[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 GroupsPaul 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