30-Day Notice of Proposed Information Collection: Quality Control Requirements for Direct Endorsement Lenders; OMB Control No.: 2502-0600, 13735-13736 [2024-03716]

Agencies

• DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

[Federal Register Volume 89, Number 37 (Friday, February 23, 2024)]
[Notices]
[Pages 13735-13736]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-03716]


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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

[Docket No. FR-7080-N-11]


30-Day Notice of Proposed Information Collection: Quality Control 
Requirements for Direct Endorsement Lenders; OMB Control No.: 2502-0600

AGENCY: Office of Policy Development and Research, Chief Data Officer, 
HUD.

ACTION: Notice.

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SUMMARY: HUD is seeking approval from the Office of Management and 
Budget (OMB) for the information collection described below. In 
accordance with the Paperwork Reduction Act, HUD is requesting comment 
from all interested parties on the proposed collection of information. 
The purpose of this notice is to allow for an additional 30 days of 
public comment.

DATES: Comments Due Date: March 25, 2024.

ADDRESSES: Interested persons are invited to submit comments regarding 
this proposal. Written comments and recommendations for the proposed 
information collection should be sent within 30 days of publication of 
this notice to www.reginfo.gov/public/do/PRAMain. Find this particular 
information collection by selecting ``Currently under 30-day Review--
Open for Public Comments'' or by using the search function. Interested 
persons are also invited to submit comments regarding this proposal and 
comments should refer to the proposal by name and/or OMB Control Number 
and should be sent to: Colette Pollard, Clearance Officer, REE, 
Department of Housing and Urban Development, 451 7th Street SW, Room 
8210, Washington, DC 20410-5000; email 
[email protected].

FOR FURTHER INFORMATION CONTACT: Colette Pollard, Reports Management 
Officer, REE, Department of Housing and Urban Development, 451 7th 
Street SW, Washington, DC 20410; email Colette Pollard at 
[email protected], telephone (202) 402-3400. This is not a toll-
free number. HUD welcomes and is prepared to receive calls from 
individuals who are deaf or hard of hearing, as well as individuals 
with speech or communication disabilities. To learn more about how to 
make an accessible telephone call, please visit https://www.fcc.gov/consumers/guides/telecommunications-relay-service-trs. Copies of 
available documents submitted to OMB may be obtained from Ms. Pollard.

SUPPLEMENTARY INFORMATION: This notice informs the public that HUD is 
seeking approval from OMB for the information collection described in 
Section A.
    The Federal Register notice that solicited public comment on the 
information collection for a period of 60 days was published on July 
27, 2023 at 88 FR 48491.

A. Overview of Information Collection

    Title of Information Collection: Quality Control Requirements for 
Direct Endorsement Lenders.
    OMB Approval Number: 2502-0600.
    Type of Request: Extension of currently approved collection.
    Form Number: Not Applicable.
    Description of the need for the information and proposed use: Per 
24 CFR 202.8(a)(3), a Direct Endorsement (DE) lender that sponsors 
third party originators (TPOs) is, ``responsible to the Secretary for 
the actions of its third party originators or mortgagees in originating 
loans or mortgages, unless applicable law or regulation requires 
specific knowledge on the part of the party to be held responsible.'' 
As a result, DE lenders are responsible for conducting quality control 
reviews on TPO originations of FHA-insured mortgage loans and ensuring 
that their Quality Control Plans contain this oversight provision. This 
creates an information collection burden on DE lenders, since these 
institutions must also conduct quality control on loans they originate 
and underwrite. DE lenders must conduct quality control reviews on a 
sample of loans that they originate or underwrite, including loans 
originated by TPOs. For the purposes of this information collection, it 
is assumed that the number of loans reviewed by each DE lender will 
comply with the Sample Size Standard and Sample Composition Standard 
described in HUD Handbook 4000.1, Section V.A.3.a.
    In addition, under 24 CFR 203.255(c) and (e), HUD conducts both 
pre- and post-endorsement reviews of loans submitted for FHA insurance 
by DE lenders. As part of those reviews, the Secretary is authorized to 
determine if there is any information indicating that any certification 
or required document is false, misleading, or constitutes fraud or 
misrepresentation on the part of any party, or that the mortgage fails 
to meet a statutory or regulatory requirement. In order to assist the 
Secretary with this

[[Page 13736]]

directive, FHA requires that lenders self-report all findings of fraud 
and material misrepresentation, as well any material findings 
concerning the origination, underwriting, or servicing of the loan that 
the lender is unable to mitigate or otherwise resolve, per HUD Handbook 
4000.1, Sections V.A.2.d. iv (A) and V.A.2.d.iv (B). The obligation to 
self-report these findings creates an additional information collection 
burden on DE lenders.
    Respondents: Active Title II Direct Endorsement Lenders.
    Estimated Number of Respondents: 3,187.
    Estimated Number of Responses: 67,710.
    Frequency of Response: Annually.
    Average Hours per Response: .25.
    Total Estimated Burden Hours: 16,927.50.

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                                                                                                      Burden       Annual    Hourly cost
                  Information collection                     Number of    Frequency    Responses    hours per      burden        per        Annual cost
                                                            respondents  of response   per annum     response      hours       response
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Quality control of Early Payment Defaults (EPDs)..........        1,463           26       38,038          .25     9,509.50       $53.22     $506,095.59
Quality control of loan originations......................        1,463           16       23,408          .25        5,852        53.22      311,443.44
Quality control through lender self-reports...............          261           24        6,264          .25        1,566        53.22       83,342.52
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B. Solicitation of Public Comment

    This notice is soliciting comments from members of the public and 
affected parties concerning the collection of information described in 
Section A on the following:
    (1) Whether the proposed collection of information is necessary for 
the proper performance of the functions of the agency, including 
whether the information will have practical utility;
    (2) The accuracy of the agency's estimate of the burden of the 
proposed collection of information;
    (3) Ways to enhance the quality, utility, and clarity of the 
information to be collected; and
    (4) Ways to minimize the burden of the collection of information on 
those who are to respond; including through the use of appropriate 
automated collection techniques or other forms of information 
technology, e.g., permitting electronic submission of responses.
    (5) Ways to minimize the burden of the collection of information on 
those who are to respond, including the use of automated collection 
techniques or other forms of information technology.
    HUD encourages interested parties to submit comment in response to 
these questions.

C. Authority

    Section 3507 of the Paperwork Reduction Act of 1995, 44 U.S.C. 
Chapter 35.

Colette Pollard,
Department Reports Management Officer, Office of Policy Development and 
Research, Chief Data Officer.
[FR Doc. 2024-03716 Filed 2-22-24; 8:45 am]
BILLING CODE 4210-67-P