Federal Housing Administration (FHA): Strengthening the Home Equity Conversion Mortgage Program, 53095-53097 [2016-19255]

Download as PDF Federal Register / Vol. 81, No. 155 / Thursday, August 11, 2016 / Proposed Rules 53095 ‘‘Environmental Impacts: Policies and Procedures’’ prior to any FAA final regulatory action. within 2 miles each side of the 260° bearing from the airport extending from the 7.1-mile radius to 11.7 miles west of the airport. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT List of Subjects in 14 CFR Part 71 * 24 CFR Parts 30 and 206 Airspace, Incorporation by reference, Navigation (air). AGL WI E5 Accordingly, pursuant to the authority delegated to me, the Federal Aviation Administration proposes to amend 14 CFR part 71 as follows: PART 71—DESIGNATION OF CLASS A, B, C, D, AND E AIRSPACE AREAS; AIR TRAFFIC SERVICE ROUTES; AND REPORTING POINTS 1. The authority citation for 14 CFR part 71 continues to read as follows: ■ Authority: 49 U.S.C. 106(f), 106(g); 40103, 40113, 40120; E.O. 10854, 24 FR 9565, 3 CFR, 1959–1963 Comp., p. 389. [Amended] 2. The incorporation by reference in 14 CFR 71.1 of FAA Order 7400.9Z, Airspace Designations and Reporting Points, dated August 6, 2015, and effective September 15, 2015, is amended as follows: * * * * Cable Union, WI [Amended] AGENCY: * * AGL WI E5 * * Cumberland, WI [Amended] Cumberland Municipal Airport, WI (Lat. 45°30′22″ N., long. 91°58′51″ W.) That airspace extending upward from 700 feet above the surface within a 6.4-mile radius of Cumberland Municipal Airport, and within 2 miles each side of the 091° bearing from the airport extending from the 6.4-mile radius to 10.2 miles east of the airport, and within 2 miles each side of the 270° bearing from the airport extending from the 6.4-mile radius to 10.2 miles west of the airport. * * * * Eagle River, WI [Amended] Eagle River Union Airport, WI (Lat. 45°55′56″ N., long. 89°16′06″ W.) That airspace extending upward from 700 feet above the surface within a 6.5-mile radius of Eagle River Union Airport, and within 2 miles each side of the 225° bearing from the airport extending from the 6.5-mile radius to 9.2 miles southwest of the airport. * Wausau, WI [Removed] Paragraph 6005 Class E Airspace Areas Extending Upward From 700 Feet or More Above the Surface of the Earth. * * Sawyer County Airport, WI (Lat. 46°01′31″ N., long. 91°26′39″ W.) That airspace extending upward from 700 feet above the surface within a 6.6-mile radius of Sawyer County Airport, and within 2 miles each side of the 025° bearing from the airport extending from the 6.6-mile radius to 8.5 miles northeast of the airport. * * * * AGL WI E5 Ashland, WI [Amended] John F. Kennedy Memorial Airport, WI (Lat. 46°32′55″ N., long. 90°55′08″ W.) That airspace extending upward from 700 feet above the surface within a 7.0-mile radius of John F. Kennedy Memorial Airport, and within 2.9 miles each side of the 201° bearing from the airport extending from the 7.0-mile radius to 8.2 miles southwest of the airport. sradovich on DSK3GMQ082PROD with PROPOSALS * * * * AGL WI E5 Black River Falls, WI [Amended] Black River Falls Area Airport (Lat. 44°15′03″ N., long. 90°51′19″ W.) That airspace extending upward from 700 feet above the surface within a 7.1-mile radius of Black River Falls Area Airport, and within 2 miles each side of the 081° bearing from the airport extending from the 7.1-mile radius to 11.4 miles east of the airport, and VerDate Sep<11>2014 17:14 Aug 10, 2016 Jkt 238001 * * AGL WI E5 AGL WI E5 Antigo, WI [Amended] Langlade County Airport, WI (Lat. 45°09′14″ N., long. 89°06′38″ W.) That airspace extending upward from 700 feet above the surface within a 6.5-mile radius of Langlade County Airport. * [Docket No. FR–5353–N–02] RIN 2502–AI79 AGL WI E5 Paragraph 6002 Class E Airspace Designated as Surface Areas. AGL WI E2 * Cable Union Airport, WI (Lat. 46°11′42″ N., long. 91°14′54″ W.) That airspace extending upward from 700 feet above the surface within a 6.9-mile radius of Cable Union Airport. * ■ * * * The Proposed Amendment § 71.1 * * * * * Hayward, WI [Amended] * AGL WI E5 * * Wausau, WI [Amended] Wausau Downtown Airport, WI (Lat. 44°55′35″ N., long. 89°37′37″ W.) That airspace extending upward from 700 feet above the surface within a 6.8-mile radius of Wausau Downtown Airport. Issued in Fort Worth, Texas, on July 29, 2016. Walter Tweedy, Acting Manager, Operations Support Group, ATO Central Service Center. [FR Doc. 2016–18773 Filed 8–10–16; 8:45 am] BILLING CODE 4910–13–P PO 00000 Frm 00005 Fmt 4702 Sfmt 4702 Federal Housing Administration (FHA): Strengthening the Home Equity Conversion Mortgage Program Office of the Assistant Secretary for Housing—Federal Housing Commissioner, HUD. ACTION: Supplemental notice of proposed rulemaking. On May 19, 2016, HUD published in the Federal Register, a proposed rule that would codify several significant changes to FHA’s Home Equity Conversion Mortgage program that were previously issued under the authority granted to HUD in the Housing and Economic Recovery Act of 2008 and the Reverse Mortgage Stabilization Act of 2013, and to make additional regulatory changes. The Home Equity Conversion Mortgage program is FHA’s reverse mortgage program that enables seniors who have equity in their homes to withdraw a portion of the accumulated equity. The intent of the Home Equity Conversion Mortgage program is to ease the financial burden on elderly homeowners facing increased health, housing, and subsistence costs at a time of reduced income. This document opens the public comment period solely for the provision addressed in this document to address a suggested change offered during the public comment period for the proposed rule regarding the lender’s option to file a claim when the loan balance reaches 98 percent of the maximum claim amount. DATES: Comment Due Date: September 12, 2016. ADDRESSES: Interested persons are invited to submit comments regarding this notice 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 20410–0001. SUMMARY: E:\FR\FM\11AUP1.SGM 11AUP1 53096 Federal Register / Vol. 81, No. 155 / Thursday, August 11, 2016 / Proposed Rules 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 document. No Facsimile Comments. Facsimile (FAX) comments are not acceptable. sradovich on DSK3GMQ082PROD with PROPOSALS Public Inspection of Public Comments. All properly submitted comments and communications submitted to HUD will be 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, an advance appointment to review the public comments must be scheduled 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: Karin Hill, Senior Policy Advisor, Office of Single Family Housing, Department of Housing and Urban Development, 451 7th Street SW., Room 9282, Washington, DC 20410; telephone number 202–402–3084 (this is not a tollfree number). Individuals with speech or hearing impairments may access this number through TTY by calling the tollfree Federal Relay Service at 800–877– 8339. SUPPLEMENTARY INFORMATION: I. Background A. The HECM Program On May 19, 2016, at 81 FR 31769, HUD published a document that proposed to amend its regulations, at 24 CFR parts 30 and 206, that govern HUD’s reverse mortgage program, called the Home Equity Conversion Mortgage VerDate Sep<11>2014 17:14 Aug 10, 2016 Jkt 238001 (HECM) program. The HECM program allows eligible borrowers, 62 years of age or older, to convert the equity in their homes into liquid assets. The withdrawal of equity may take a variety of forms, as authorized by the National Housing Act (NHA) and selected by the borrower. The home, which serves as security for the FHA-insured mortgage, must be, and must continue to be, the borrower’s principal residence during the life of the borrower. For adjustable interest rate HECMs, equity payments to the borrower may be in the form of monthly disbursements for life or a fixed term of years, disbursements from a line of credit advance or a combination of monthly disbursements and a line of credit. For fixed interest rate HECMs, equity payments to the borrower must be in the form of a single lump sum disbursement at closing. The maximum amount of equity in the home that is available to a borrower under a HECM loan is the ‘‘principal limit’’ that is calculated for that loan. The borrower retains ownership of the property and may sell the home at any time keeping any residual sale proceeds in excess of the outstanding loan balance. Until the mortgage is repaid, and regardless of whether or not additional disbursements under the mortgage are permissible, interest on the mortgage, mortgage insurance premiums, and servicing charges, where applicable, continue to accrue. The subject of this document regards the mortgagee’s election of the assignment option as provided in § 206.107(a). This section gives the mortgagee an option, before the mortgage is submitted for insurance endorsement, to select either: (1) The assignment option, which allows the mortgagee to assign the HECM to the Secretary if the mortgage balance is equal to or greater than 98 percent of the maximum claim amount; or (2) the shared premium option, which allows the mortgagee to retain a portion of the monthly mortgage insurance premiums (MIP) but does not allow the mortgagee to assign the mortgage unless the mortgagee fails to make payments and the Secretary demands assignment. Under the assignment option, the mortgagee may only assign the mortgage to the Secretary if the following are also true: (1) The mortgagee is current in making the required payments to the mortgagor; (2) the mortgagee is current in making the required MIP payments to the Secretary; (3) the mortgage is not due and payable; and (4) the mortgage is a first lien of record and title to the property securing the mortgage is good and marketable. PO 00000 Frm 00006 Fmt 4702 Sfmt 4702 B. The Proposed Rule and the Public Comment The May 19, 2016, proposed rule proposed to codify a number of changes that had been implemented through mortgagee letters under the authority of the Housing and Economic Recovery Act of 2008 (Pub. L. 110–289, approved July 30, 2008) (HERA) and the Reverse Mortgage Stabilization Act of 2013 (Pub. L. 113–29, approved August 9, 2013) (RMSA). The public comment period on the proposed rule closed on July 18, 2016. All public comments submitted to date can be found at https:// www.regulations.gov/ document?D=HUD-2016-0052-0001, and each public comment is assigned a number that begins with HUD–2016– 0052. On June 23, 2016, a public commenter (HUD–2016–0052–0010) brought to HUD’s attention a suggested change to the HECM program’s policy that grants the mortgagee the option to assign a HECM loan to FHA if the outstanding loan balance is equal to or greater than 98 percent of the maximum claim amount. The commenter stated that, in some cases, a mortgagee may decline to file a claim in this scenario if the property value has risen rapidly and the loan has an above-market rate. The commentator concluded that lenders in this way have a ‘‘put option’’ and ‘‘can choose to keep the best loans and make claims for the worst ones’’. In order to address this issue, the commenter suggested that HUD require that an assignment claim be made when the loans reach 98 percent of the maximum claim amount. HUD seeks public comment on the feasibility of this proposal as HUD is considering whether to adopt it. II. Proposed Approach To Require Claims Be Made at 98 Percent of Maximum Claim Amount Through this document, HUD solicits public comment solely on the issue of requiring mortgagees to file a claim when the HECM loan reaches 98 percent of the maximum claim amount. If HUD were to implement this proposal, HUD would amend § 206.107(a) to require the mortgagee to assign the mortgage to the Commissioner if the mortgage balance is equal to or greater than 98 percent of the maximum claim amount, or the mortgagor has requested a payment which exceeds the difference between the maximum claim amount and the mortgage balance. By proposing the change to the assignment option suggested by the public commenter, HUD would not alter the other proposed changes to E:\FR\FM\11AUP1.SGM 11AUP1 Federal Register / Vol. 81, No. 155 / Thursday, August 11, 2016 / Proposed Rules § 206.107(a). The criteria for assigning a HECM loan to the Commissioner in § 206.107(a) would remain, thereby still precluding the mortgagee from assigning the HECM loan if the loan or the mortgagee’s servicing of the loan does not meet the criteria. Therefore, the proposal would require the mortgagee to assign the mortgage to the Commissioner at the given threshold unless the loan or the mortgagee’s servicing of the loan does not meet the assignment criteria. HUD is soliciting public comment solely on this proposal for a period of 30 days. Dated: August 9, 2016. Genger Charles, General Deputy Assistant Secretary for Housing. [FR Doc. 2016–19255 Filed 8–10–16; 8:45 am] BILLING CODE 4210–67–P ENVIRONMENTAL PROTECTION AGENCY 40 CFR Part 50 [EPA–HQ–OAR–2016–0408; FRL–9950–46– OAR] RIN 2060–AS89 Technical Correction to the National Ambient Air Quality Standards for Particulate Matter Environmental Protection Agency (EPA). ACTION: Proposed rule. AGENCY: The Environmental Protection Agency (EPA) is proposing revisions to correct an equation in an appendix in the National Ambient Air Quality Standards (NAAQS) for Particle Pollution. In the ‘‘Rules and Regulations’’ section of the Federal Register, we are approving the correction as a direct final rule without a prior proposed rule. If we receive no adverse comment, we will not take further action on this proposed rule. Equation 2 describes an intermediate step in the calculation of the design value for the annual PM2.5 (particles with an aerodynamic diameter less than or equal to a nominal 2.5 micrometers) NAAQS. This proposed action would correct a scrivener’s error in one of the equations used to calculate an annual mean PM2.5 concentration, to properly account for cases where a site does not have four complete quarters of data and passes one of two substitution tests. This change accurately reflects the intended calculation of the annual mean PM2.5 design value and is consistent with the text elsewhere in the appendix. sradovich on DSK3GMQ082PROD with PROPOSALS SUMMARY: VerDate Sep<11>2014 17:14 Aug 10, 2016 Jkt 238001 Written comments must be received by September 12, 2016. ADDRESSES: Submit your comments, identified by Docket ID No. EPA–HQ– OAR–2016–0408, to the Federal eRulemaking Portal: https:// www.regulations.gov. Follow the online instructions for submitting comments. Once submitted, comments cannot be edited or withdrawn. The EPA may publish any comment received to its public docket. Do not submit electronically any information you consider to be Confidential Business Information (CBI) or other information whose disclosure is restricted by statute. Multimedia submissions (audio, video, etc.) must be accompanied by a written comment. The written comment is considered the official comment and should include discussion of all points you wish to make. The EPA will generally not consider comments or comment contents located outside of the primary submission (e.g., on the Web, Cloud, or other file sharing system). For additional submission methods, the full EPA public comment policy, information about CBI or multimedia submissions, and general guidance on making effective comments, please visit https://www2.epa.gov/dockets/ commenting-epa-dockets. FOR FURTHER INFORMATION CONTACT: Mr. Brett Gantt, U.S. EPA, Office of Air Quality Planning and Standards, Air Quality Assessment Division, Air Quality Analysis Group (Mail Code: C304–04), Research Triangle Park, NC 27711; telephone number: (919) 541– 5274; fax number: (919) 541–3613; email address: gantt.brett@epa.gov. SUPPLEMENTARY INFORMATION: DATES: I. Why is the EPA issuing this proposed rule? This document proposes a revision in appendix N to correct a scrivener’s error in an intermediate equation in the calculation of the annual PM2.5 design value to properly account for cases where a site does not have four complete quarters of data in a specific year and passes the minimum quarterly value substitution test. We have published a direct final rule approving the revisions to appendix N in the ‘‘Rules and Regulations’’ section of this Federal Register because we view this as a non-controversial action and anticipate no adverse comment. We have explained our reasons for this action in the preamble of the direct final rule. If we receive no adverse comment, we will not take further action on this proposed rule. If we receive adverse comment, we will withdraw the direct PO 00000 Frm 00007 Fmt 4702 Sfmt 4702 53097 final rule, and it will not take effect. We would address all public comments in any subsequent final rule based on this proposed rule. We do not intend to institute a second comment period on this action. Any parties interested in commenting must do so at this time. For further information, please see the information provided in the ADDRESSES section of this document. II. Does this action apply to me? This action applies to you if you are calculating the annual PM2.5 design value for a site which does not have four complete quarters of data for a specific year and passes the minimum quarterly value substitution test. III. Environmental Justice The EPA has determined that this proposed rule will not have disproportionately high and adverse human health or environmental effects on minority or low-income populations because it does not affect the level of protection provided to human health or the environment. This rule does not relax the calculation of the annual PM2.5 NAAQS design values and, therefore, will not cause decreases in the design values used to designate and classify nonattainment areas and assess progress towards meeting the NAAQS. IV. Statutory and Executive Order Reviews For a complete discussion of the administrative requirements applicable to this action, see the direct final rule in the ‘‘Rules and Regulations’’ section of this Federal Register. List of Subjects in 40 CFR Part 50 Air pollution control, Carbon monoxide, Lead, Nitrogen dioxide, Ozone, Particulate matter, Sulfur oxides. Dated: August 3, 2016. Gina McCarthy, Administrator. For the reasons stated in the preamble, the Environmental Protection Agency proposes to amend title 40, chapter I of the Code of Federal Regulations as follows: PART 50—NATIONAL PRIMARY AND SECONDARY AMBIENT AIR QUALITY STANDARDS 1. The authority citation for Part 50 continues to read as follows: ■ Authority: 42 U.S.C. 7401 et seq. 2. In appendix N to part 50, in section 4.4, Equation 2 is revised to read as follows: ■ E:\FR\FM\11AUP1.SGM 11AUP1

Agencies

[Federal Register Volume 81, Number 155 (Thursday, August 11, 2016)]
[Proposed Rules]
[Pages 53095-53097]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-19255]


=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

24 CFR Parts 30 and 206

[Docket No. FR-5353-N-02]
RIN 2502-AI79


 Federal Housing Administration (FHA): Strengthening the Home 
Equity Conversion Mortgage Program

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

ACTION: Supplemental notice of proposed rulemaking.

-----------------------------------------------------------------------

SUMMARY: On May 19, 2016, HUD published in the Federal Register, a 
proposed rule that would codify several significant changes to FHA's 
Home Equity Conversion Mortgage program that were previously issued 
under the authority granted to HUD in the Housing and Economic Recovery 
Act of 2008 and the Reverse Mortgage Stabilization Act of 2013, and to 
make additional regulatory changes. The Home Equity Conversion Mortgage 
program is FHA's reverse mortgage program that enables seniors who have 
equity in their homes to withdraw a portion of the accumulated equity. 
The intent of the Home Equity Conversion Mortgage program is to ease 
the financial burden on elderly homeowners facing increased health, 
housing, and subsistence costs at a time of reduced income. This 
document opens the public comment period solely for the provision 
addressed in this document to address a suggested change offered during 
the public comment period for the proposed rule regarding the lender's 
option to file a claim when the loan balance reaches 98 percent of the 
maximum claim amount.

DATES: Comment Due Date: September 12, 2016.

ADDRESSES: Interested persons are invited to submit comments regarding 
this notice 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 20410-0001.

[[Page 53096]]

    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 
document. No Facsimile Comments. Facsimile (FAX) comments are not 
acceptable.

    Public Inspection of Public Comments. All properly submitted 
comments and communications submitted to HUD will be 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, an advance appointment to review the public comments must be 
scheduled 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: Karin Hill, Senior Policy Advisor, 
Office of Single Family Housing, Department of Housing and Urban 
Development, 451 7th Street SW., Room 9282, Washington, DC 20410; 
telephone number 202-402-3084 (this is not a toll-free number). 
Individuals with speech or hearing impairments may access this number 
through TTY by calling the toll- free Federal Relay Service at 800-877-
8339.

SUPPLEMENTARY INFORMATION:

I. Background

A. The HECM Program

    On May 19, 2016, at 81 FR 31769, HUD published a document that 
proposed to amend its regulations, at 24 CFR parts 30 and 206, that 
govern HUD's reverse mortgage program, called the Home Equity 
Conversion Mortgage (HECM) program. The HECM program allows eligible 
borrowers, 62 years of age or older, to convert the equity in their 
homes into liquid assets. The withdrawal of equity may take a variety 
of forms, as authorized by the National Housing Act (NHA) and selected 
by the borrower. The home, which serves as security for the FHA-insured 
mortgage, must be, and must continue to be, the borrower's principal 
residence during the life of the borrower. For adjustable interest rate 
HECMs, equity payments to the borrower may be in the form of monthly 
disbursements for life or a fixed term of years, disbursements from a 
line of credit advance or a combination of monthly disbursements and a 
line of credit. For fixed interest rate HECMs, equity payments to the 
borrower must be in the form of a single lump sum disbursement at 
closing.
    The maximum amount of equity in the home that is available to a 
borrower under a HECM loan is the ``principal limit'' that is 
calculated for that loan. The borrower retains ownership of the 
property and may sell the home at any time keeping any residual sale 
proceeds in excess of the outstanding loan balance. Until the mortgage 
is repaid, and regardless of whether or not additional disbursements 
under the mortgage are permissible, interest on the mortgage, mortgage 
insurance premiums, and servicing charges, where applicable, continue 
to accrue.
    The subject of this document regards the mortgagee's election of 
the assignment option as provided in Sec.  206.107(a). This section 
gives the mortgagee an option, before the mortgage is submitted for 
insurance endorsement, to select either: (1) The assignment option, 
which allows the mortgagee to assign the HECM to the Secretary if the 
mortgage balance is equal to or greater than 98 percent of the maximum 
claim amount; or (2) the shared premium option, which allows the 
mortgagee to retain a portion of the monthly mortgage insurance 
premiums (MIP) but does not allow the mortgagee to assign the mortgage 
unless the mortgagee fails to make payments and the Secretary demands 
assignment. Under the assignment option, the mortgagee may only assign 
the mortgage to the Secretary if the following are also true: (1) The 
mortgagee is current in making the required payments to the mortgagor; 
(2) the mortgagee is current in making the required MIP payments to the 
Secretary; (3) the mortgage is not due and payable; and (4) the 
mortgage is a first lien of record and title to the property securing 
the mortgage is good and marketable.

B. The Proposed Rule and the Public Comment

    The May 19, 2016, proposed rule proposed to codify a number of 
changes that had been implemented through mortgagee letters under the 
authority of the Housing and Economic Recovery Act of 2008 (Pub. L. 
110-289, approved July 30, 2008) (HERA) and the Reverse Mortgage 
Stabilization Act of 2013 (Pub. L. 113-29, approved August 9, 2013) 
(RMSA).
    The public comment period on the proposed rule closed on July 18, 
2016. All public comments submitted to date can be found at https://www.regulations.gov/document?D=HUD-2016-0052-0001, and each public 
comment is assigned a number that begins with HUD-2016-0052. On June 
23, 2016, a public commenter (HUD-2016-0052-0010) brought to HUD's 
attention a suggested change to the HECM program's policy that grants 
the mortgagee the option to assign a HECM loan to FHA if the 
outstanding loan balance is equal to or greater than 98 percent of the 
maximum claim amount. The commenter stated that, in some cases, a 
mortgagee may decline to file a claim in this scenario if the property 
value has risen rapidly and the loan has an above-market rate. The 
commentator concluded that lenders in this way have a ``put option'' 
and ``can choose to keep the best loans and make claims for the worst 
ones''. In order to address this issue, the commenter suggested that 
HUD require that an assignment claim be made when the loans reach 98 
percent of the maximum claim amount. HUD seeks public comment on the 
feasibility of this proposal as HUD is considering whether to adopt it.

II. Proposed Approach To Require Claims Be Made at 98 Percent of 
Maximum Claim Amount

    Through this document, HUD solicits public comment solely on the 
issue of requiring mortgagees to file a claim when the HECM loan 
reaches 98 percent of the maximum claim amount. If HUD were to 
implement this proposal, HUD would amend Sec.  206.107(a) to require 
the mortgagee to assign the mortgage to the Commissioner if the 
mortgage balance is equal to or greater than 98 percent of the maximum 
claim amount, or the mortgagor has requested a payment which exceeds 
the difference between the maximum claim amount and the mortgage 
balance.
    By proposing the change to the assignment option suggested by the 
public commenter, HUD would not alter the other proposed changes to

[[Page 53097]]

Sec.  206.107(a). The criteria for assigning a HECM loan to the 
Commissioner in Sec.  206.107(a) would remain, thereby still precluding 
the mortgagee from assigning the HECM loan if the loan or the 
mortgagee's servicing of the loan does not meet the criteria. 
Therefore, the proposal would require the mortgagee to assign the 
mortgage to the Commissioner at the given threshold unless the loan or 
the mortgagee's servicing of the loan does not meet the assignment 
criteria.
    HUD is soliciting public comment solely on this proposal for a 
period of 30 days.

    Dated: August 9, 2016.
Genger Charles,
 General Deputy Assistant Secretary for Housing.
[FR Doc. 2016-19255 Filed 8-10-16; 8:45 am]
 BILLING CODE 4210-67-P
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