secretary discretion to pay insurance claims in cash or debentures.
Although HUD has given mortgagees the option to elect payment of FHA
insurance claims in debentures in some sections of HUD's regulations,
HUD has not paid an FHA insurance claim under these regulations using
debentures in approximately 5 years. This proposed rule would amend
applicable FHA regulations to bring consistency in determining the
method of payment for FHA insurance claims.
DATES: Comment Due Date: April 21, 2015.
ADDRESSES: Interested persons are invited to submit comments regarding
this proposed rule to the Regulations Division, Office of General
Counsel, Department of Housing and Urban Development, 451 7th Street
SW., Room 10276, Washington, DC 20410-0500. Communications must refer
to the above docket number and title. There are two methods for
submitting public comments. All submissions must refer to the above
docket number and title.
1. Submission of Comments by Mail. Comments may be submitted by
mail to the Regulations Division, Office of General Counsel, Department
of Housing and Urban Development, 451 7th Street SW., Room 10276,
Washington, DC 20410-0500.
2. Electronic Submission of Comments. Interested persons may submit
comments electronically through the Federal eRulemaking Portal at
www.regulations.gov. HUD strongly encourages commenters to submit
comments electronically. Electronic submission of comments allows the
commenter maximum time to prepare and submit a comment, ensures timely
receipt by HUD, and enables HUD to make them immediately available to
the public. Comments submitted electronically through the
www.regulations.gov Web site can be viewed by other commenters and
interested members of the public. Commenters should follow the
instructions provided on that site to submit comments electronically.
Note: To receive consideration as public comments, comments must
be submitted through one of the two methods specified above. Again,
all submissions must refer to the docket number and title of the
rule.
No Facsimile Comments. Facsimile (fax) comments are not acceptable.
Public Inspection of Public Comments. HUD will make all properly
submitted comments and communications available for public inspection
and copying between 8 a.m. and 5 p.m. weekdays at the above address.
Due to security measures at the HUD Headquarters building, you must
schedule an appointment in advance to review the public comments by
calling the Regulations Division at 202-708-3055 (this is not a toll-
free number). Individuals with speech or hearing impairments may access
this number via TTY by calling the toll-free Federal Relay Service at
800-877-8339. Copies of all comments submitted are available for
inspection and downloading at www.regulations.gov.
FOR FURTHER INFORMATION CONTACT: For information about: HUD's Single
Family Housing program, contact Ivery Himes, Director, Office of Single
Family Asset Management, Office of Housing, Department of Housing and
Urban
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Development, 451 7th Street SW., Room 9172, Washington, DC, 20410;
telephone number 202-708-1672; HUD's Multifamily Housing program,
contact Sivert Ritchie, Multifamily Claims Branch, Office of Housing,
Department of Housing and Urban Development, 451 7th Street SW., Room
6252, Washington, DC 20410-8000; telephone number 202-708-2510. The
telephone numbers listed above are not toll-free numbers. Persons with
hearing or speech impairments may access these numbers through TTY by
calling the toll-free Federal Relay Service at 800-877-8339.
SUPPLEMENTARY INFORMATION:
I. Background
Prior to the Housing and Urban Development Act of 1965, the
Secretary was required to pay insurance claims on mortgages or loans
insured under the National Housing Act in debentures. Section 215 of
the Housing and Urban Development Act of 1965 amended Title V of the
National Housing Act to add a new section which authorized the
Secretary, in his discretion, to pay insurance claims on mortgages or
loans insured under any section of the National Housing Act in cash or
debentures.\1\
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\1\ Section 520(a) of the National Housing Act (12 U.S.C. 1735d)
states: ``Notwithstanding any other provision of this Act with
respect to the payment of insurance benefits, the Secretary is
authorized, in his discretion, to pay in cash or in debentures any
insurance claim or part thereof which is paid on or after the date
of the enactment of the Housing and Urban Development Act of 1965 on
a mortgage or a loan which was insured under any section of this Act
either before or after such date.''
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In some of FHA's regulations in 24 CFR, subtitle B, chapter II, HUD
has discretionarily provided mortgagees with the ability to request and
receive payment of an insurance claim on a loan insured under the
National Housing Act in debentures. As a result of these regulations,
HUD has needed to maintain an interagency agreement with Treasury,
which is the agency responsible for issuing and servicing debentures,
costing HUD over $206,000 per year, despite the fact that there are no
current debentures being serviced by Treasury for HUD, and HUD has not
paid an FHA insurance claim in debentures in approximately 5 years.
II. This Proposed Rule
HUD proposes to use the authority provided in section 520(a) of the
National Housing Act to reflect the Secretary's discretion to pay FHA
insurance claims in cash or debentures. This change will enable HUD, in
the future, to make a fiscally responsible decision about maintaining
the costly interagency agreement with Treasury.
This rule proposes to amend the following sections to bring
consistency in the payment of FHA insurance claims among FHA programs:
Sec. Sec. 203.400, 203.476, 203.478, 207.259, 220.751, 220.822,
221.762, 232.885, 235.215, 236.265, 241.261, 241.885 and 241.1205. As a
result of these changes, Sec. 220.760 will be eliminated because it
will be unnecessary.
III. Findings and Certifications
Regulatory Review--Executive Order 13563
Executive Order 13563 (Improving Regulations and Regulatory Review)
directs executive agencies to analyze regulations that are ``outmoded,
ineffective, insufficient, or excessively burdensome, and to modify,
streamline, expand, or repeal them in accordance with what has been
learned.'' Executive Order 13563 also directs that, where relevant,
feasible, and consistent with regulatory objectives, and to the extent
permitted by law, agencies are to identify and consider regulatory
approaches that reduce burdens and maintain flexibility and freedom of
choice for the public.
The broader purposes of the reform to FHA's regulations regarding
Secretarial discretion of the type of FHA insurance claim payment are
to eliminate unnecessary spending and bring consistency regarding the
payment of insurance claims across all FHA programs. As discussed in
the preamble, the interagency agreement with Treasury costs HUD over
$206,000 per year, even though HUD currently does not have any
debentures for payment of FHA insurance claims in circulation, and has
not made a payment in debentures in approximately 5 years for these
insurance claims. In addition, different FHA programs treat payment of
FHA insurance claims differently, and this proposed rule will simplify
the regulations so that the authority to determine the method of claim
payment always rests with the Secretary.
Regulatory Flexibility Act
The Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et seq.)
generally requires an agency to conduct a regulatory flexibility
analysis of any rule subject to notice and comment rulemaking
requirements, unless the agency certifies that the rule will not have a
significant economic impact on a substantial number of small entities.
This rule only changes the party which has the authority to determine
the method of payment of FHA single family, multifamily, and healthcare
insurance claims.
Accordingly, the undersigned certifies that this rule will not have
a significant economic impact on a substantial number of small
entities. Notwithstanding HUD's determination that this rule will not
have a significant effect on a substantial number of small entities,
HUD specifically invites comments regarding any less burdensome
alternatives to this rule that will meet HUD's objectives as described
in the preamble to this rule.
Environmental Impact
The proposed rule does not direct, provide for assistance or loan
and 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
proposed rule is categorically excluded from environmental review under
the National Environmental Policy Act of 1969 (42 U.S.C. 4321).
Executive Order 13132, Federalism
Executive Order 13132 (entitled ``Federalism'') prohibits an agency
from publishing any rule that has federalism implications if the rule
either (i) imposes substantial direct compliance costs on state and
local governments and is not required by statute, or (ii) preempts
state law, unless the agency meets the consultation and funding
requirements of section 6 of the Executive order. This proposed rule
would not have federalism implications and would not impose substantial
direct compliance costs on state and local governments or preempt state
law within the meaning of the Executive order.
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 on the private sector. This proposed rule would
not impose any Federal mandates on any state, local, or tribal
governments, or on the private sector, within the meaning of the UMRA.
Catalog of Federal Domestic Assistance
The Catalog of Federal Domestic Assistance number for Mortgage
Insurance-Housing in Older, Declining Areas is 14.123; Mortgage
Insurance-
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Rental Housing is 14.134; Mortgage Insurance-Rental and Cooperative
Housing for Moderate Income Families and Elderly, Market Interest Rate;
Mortgage Insurance-Rental Housing in Urban Renewal Areas is 14.139;
Supplemental Loan Insurance-Multifamily Rental Housing is 14.151;
Mortgage Insurance for the Purchase or Refinancing of Existing
Multifamily Housing Projects is 14.155.
Paperwork Reduction Act
This proposed rule reduces information collection requirements
already submitted to the Office of Management and Budget (OMB) under
the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520). In
accordance with the Paperwork Reduction Act, an agency may not conduct
or sponsor, and a person is not required to respond to, a collection of
information unless the collection displays a currently valid OMB
control number.
List of Subjects
24 CFR Part 203
Hawaiian Natives, Home improvement, Indians-lands, Loan programs-
housing and community development; Mortgage insurance; Reporting and
recordkeeping requirements; Solar energy.
24 CFR Part 207
Manufactured homes, Mortgage insurance, Reporting and recordkeeping
requirements, Solar energy.
24 CFR Part 220
Home improvement, Loan programs-housing and community development,
Mortgage insurance, Reporting and recordkeeping requirements, Urban
renewal.
24 CFR Part 221
Low and moderate income housing, Mortgage insurance, Reporting and
recordkeeping requirements.
24 CFR Part 232
Fire prevention, Health facilities, Loan programs-health, Loan
programs-housing and community development, Mortgage insurance, Nursing
homes, Reporting and recordkeeping requirements.
24 CFR Part 235
Condominiums, Cooperatives, Grant programs-housing and community
development, Low and moderate income housing, Mortgage insurance,
Reporting and recordkeeping requirements.
24 CFR Part 236
Grant programs-housing and community development, Low and moderate
income housing, Mortgage insurance, Rent subsidies, Reporting and
recordkeeping requirements.
24 CFR Part 241
Home improvement, Loan programs-housing and community development,
Mortgage insurance, Reporting and recordkeeping requirements, Solar
energy.
Accordingly, for the reasons stated above, HUD proposes to amend 24
CFR parts 203, 207, 220, 221, 232, 235, 236, and 241 as follows:
PART 203--SINGLE FAMILY MORTGAGE INSURANCE
0
1. The authority citation for part 203 is revised to read as follows:
Authority: 12 U.S.C. 1709, 1710, 1715b, 1715z-16, 1715u, 1717z-
21 and 1735d; 15 U.S.C. 1639c; 42 U.S.C. 3535(d).
0
2. Revise Sec. 203.400, to read as follows:
Sec. 203.400 Method of payment.
(a) If the application for insurance benefits is acceptable to the
Commissioner, payment of the insurance claim shall be made in cash, in
debentures, or in a combination of both, as determined by the
Commissioner either at, or prior to, the time of payment.
(b) An insurance claim paid on a mortgage insured under section
223(e) of the National Housing Act shall be paid in cash from the
Special Risk Insurance Fund.
0
3. Revise Sec. 203.476(g), to read as follows:
Sec. 203.476 Claim application and items to be filed.
* * * * *
(g) All property of the borrower held by the lender or to which it
is entitled and, if the Commissioner elects to make payments in
debentures, all cash held by the lender or to which it is entitled,
including deposits made for the account of the borrower and which have
not been applied in reduction of the principal loan indebtedness;
* * * * *
0
4. Revise Sec. 203.478(c), to read as follows:
Sec. 203.478 Payment of insurance benefits.
* * * * *
(c) Method of payment. Payment of an insurance claim shall be made
in cash, in debentures, or in a combination of both, as determined by
the Commissioner either at, or prior to, the time of payment.
* * * * *
PART 207--MULTIFAMILY HOUSING MORTGAGE INSURANCE
0
5. The authority citation for part 207 is revised to read as follows:
Authority: 12 U.S.C. 1701z-11(e), 1709(c)(1), 1713, 1715(b) and
1735d; 42 U.S.C. 3535(d).
0
6. Amend Sec. 207.259 by revising paragraph (a), to read as follows:
Sec. 207.259 Insurance Benefits.
(a) Method of payment. (1) Upon either an assignment of the
mortgage to the Commissioner or a conveyance of the property to the
Commissioner in accordance with requirements in Sec. 207.258, payment
of an insurance claim shall be made in cash, in debentures, or in a
combination of both, as determined by the Commissioner either at, or
prior to, the time of payment.
(2) An insurance claim paid on a mortgage insured under section
223(e) of the National Housing Act shall be paid in cash from the
Special Risk Insurance Fund.
* * * * *
PART 220--MORTGAGE INSURANCE AND INSURED IMPROVEMENT LOANS FOR
URBAN RENEWAL AND CONCENTRATED DEVELOPMENT
0
7. The authority citation for part 220 is revised to read as follows:
Authority: 12 U.S.C. 1713, 1715b, 1715k and 1735d; 42 U.S.C.
3535(d).
0
8. Revise Sec. 220.751(a), to read as follows:
Sec. 220.751 Cross-reference.
(a) All of the provisions of subpart B, part 207 of this chapter,
covering mortgages insured under section 207 of the National Housing
Act, apply with full force and effect to multifamily project mortgages
insured under section 220 of the National Housing Act, except Sec.
207.256b Modification of mortgage terms.
* * * * *
Sec. 220.760 [Removed]
0
9. Remove Sec. 220.760.
Sec. 220.822 [Amended].
0
10. In Sec. 220.822, remove and reserve paragraph (b).
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PART 221--LOW COST AND MODERATE INCOME MORTGAGE INSURANCE--SAVINGS
CLAUSE
0
11. The authority citation for part 221 is revised to read as follows:
Authority: 12 U.S.C. 1715b, 1715l and 1735d; 42 U.S.C. 3535(d).
Sec. 221.762 [Amended].
0
12. In Sec. 221.762, remove and reserve paragraph (a).
PART 232--MORTGAGE INSURANCE FOR NURSING HOMES, INTERMEDIATE CARE
FACILITIES, BOARD AND CARE HOMES, AND ASSISTED LIVING FACILITIES
0
13. The authority citation for part 232 is revised to read as follows:
Authority: 12 U.S.C. 1715b, 1715w, 1735d and 1735f-19; 42
U.S.C. 3535(d).
0
14. Revise Sec. 232.885(a), to read as follows:
Sec. 232.885 Insurance benefits.
(a) Method of payment. Payment of an insurance claim shall be made
in cash, in debentures, or in a combination of both, as determined by
the Commissioner either at, or prior to, the time of payment.
* * * * *
PART 235--MORTGAGE INSURANCE AND ASSISTANCE PAYMENTS FOR HOME
OWNERSHIP AND PROJECT REHABILITATION
0
15. The authority citation for part 235 is revised to read as follows:
Authority: 12 U.S.C. 1715b, 1715z and 1735d; 42 U.S.C.
3535(d).
0
16. Revise Sec. 235.215, to read as follows:
Sec. 235.215 Method of paying insurance benefits.
If the application for insurance benefits is acceptable to the
Secretary, the insurance claim shall be paid in cash, in debentures, or
in a combination of both, as determined by the Commissioner either at,
or prior to, the time of payment.
PART 236--MORTGAGE INSURANCE AND INTEREST REDUCTION PAYMENT FOR
RENTAL PROJECTS
0
17. The authority citation for part 236 is revised to read as follows:
Authority: 12 U.S.C. 1715b, 1715z-1 and 1735d; 42 U.S.C.
3535(d).
Sec. 236.265 [Amended].
0
18. In Sec. 236.265, remove and reserve paragraph (a).
PART 241--SUPPLEMENTARY FINANCING FOR INSURED PROJECT MORTGAGES
0
19. The authority citation for part 241 is revised to read as follows:
Authority: 12 U.S.C. 1715b, 1715z-6 and 1735d; 42 U.S.C.
3535(d).
0
20. Revise Sec. 241.261, to read as follows:
Sec. 241.261 Payment of insurance benefits.
All of the provisions of Sec. 207.259 of this chapter relating to
insurance benefits shall apply to multifamily loans insured under this
subpart.
0
21. Revise Sec. 241.885(a), to read as follows:
Sec. 241.885 Insurance benefits.
(a) Method of payment. Payment of insurance claims shall be made in
cash, in debentures, or in a combination of both, as determined by the
Commissioner either at, or prior to, the time of payment.
* * * * *
0
22. Revise Sec. 241.1205, to read as follows:
Sec. 241.1205 Payment of insurance benefits.
All the provisions of Sec. 207.259 of this chapter relating to
insurance benefits shall apply to an equity or acquisition loan insured
under subpart F of this part.
Dated: January 15, 2015.
Biniam Gebre,
Acting Assistant Secretary for Housing--Federal Housing Commissioner.
[FR Doc. 2015-03457 Filed 2-19-15; 8:45 am]
BILLING CODE 4210-67-P
