Federal Housing Administration (FHA): Single-Family Loan Sale Program; Advance Notice of Proposed Rulemaking and Request for Public Comment, 19748-19750 [2019-09124]
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19748
Federal Register / Vol. 84, No. 87 / Monday, May 6, 2019 / Proposed Rules
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[FR Doc. 2019–09186 Filed 5–3–19; 8:45 am]
BILLING CODE 4910–13–P
DEPARTMENT OF HOUSING AND
URBAN DEVELOPMENT
24 CFR Part 204
[Docket No. FR–6051–A–01]
Federal Housing Administration (FHA):
Single-Family Loan Sale Program;
Advance Notice of Proposed
Rulemaking and Request for Public
Comment
Office of the Assistant
Secretary for Housing—Federal Housing
Commissioner, HUD.
ACTION: Advance notice of proposed
rulemaking and request for public
comment.
AGENCY:
This notice seeks comments
regarding FHA’s Single-Family Loan
Sale Program (the Program). The
Program has been operating under
demonstration and general disposition
authority, through which eligible,
single-family mortgage loans assigned to
FHA in exchange for claim payment and
mortgage notes are sold competitively to
maximize recoveries and strengthen the
FHA Mutual Mortgage Insurance Fund
(‘‘MMIF’’). FHA is seeking comments
from the public to improve program
practices and procedures as FHA
transitions the Program from a
demonstration to a permanent program.
FHA will consider the comments
submitted in developing a permanent
program for assigning defaulted SingleFamily mortgage loans to FHA and
disposing of the assigned loans through
loan sales.
DATES: Comment Due Date: Written
comments must be received on or before
July 5, 2019.
ADDRESSES: Interested persons are
invited to submit comments regarding
this notice. Comments should refer to
the above docket number and title.
There are two methods for submitting
comment.
jbell on DSK3GLQ082PROD with PROPOSALS
SUMMARY:
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Jkt 247001
1. Submission of comments by mail:
Comments may be submitted by mail to
the HUD Regulations Division, Office of
Housing, Department of Housing and
Urban Development, 451 7th Street SW,
Washington, DC 20410–8000; telephone:
(202) 708–2625 (this is not a toll-free
number), or toll free (800) 481–9895.
Hearing- or speech-impaired individuals
may access these numbers through TTY
by calling the Federal Relay Service at
(800) 877–8339 (this is a toll-free
number).
2. Electronic submission of comments:
Comments may be submitted
electronically through the Federal
eRulemaking Portal at
www.regulations.gov. FHA 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 FHA, and enables FHA to
make them immediately available to the
public. Comments submitted
electronically through the
www.regulations.gov website can be
viewed by other commenters and
interested members of the public.
Commenters should follow 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 this notice.
No Facsimile Comments. Facsimile
(FAX) comments are not acceptable.
3. Public inspection of public
comments: All properly submitted
comments and communications
submitted to FHA 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
appointment to review the public
comments must be scheduled in
advance by calling the Regulations
Division at (202) 402–5731 (this is not
a toll-free number). Individuals with
speech or hearing impairments may
access this number via TTY by calling
the 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: John
Lucey, Director, FHA Office of Asset
Sales, Office of Housing, Department of
Housing and Urban Development, 451
7th Street SW, Washington, DC 20410–
8000; telephone: (202) 708–2625 (this is
not a toll-free number), or toll-free: (800)
481–9895. Hearing- or speech-impaired
PO 00000
Frm 00006
Fmt 4702
Sfmt 4702
individuals may access these numbers
through TTY by calling the Federal
Relay Service at: (800) 877–8339 (this is
a toll-free number).
SUPPLEMENTARY INFORMATION:
I. Background
Since 2002, FHA has operated a
demonstration program to implement
the general authority under section 204
of the National Housing Act, 12 U.S.C.
1710, as amended by section 601 of the
Fiscal Year 1999 Departments of
Veterans Affairs and Housing and Urban
Development and Independent Agencies
Appropriations Act (Pub. L. 105–276,
approved October 21, 1998) (‘‘FY 1999
Appropriations Act’’). Section 601 of the
FY 1999 Appropriations Act amended
section 204 to make more effective the
methods for paying insurance claims
and disposing of FHA-acquired single
family mortgages and properties.1 Over
the years, FHA has adopted various
names to refer to this demonstration,
including the Accelerated Claim and
Asset Disposition (ACD) Demonstration,
the Single Family Loan Sales (‘‘SFLS’’)
Program, and the Distressed Asset
Stabilization Program (‘‘DASP’’).
Nonetheless, FHA has continuously
operated the demonstration for the
purpose of selecting a cost- and missioneffective method of paying insurance
claims and disposing of acquired notes
or properties under the FHA SingleFamily insurance programs. Section 204
grants FHA discretion to implement a
range of disposition alternatives. This
statutory provision provides FHA the
flexibility to consider and make
adjustments based upon current market
and economic factors and conditions.
Exercising this authority helps to
effectively manage FHA’s defaulted
assets and minimizes losses to the
MMIF, thereby helping to satisfy the
Secretary’s fiduciary duty to preserve
the insurance fund.
By notice published in the Federal
Register on February 5, 2002, FHA
announced its intention to establish the
ACD Demonstration to ‘‘address any
programmatic concerns’’ and ‘‘assess its
success and determine whether to
implement the ACD process on a
permanent basis, throughout the
country.’’ 2 As stated in the notice,
‘‘[m]ortgagee participation in the ACD
[demonstration] is voluntary,’’ and
interested persons could submit
comments.3 Approximately eight
months after publishing the February 5,
1 See
12 U.S.C. 1710(a) & (g).
FR–4691–N–01, Notice of FHA Accelerated
Claim Disposition (ACD) Demonstration, 67 FR
5418 (February 5, 2002).
3 Id.
2 See
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06MYP1
Federal Register / Vol. 84, No. 87 / Monday, May 6, 2019 / Proposed Rules
2002 Notice, FHA published an
additional notice responding to public
comments and conducted its first sale of
defaulted mortgages through the ACD
Demonstration.4
On June 5, 2006, FHA issued an
Advance Notice of Proposed
Rulemaking (‘‘ANPR’’) that solicited
public comment ‘‘on HUD’s ACD
program before HUD proceeds to issue
a proposed rule that will commence the
rulemaking process that will result in
the codification of the requirements for
the ACD program.’’ 5 The ANPR
solicited public comments in an effort to
make ‘‘possible improvements to the
program,’’ including the most efficient
way to ‘‘maximize the return to the FHA
insurance fund’’ by ‘‘minimiz[ing] the
time an asset is held.’’ 6 On April 30,
2007, FHA published a regulatory
agenda providing public notice that
FHA had withdrawn the ANPR effective
March 1, 2007.7 Rather than proceed to
rulemaking at that time, FHA adopted
additional modifications to the
demonstration, including changing the
disposition method from joint venture
to whole note sales.
jbell on DSK3GLQ082PROD with PROPOSALS
II. This Document
FHA is considering notice-andcomment rulemaking to transition the
Program from a demonstration to a
permanent program. Accordingly, FHA
is evaluating potential modifications to
the Program to manage FHA’s defaulted
assets and minimize losses to the MMIF,
thereby helping to satisfy the Secretary’s
fiduciary duty to preserve the insurance
fund. The Program goals are to ensure
that FHA’s public policy objectives are
addressed and that returns to the MMIF
from the claim payment and final
disposition of each asset are maximized.
A key objective of potential changes
to the Program is to continue to provide
flexibility for the management of
defaulted notes. Without the Program,
after conducting loss mitigation, lenders
in most cases would be required to
foreclose the defaulted loans to perfect
an insurance claim. If the properties
could not be sold to a third party at
foreclosure or a second-chance auction,
the lender would be required to convey
the property to FHA in order to be paid
a mortgage insurance claim, incurring
legal and holding costs that increase the
financial cost to FHA through claim
4 See Notice of FHA Accelerated Claim
Disposition Demonstration, 67 FR 66038 (October
29, 2002).
5 See Accelerated Claim and Asset Disposition
(ACD) Program; Advanced Notice of Proposed
Rulemaking, 71 FR 32392 (June 5, 2006).
6 Id.
7 See HUD Semiannual Regulatory Agenda, 72 FR
22694 (April 30, 2007).
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17:28 May 03, 2019
Jkt 247001
payment. Properties conveyed to FHA
would increase FHA’s REO inventory,
posing an additional financial burden
on FHA for asset management costs.
Disposing of delinquent loans shortens
the period between default and claim
payment, reducing the financial
exposure to the MMIF for costs incurred
after default. Implementing the Program
as a permanent program will enable
FHA to better manage the claims
process for defaulted loans, establish a
permanent, efficient disposition
structure for loans, and reduce the
overall financial exposure of the MMIF.
Comments received in response to
this notice will inform FHA on potential
options to improve program
participation, performance, and
enforcement. The objective of seeking
comments is to gather input from the
public that will be used to review
current single family forward note sale
program requirements, including those
pertaining to asset eligibility, the
assignment claims process, loan
delivery, sale structure, purchaser
requirements, and enforcement
mechanisms. This information will be
applied to develop a regulatory
framework for single family forward
note sales that provides clarity about the
requirements and objectives of the
Program for all participants and
stakeholders.
Separate from single family forward
note sales, the Department has
conducted four competitive sales of
HUD-Held Home Equity Conversion
Mortgages (HECMs) as part of the HUDHeld Vacant Loan Sales. The loans sold
in these offerings have been confirmed
to be vacant and all borrowers, coborrowing spouses, or non-borrowing
spouse have been confirmed to be
deceased. These sales were pursuant to
section (d) of Public Law 105–276
(1998), codified at 12 U.S.C. 1710(g),
and pursuant to section 255 of the
National Housing Act (12 U.S.C. 1715z–
20).
Each of these sales were announced
via separate Federal Register Notice and
were publicly advertised.8
III. Request for Public Comment
This notice offers the opportunity for
the public to provide information and
recommendations on the design of a
permanent Single-Family Loan Sale
Program, including asset eligibility, the
assignment claims process, loan
delivery, sale structure, purchaser
requirements, and enforcement
mechanisms. FHA will consider all
8 See 81 FR 84610 (November 23, 2016); 82 FR
26708 (June 8, 2017); and 83 FR 9533 (March 6,
2018).
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19749
public comments received and
subsequently issue a proposed rule. At
that time, FHA will accept further
public comments on the proposed
permanent program structure. FHA is
particularly interested in public
comments addressing the following
issues:
3.0 Obstacles, Benefits, and
Drawbacks
3.0.1 FHA Single Family Loan Sale
Servicers
(1) What obstacles exist to
participation in the Program and how
can those obstacles be addressed?
(2) What factors are relevant to the
decision to submit loans for claim
payment through the Program versus
alternative assignment options?
(3) What, if any, monetary costs have
been or will be incurred through
program participation, including but not
limited to, administrative and overhead
costs?
(4) What challenges have been or will
be encountered in assigning and
delivering loans to the Program?
(5) What are the benefits to
participating in the Program?
a. Are any measurements available
with respect to benefits from the
Program?
b. Were there any unanticipated
benefits from participation in the
Program?
(6) What are the greatest drawbacks
involved in participating and filing
assignment claims through the Program?
a. Are any metrics available that
should be collected to track drawbacks?
b. How and why, if at all, have any
program participants changed,
modified, or discontinued participation
due to unanticipated consequences or
drawbacks?
3.0.1.1
Administrative Issues
(1) Resources:
a. What FHA-supplied resources or
assistance (e.g., program support) do
servicers require for participation in the
Program as an alternative claim
payment mechanism?
b. What resources would be helpful?
(2) Planning process:
a. Beginning with the initial planning
phase, what amount of time is needed
by servicers to implement any necessary
changes in procedures, protocols,
computer programs, or technology
platform, etc., to enable participation in
the Program?
b. What are the steps in the process
and how long will each take?
(3) Administrative obstacles:
a. What administrative obstacles exist
to participation in the Program (e.g.,
E:\FR\FM\06MYP1.SGM
06MYP1
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Federal Register / Vol. 84, No. 87 / Monday, May 6, 2019 / Proposed Rules
reallocation of personnel and resources,
reprogramming and reconfiguration of
computer and other systems)?
b. How can those obstacles be
addressed?
(4) Post-Sale Servicing considerations:
a. What obstacles were encountered in
servicing loans post-sale?
3.0.2 FHA Single Family Loan Sale
Bidders & Purchasers
(1) What loan characteristics are most
desirable in the loans offered through
the Program?
(2) What type of loan pooling are most
desirable for the loans offered through
the Program?
(3) Were the due diligence materials
supplied in the past sales satisfactory?
(4) What additional due diligence
materials would be helpful?
(5) What amount of time is needed by
bidders to evaluate due diligence
materials to enable participation in the
Program?
(6) What are the greatest obstacles for
someone interested in purchasing notes?
a. What sorts of entities have the
actual capacity to purchase and service
notes and has that population changed
over the Program’s existence?
b. Has purchaser eligibility, based on
requirements imposed by FHA, been an
issue?
c. What are the benefits and
drawbacks of partnership participation
in the Program (e.g., for-profit
purchasers partnering with nonprofits)?
Should the Program do more to facilitate
such partnerships?
Post-Sale Servicing
(1) Post-sale considerations:
a. Were obstacles encountered
servicing loans post-sale?
b. What were the strategies used for
loan disposition following purchase and
which proved successful?
(2) What changes, if any, should FHA
consider to purchaser performance
reporting requirements (e.g., reporting
on borrower outcomes)? What are the
expected benefits and trade-offs of such
changes?
jbell on DSK3GLQ082PROD with PROPOSALS
3.1
Community Impacts
(1) What benefits has the Program
provided communities?
(2) What, if any, adverse effects has
the Program had on communities?
(3) What changes, if any, in the sale
structure, loan eligibility criteria, or
post-sale requirements on purchasers
would improve community impacts?
What are the policy trade-offs (e.g.,
potential adverse impact on bid pricing)
of such changes?
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17:28 May 03, 2019
Jkt 247001
3.2
Other Comments
In addition to the subject areas
described above, FHA welcomes any
other input that interested parties
believe would contribute to the
successful design and permanent
implementation of the Program.
Dated: April 17, 2019.
John Garvin,
General Deputy Assistant Secretary for
Housing.
[FR Doc. 2019–09124 Filed 5–3–19; 8:45 am]
BILLING CODE 4210–67–P
ENVIRONMENTAL PROTECTION
AGENCY
40 CFR Part 52
[EPA–R06–OAR–2018–0555; FRL–9992–89–
Region 6]
Air Plan Approval; Texas; Revisions to
Public Notice for Air Quality Permit
Applications
Environmental Protection
Agency (EPA).
ACTION: Proposed rule.
AGENCY:
Pursuant to the Federal Clean
Air Act (CAA or the Act), the
Environmental Protection Agency (EPA)
is proposing one revision to the Texas
State Implementation Plan (SIP)
submitted on July 9, 2018 to revise the
public notice provisions for certain air
quality permit applications. The EPA is
also proposing ministerial changes to
the Code of Federal Regulations (CFR) to
reflect recent EPA SIP approvals to the
Texas SIP for public notice provisions
for air quality permit applications.
DATES: Written comments must be
received on or before June 5, 2019.
ADDRESSES: Submit your comments,
identified by Docket No. EPA–R06–
OAR–2018–0555, at https://
www.regulations.gov or via email to
layton.elizabeth@epa.gov. Follow the
online instructions for submitting
comments. Once submitted, comments
cannot be edited or removed from
Regulations.gov. 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
SUMMARY:
PO 00000
Frm 00008
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contents located outside of the primary
submission (i.e., on the web, cloud, or
other file sharing system). For
additional submission methods, please
contact Elizabeth Layton, 214–665–
2136, layton.elizabeth@epa.gov. For the
full EPA public comment policy,
information about CBI or multimedia
submissions, and general guidance on
making effective comments, please visit
https://www.epa.gov/dockets/
commenting-epa-dockets.
Docket: The index to the docket for
this action is available electronically at
www.regulations.gov and in hard copy
at the EPA Region 6, 1445 Ross Avenue,
Suite 700, Dallas, Texas. While all
documents in the docket are listed in
the index, some information may be
publicly available only at the hard copy
location (e.g., copyrighted material), and
some may not be publicly available at
either location (e.g., CBI).
FOR FURTHER INFORMATION CONTACT:
Elizabeth Layton, Air Permits Section,
EPA Region 6, 1445 Ross Avenue, Suite
700, Dallas, TX 75202, 214–665–2136,
layton.elizabeth@epa.gov. To inspect
the hard copy materials, please schedule
an appointment with Ms. Elizabeth
Layton or Mr. Bill Deese at 214–665–
7253.
SUPPLEMENTARY INFORMATION:
Throughout this document wherever
‘‘we,’’ ‘‘us,’’ or ‘‘our’’ is used, we mean
the EPA.
I. Background
Section 110(a)(2)(C) of the CAA
requires states to develop and submit to
the EPA for approval into the SIP,
preconstruction review and permitting
programs applicable to certain new and
modified stationary sources of air
pollutants for attainment and
nonattainment areas that cover both
major and minor new sources and
modifications, collectively referred to as
the NSR SIP. The CAA NSR SIP
program is composed of three separate
programs: Prevention of Significant
Deterioration (PSD), Nonattainment
New Source Review (NNSR), and Minor
NSR. The EPA codified minimum
requirements for these State permitting
programs including public participation
and notification requirements at 40 CFR
51.160–51.164. Requirements specific to
construction of new stationary sources
and major modifications in
nonattainment areas are codified in 40
CFR 51.165 for the NNSR program.
Requirements for permitting of new
stationary sources and major
modifications in attainment areas
subject to PSD, including additional
public participation requirements, are
found at 40 CFR 51.166. This proposed
E:\FR\FM\06MYP1.SGM
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Agencies
[Federal Register Volume 84, Number 87 (Monday, May 6, 2019)]
[Proposed Rules]
[Pages 19748-19750]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-09124]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
24 CFR Part 204
[Docket No. FR-6051-A-01]
Federal Housing Administration (FHA): Single-Family Loan Sale
Program; Advance Notice of Proposed Rulemaking and Request for Public
Comment
AGENCY: Office of the Assistant Secretary for Housing--Federal Housing
Commissioner, HUD.
ACTION: Advance notice of proposed rulemaking and request for public
comment.
-----------------------------------------------------------------------
SUMMARY: This notice seeks comments regarding FHA's Single-Family Loan
Sale Program (the Program). The Program has been operating under
demonstration and general disposition authority, through which
eligible, single-family mortgage loans assigned to FHA in exchange for
claim payment and mortgage notes are sold competitively to maximize
recoveries and strengthen the FHA Mutual Mortgage Insurance Fund
(``MMIF''). FHA is seeking comments from the public to improve program
practices and procedures as FHA transitions the Program from a
demonstration to a permanent program. FHA will consider the comments
submitted in developing a permanent program for assigning defaulted
Single-Family mortgage loans to FHA and disposing of the assigned loans
through loan sales.
DATES: Comment Due Date: Written comments must be received on or before
July 5, 2019.
ADDRESSES: Interested persons are invited to submit comments regarding
this notice. Comments should refer to the above docket number and
title. There are two methods for submitting comment.
1. Submission of comments by mail: Comments may be submitted by
mail to the HUD Regulations Division, Office of Housing, Department of
Housing and Urban Development, 451 7th Street SW, Washington, DC 20410-
8000; telephone: (202) 708-2625 (this is not a toll-free number), or
toll free (800) 481-9895. Hearing- or speech-impaired individuals may
access these numbers through TTY by calling the Federal Relay Service
at (800) 877-8339 (this is a toll-free number).
2. Electronic submission of comments: Comments may be submitted
electronically through the Federal eRulemaking Portal at
www.regulations.gov. FHA 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 FHA, and enables FHA to make them immediately available to
the public. Comments submitted electronically through the
www.regulations.gov website can be viewed by other commenters and
interested members of the public. Commenters should follow 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 this notice.
No Facsimile Comments. Facsimile (FAX) comments are not acceptable.
3. Public inspection of public comments: All properly submitted
comments and communications submitted to FHA 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 appointment to review the public comments must be
scheduled in advance by calling the Regulations Division at (202) 402-
5731 (this is not a toll-free number). Individuals with speech or
hearing impairments may access this number via TTY by calling the
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: John Lucey, Director, FHA Office of
Asset Sales, Office of Housing, Department of Housing and Urban
Development, 451 7th Street SW, Washington, DC 20410-8000; telephone:
(202) 708-2625 (this is not a toll-free number), or toll-free: (800)
481-9895. Hearing- or speech-impaired individuals may access these
numbers through TTY by calling the Federal Relay Service at: (800) 877-
8339 (this is a toll-free number).
SUPPLEMENTARY INFORMATION:
I. Background
Since 2002, FHA has operated a demonstration program to implement
the general authority under section 204 of the National Housing Act, 12
U.S.C. 1710, as amended by section 601 of the Fiscal Year 1999
Departments of Veterans Affairs and Housing and Urban Development and
Independent Agencies Appropriations Act (Pub. L. 105-276, approved
October 21, 1998) (``FY 1999 Appropriations Act''). Section 601 of the
FY 1999 Appropriations Act amended section 204 to make more effective
the methods for paying insurance claims and disposing of FHA-acquired
single family mortgages and properties.\1\ Over the years, FHA has
adopted various names to refer to this demonstration, including the
Accelerated Claim and Asset Disposition (ACD) Demonstration, the Single
Family Loan Sales (``SFLS'') Program, and the Distressed Asset
Stabilization Program (``DASP''). Nonetheless, FHA has continuously
operated the demonstration for the purpose of selecting a cost- and
mission-effective method of paying insurance claims and disposing of
acquired notes or properties under the FHA Single-Family insurance
programs. Section 204 grants FHA discretion to implement a range of
disposition alternatives. This statutory provision provides FHA the
flexibility to consider and make adjustments based upon current market
and economic factors and conditions. Exercising this authority helps to
effectively manage FHA's defaulted assets and minimizes losses to the
MMIF, thereby helping to satisfy the Secretary's fiduciary duty to
preserve the insurance fund.
---------------------------------------------------------------------------
\1\ See 12 U.S.C. 1710(a) & (g).
---------------------------------------------------------------------------
By notice published in the Federal Register on February 5, 2002,
FHA announced its intention to establish the ACD Demonstration to
``address any programmatic concerns'' and ``assess its success and
determine whether to implement the ACD process on a permanent basis,
throughout the country.'' \2\ As stated in the notice, ``[m]ortgagee
participation in the ACD [demonstration] is voluntary,'' and interested
persons could submit comments.\3\ Approximately eight months after
publishing the February 5,
[[Page 19749]]
2002 Notice, FHA published an additional notice responding to public
comments and conducted its first sale of defaulted mortgages through
the ACD Demonstration.\4\
---------------------------------------------------------------------------
\2\ See FR-4691-N-01, Notice of FHA Accelerated Claim
Disposition (ACD) Demonstration, 67 FR 5418 (February 5, 2002).
\3\ Id.
\4\ See Notice of FHA Accelerated Claim Disposition
Demonstration, 67 FR 66038 (October 29, 2002).
---------------------------------------------------------------------------
On June 5, 2006, FHA issued an Advance Notice of Proposed
Rulemaking (``ANPR'') that solicited public comment ``on HUD's ACD
program before HUD proceeds to issue a proposed rule that will commence
the rulemaking process that will result in the codification of the
requirements for the ACD program.'' \5\ The ANPR solicited public
comments in an effort to make ``possible improvements to the program,''
including the most efficient way to ``maximize the return to the FHA
insurance fund'' by ``minimiz[ing] the time an asset is held.'' \6\ On
April 30, 2007, FHA published a regulatory agenda providing public
notice that FHA had withdrawn the ANPR effective March 1, 2007.\7\
Rather than proceed to rulemaking at that time, FHA adopted additional
modifications to the demonstration, including changing the disposition
method from joint venture to whole note sales.
---------------------------------------------------------------------------
\5\ See Accelerated Claim and Asset Disposition (ACD) Program;
Advanced Notice of Proposed Rulemaking, 71 FR 32392 (June 5, 2006).
\6\ Id.
\7\ See HUD Semiannual Regulatory Agenda, 72 FR 22694 (April 30,
2007).
---------------------------------------------------------------------------
II. This Document
FHA is considering notice-and-comment rulemaking to transition the
Program from a demonstration to a permanent program. Accordingly, FHA
is evaluating potential modifications to the Program to manage FHA's
defaulted assets and minimize losses to the MMIF, thereby helping to
satisfy the Secretary's fiduciary duty to preserve the insurance fund.
The Program goals are to ensure that FHA's public policy objectives are
addressed and that returns to the MMIF from the claim payment and final
disposition of each asset are maximized.
A key objective of potential changes to the Program is to continue
to provide flexibility for the management of defaulted notes. Without
the Program, after conducting loss mitigation, lenders in most cases
would be required to foreclose the defaulted loans to perfect an
insurance claim. If the properties could not be sold to a third party
at foreclosure or a second-chance auction, the lender would be required
to convey the property to FHA in order to be paid a mortgage insurance
claim, incurring legal and holding costs that increase the financial
cost to FHA through claim payment. Properties conveyed to FHA would
increase FHA's REO inventory, posing an additional financial burden on
FHA for asset management costs. Disposing of delinquent loans shortens
the period between default and claim payment, reducing the financial
exposure to the MMIF for costs incurred after default. Implementing the
Program as a permanent program will enable FHA to better manage the
claims process for defaulted loans, establish a permanent, efficient
disposition structure for loans, and reduce the overall financial
exposure of the MMIF.
Comments received in response to this notice will inform FHA on
potential options to improve program participation, performance, and
enforcement. The objective of seeking comments is to gather input from
the public that will be used to review current single family forward
note sale program requirements, including those pertaining to asset
eligibility, the assignment claims process, loan delivery, sale
structure, purchaser requirements, and enforcement mechanisms. This
information will be applied to develop a regulatory framework for
single family forward note sales that provides clarity about the
requirements and objectives of the Program for all participants and
stakeholders.
Separate from single family forward note sales, the Department has
conducted four competitive sales of HUD-Held Home Equity Conversion
Mortgages (HECMs) as part of the HUD-Held Vacant Loan Sales. The loans
sold in these offerings have been confirmed to be vacant and all
borrowers, co-borrowing spouses, or non-borrowing spouse have been
confirmed to be deceased. These sales were pursuant to section (d) of
Public Law 105-276 (1998), codified at 12 U.S.C. 1710(g), and pursuant
to section 255 of the National Housing Act (12 U.S.C. 1715z-20).
Each of these sales were announced via separate Federal Register
Notice and were publicly advertised.\8\
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\8\ See 81 FR 84610 (November 23, 2016); 82 FR 26708 (June 8,
2017); and 83 FR 9533 (March 6, 2018).
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III. Request for Public Comment
This notice offers the opportunity for the public to provide
information and recommendations on the design of a permanent Single-
Family Loan Sale Program, including asset eligibility, the assignment
claims process, loan delivery, sale structure, purchaser requirements,
and enforcement mechanisms. FHA will consider all public comments
received and subsequently issue a proposed rule. At that time, FHA will
accept further public comments on the proposed permanent program
structure. FHA is particularly interested in public comments addressing
the following issues:
3.0 Obstacles, Benefits, and Drawbacks
3.0.1 FHA Single Family Loan Sale Servicers
(1) What obstacles exist to participation in the Program and how
can those obstacles be addressed?
(2) What factors are relevant to the decision to submit loans for
claim payment through the Program versus alternative assignment
options?
(3) What, if any, monetary costs have been or will be incurred
through program participation, including but not limited to,
administrative and overhead costs?
(4) What challenges have been or will be encountered in assigning
and delivering loans to the Program?
(5) What are the benefits to participating in the Program?
a. Are any measurements available with respect to benefits from the
Program?
b. Were there any unanticipated benefits from participation in the
Program?
(6) What are the greatest drawbacks involved in participating and
filing assignment claims through the Program?
a. Are any metrics available that should be collected to track
drawbacks?
b. How and why, if at all, have any program participants changed,
modified, or discontinued participation due to unanticipated
consequences or drawbacks?
3.0.1.1 Administrative Issues
(1) Resources:
a. What FHA-supplied resources or assistance (e.g., program
support) do servicers require for participation in the Program as an
alternative claim payment mechanism?
b. What resources would be helpful?
(2) Planning process:
a. Beginning with the initial planning phase, what amount of time
is needed by servicers to implement any necessary changes in
procedures, protocols, computer programs, or technology platform, etc.,
to enable participation in the Program?
b. What are the steps in the process and how long will each take?
(3) Administrative obstacles:
a. What administrative obstacles exist to participation in the
Program (e.g.,
[[Page 19750]]
reallocation of personnel and resources, reprogramming and
reconfiguration of computer and other systems)?
b. How can those obstacles be addressed?
(4) Post-Sale Servicing considerations:
a. What obstacles were encountered in servicing loans post-sale?
3.0.2 FHA Single Family Loan Sale Bidders & Purchasers
(1) What loan characteristics are most desirable in the loans
offered through the Program?
(2) What type of loan pooling are most desirable for the loans
offered through the Program?
(3) Were the due diligence materials supplied in the past sales
satisfactory?
(4) What additional due diligence materials would be helpful?
(5) What amount of time is needed by bidders to evaluate due
diligence materials to enable participation in the Program?
(6) What are the greatest obstacles for someone interested in
purchasing notes?
a. What sorts of entities have the actual capacity to purchase and
service notes and has that population changed over the Program's
existence?
b. Has purchaser eligibility, based on requirements imposed by FHA,
been an issue?
c. What are the benefits and drawbacks of partnership participation
in the Program (e.g., for-profit purchasers partnering with
nonprofits)? Should the Program do more to facilitate such
partnerships?
Post-Sale Servicing
(1) Post-sale considerations:
a. Were obstacles encountered servicing loans post-sale?
b. What were the strategies used for loan disposition following
purchase and which proved successful?
(2) What changes, if any, should FHA consider to purchaser
performance reporting requirements (e.g., reporting on borrower
outcomes)? What are the expected benefits and trade-offs of such
changes?
3.1 Community Impacts
(1) What benefits has the Program provided communities?
(2) What, if any, adverse effects has the Program had on
communities?
(3) What changes, if any, in the sale structure, loan eligibility
criteria, or post-sale requirements on purchasers would improve
community impacts? What are the policy trade-offs (e.g., potential
adverse impact on bid pricing) of such changes?
3.2 Other Comments
In addition to the subject areas described above, FHA welcomes any
other input that interested parties believe would contribute to the
successful design and permanent implementation of the Program.
Dated: April 17, 2019.
John Garvin,
General Deputy Assistant Secretary for Housing.
[FR Doc. 2019-09124 Filed 5-3-19; 8:45 am]
BILLING CODE 4210-67-P