[Federal Register Volume 60, Number 236 (Friday, December 8, 1995)]
[Proposed Rules]
[Pages 63007-63009]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-30067]



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

[[Page 63008]]


DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

Office of the Assistant Secretary for Housing--Federal Housing 
Commissioner

24 CFR Part 3500

[Docket No. FR-3780-N-03]
RIN 2502-AG40


Mortgage Broker Fee Disclosure Rule: Notice of Establishment of 
Negotiated Rulemaking Advisory Committee and of First Meeting

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

ACTION: Notice of establishment of a negotiated rulemaking advisory 
committee and of first meeting.

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

SUMMARY: The Department is announcing the establishment of a Negotiated 
Rulemaking Advisory Committee under the Federal Advisory Committee Act 
(FACA). The first objective of the committee would be to determine 
whether or not the amount and nature of indirect payments to mortgage 
brokers and certain other mortgage originators (retail lenders) should 
be disclosed to consumers. Second, the committee will seek to resolve 
whether the Real Estate Settlement Procedures Act (RESPA) permits 
volume-based compensation from wholesale lenders, entities that 
purchase mortgage loans, to mortgage brokers and, if such compensation 
is found permissible, whether and how the compensation should be 
disclosed. The committee consists of representatives with a definable 
stake in the outcome of a proposed rule. A charter for the committee 
has been approved pursuant to the FACA, Executive Order 12838, and the 
implementing regulations. This notice also announces the time and place 
of the first committee meeting, which will be open to the public.

DATES: The first meeting of the committee will take place December 13-
14, 1995, and will be open to the public. On Wednesday, December 13, 
the meeting will start at 9:30 a.m. and run until completion; on 
Thursday, December 14, the meeting will start at 9:00 a.m. and run 
until approximately 1:00 p.m. If participants and the facilitator 
agree, the second day of the meeting may be extended beyond the 
projected completion time of 1:00 p.m.

ADDRESSES: The first meeting of the committee will be held in Courtroom 
A of the International Trade Commission Building, 500 E Street, SW., 
Washington, DC 20436.

FOR FURTHER INFORMATION CONTACT: David R. Williamson, Director, RESPA 
Enforcement Unit, Department of Housing and Urban Development, Room 
5241, 451 Seventh Street, SW., Washington, DC 20410-0500; telephone 
(202) 708-4560, or on e-mail through Internet at [email protected]. 
The TDD number for persons who are hearing- or speech-impaired is (202) 
708-4594 (TDD). (These telephone numbers are not toll-free.)

SUPPLEMENTARY INFORMATION:

Background

    On October 25, 1995 (60 FR 54794), HUD published a notice of intent 
to establish a Negotiated Rulemaking Advisory Committee to discuss and 
negotiate a proposed rule to discuss the treatment under RESPA, 
including disclosure requirements, of indirect payments to retail 
lenders and of volume-based compensation to mortgage brokers. The 
October 25 notice also announced that the first meeting of the 
committee could be held in late 1995, if the charter for the committee 
was approved. Subsequent to the publication of the October 25 notice, 
the charter for the committee was approved pursuant to the FACA, 
Executive Order 12838, and the implementing regulations at 41 CFR 101-
6.1007. Because the Department noted the tentative schedule for the 
first meeting in the October 25 notice and wants to commence the 
negotiating process quickly, the first meeting has been scheduled for 
December 13-14, 1995. Members of the committee have been contacted 
directly by the Department about this schedule.
    The October 25 notice requested comment concerning the proposed 
membership of the Committee. After review of the comments and for the 
reasons stated in the notice of intent, the Department has determined 
that establishing a negotiated rulemaking advisory committee on this 
subject is necessary and in the public interest.
    The Department received eight comments on the October 25 notice. 
Six of the eight commenters requested that a member of their 
organization be included in the negotiating committee.
    Specifically, four commenters suggested that lenders who 
concentrate on other mortgage products, such as home equity loans, B 
and C loans, and reverse mortgages, should be included. These 
commenters were the American Financial Services Association, the 
National Home Equity Mortgage Association, the Title One Home 
Improvement Lenders Association, and Transamerica HomeFirst, a reverse 
mortgage lender. In order to keep the negotiated rulemaking body 
manageable and balanced, the Department concluded that with the 
addition of the American Financial Services Association, the most 
diverse of these organizations, the interests of junior lien and 
reverse mortgage lenders would be adequately represented. Moreover, the 
American Financial Services Association has indicated that it would 
itself consult with other affected organizations.
    Two additional national industry groups requested membership. HUD 
has determined that these organizations should be added to the 
committee because they represented types of lending institutions that 
are not already adequately represented on the committee: the 
Independent Bankers Association of America represents community banks 
and the National Association of Federal Credit Unions represents 
Federal credit unions.
    All those who expressed interest in participating in the negotiated 
rulemaking committee are reminded that meetings of the committee are 
open to the public.

Facilitator

    As stated in the October 25 notice, the Honorable Alan W. Heifetz, 
Chief Administrative Law Judge, will be the facilitator for the 
Committee.

Substantive Issues for Negotiation

    The issues identified in the convening report were identified and 
discussed in the October 25 notice and in a proposed rule on this same 
subject recently published by the Department (60 FR 47650, September 
13, 1995). The Department received approximately 800 comments on the 
proposed rule; these comments are available for public inspection and 
copying between 7:30 a.m. and 5:30 p.m. weekdays at the Rules Docket 
Clerk, Office of General Counsel, Room 10276, Department of Housing and 
Urban Development, 451 Seventh Street SW., Washington, DC 20410. The 
comments also will be made available to the members of the committee 
for their consideration as they are negotiating a new proposed rule.

Committee Membership

    Including the members added in response to comments received on the 
October 25 notice, the members of the committee will include: 

[[Page 63009]]


National Industry Groups

 Paul Reid, President, American Home Funding, Richmond, VA, 
President-Elect, Mortgage Bankers Association of America, 1125 15th 
Street, NW., Washington, DC 20005-2766
 Kay Kinney, Executive Vice President, National Association of 
Mortgage Brokers, 1735 N. Lynn Street, Suite 950, Arlington, VA 22209
 John Rasmus, Esq., Senior Federal Administrative Counsel/
Manager, Agency Relations, American Bankers Association, 1120 
Connecticut Avenue, NW., Washington, DC 20036
 Glen Gimble, Esq., Program Manager and Counsel, Real Estate 
Lending Compliance, America's Community Bankers, 900 19th Street, NW., 
Washington, DC 20006
 Roy DeLoach, Policy Representative, Business Issues, National 
Association of Realtors, 700 11th Street, NW., Washington, DC 20001-
4507
 Sue Johnson, President and Executive Director, RESPRO, 1800 M 
Street, NW., Suite 900 South, Washington, DC 20036
 David Goldberg, The Mortgage Capitol Group, Senior Vice 
President, Administration, PHH Mortgage Services Corporation, 6000 
Atrium Way, Mt. Laurel, NJ 08054
 Thomas J. Sheehan, Chairman, IBAA Bank Operations Committee, 
Independent Bankers Association of America, One Thomas Circle, NW., 
Suite 950, Washington, DC 20005-5802
 Brian McDonnell, Senior Executive Vice-President, of Navy 
Federal Credit Union, National Association of Federal Credit Unions, 
P.O. Box 3769, Washington, DC 20007
 Robert E. McKew, Vice President and General Counsel, American 
Financial Services Association, 919 18th Street, NW., Washington, DC 
20006

Consumer Groups

 Robert Creamer, Citizen Action, 68 East Wacker Place, Chicago, 
IL 60601
 William J. Brennan, Jr., Esq., (Member, Board of Directors, 
National Association of Consumer Advocates), Home Defense Program of 
the Atlanta Legal Aid Society, 340 West Ponce De Leon Avenue, Decatur, 
Georgia 30030
 Nina Simon, Esq., Jean Davis, Esq., Legal Counsel for the 
Elderly, American Association of Retired Persons, 601 E Street, N.W., 
Washington, D.C. 20049

State Organizations

 Craig Jordan, Esq., Assistant Attorney General for the State 
of Texas, Consumer Affairs Division, 714 Jackson Street, Suite 800, 
Dallas, Texas 75202
 Daniel Muccia, President, American Association of Residential 
Mortgage Regulators and Deputy Superintendent of Banks, State of New 
York Banking Department, Two Rector Street, New York, New York 10006

Government-Sponsored Enterprises

 Jim Newell, Esq., Associate General Counsel, Federal Home Loan 
Mortgage Corporation, 8200 Jones Branch Drive, McLean, VA 22102-3107
 JoAnn Carpenter, Esq., Vice President and Deputy General 
Counsel, Federal National Mortgage Association, 3900 Wisconsin Ave., 
N.W., Washington, D.C. 20016-2899

Federal Government

 Designated Federal Officer: Sarah X. Rosen, Esq., Special 
Assistant to the Assistant Secretary for Housing, Room 9100, U.S. 
Department of Housing and Urban Development, 451 7th Street, S.W., 
Washington, D.C. 20410, (202) 708-3600

Schedule

    HUD will hold the first meeting of the committee on December 13-14, 
1995. On Wednesday, December 13, the meeting will start at 9:30 a.m. 
and run until completion; on Thursday, December 14, the meeting will 
start at 9:00 a.m. and run until approximately 1:00 p.m. If 
participants and the facilitator agree, the second day of the meeting 
may be extended beyond the projected completion time of 1:00 p.m. The 
location of the meeting will be Courtroom A of the International Trade 
Commission Building, 500 E Street, S.W., Washington, D.C. 20436. The 
purpose of the meeting will be to orient members to the negotiated 
rulemaking (reg-neg) process, establish a basic set of understandings 
and ground rules (protocols) regarding the process that will be 
followed in seeking a consensus, and begin to address the issues. This 
meeting is open to the public.
    Decisions with respect to future meetings will be made at the first 
meeting and from time to time thereafter. Notices of future meetings 
will be published in the Federal Register if time permits.
    To prevent delays that might postpone timely issuance of a proposed 
rule, HUD intends to terminate the committee's activities if it does 
not reach consensus within 5 months of the first meeting. The process 
may end earlier if the facilitator believes that sufficient progress 
cannot be made or that an impasse has developed that cannot be 
resolved.

    Authority: 42 U.S.C. 1437g, 3535(d).

    Dated: December 5, 1995.
Stephanie A. Smith,
Acting General Deputy Assistant Secretary for Housing.
[FR Doc. 95-30067 Filed 12-6-95; 1:38 pm]
BILLING CODE 4210-27-P