[Federal Register Volume 62, Number 43 (Wednesday, March 5, 1997)]
[Rules and Regulations]
[Page 9930]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-5457]


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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

24 CFR Part 203

[Docket No. FR-4032-I-02]
RIN 2502-AG72


Single Family Mortgage Insurance--Loss Mitigation Procedures 
Suspension of Certain Provisions of Interim Rule

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

ACTION: Suspension of certain provisions of interim rule.

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SUMMARY: This document suspends, until the date of publication of a 
final rule, the last sentence in introductory paragraph (a) of 24 CFR 
203.355 and the second sentence in paragraph (f) of 24 CFR 203.402, 
which otherwise would have become applicable on March 1, 1997. This 
suspension is being issued to permit HUD to consider fully the public 
comments on these provisions before making them applicable. The 
suspended provisions relate to loss mitigation procedures for single 
family mortgage insurance.

DATES: Effective February 28, 1997, the last sentence of the 
introductory test of 24 CFR 203.355(a) and the second sentence of 24 
CFR 203.402(f) are suspended.

FOR FURTHER INFORMATION CONTACT:
Joseph McCloskey, Director, Single Family Servicing Division, Room 
9178, Department of Housing and Urban Development, 451 7th Street, SW., 
Washington, DC 20410, (202) 708-1672, or, TTY for hearing and speech 
impaired, (202) 708-4594. (These are not toll-free numbers).

SUPPLEMENTARY INFORMATION: In an interim rule published on July 3, 1996 
(61 FR 35014) to implement loss mitigation procedures under section 407 
of The Balanced Budget Downpayment Act, I (Pub. L. 104-99, approved 
January 26, 1996) (Downpayment Act), delayed implementation dates were 
included for provisions in two sections so that HUD would be able to 
consider and address any public comments on these provisions before the 
prescribed implementation date. The reduction from nine to six months 
for taking action upon default of a mortgage in Sec. 203.355(a), and 
the amendment to Sec. 203.402(f) to permit varying the percentage of 
foreclosure costs or the costs of acquiring a property that are 
reimbursed, were made to apply only after March 1, 1997.
    HUD has determined that it is appropriate to delay the 
implementation of these provisions until the publication of a final 
rule. Section 203.355(a) provides, in part, that ``where the date of 
default is on or after March 1, 1997, the mortgagee shall take one of 
the following actions within six months of the date of default or 
within such additional time approved by HUD[.]'' Section 203.402(f) 
provides, in part, that: ``For mortgages insured on or after March 1, 
1997, the Secretary will reimburse a percentage of foreclosure costs or 
costs of acquiring the property, which percentage shall be determined 
in accordance with such conditions as the Secretary shall prescribe.''
    Accordingly, HUD is providing notice that is suspending the 
provision contained in the last sentence of the introductory text of 
paragraph (a) of Sec. 203.355 that reduces the foreclosure initiation 
time frame from nine months to six months for mortgages where the 
default date is on or after March 1, 1997. This will leave in place the 
nine-month time frame in effect prior to the July 3, 1996 interim rule 
until HUD issues a final rule.
    In addition, HUD is providing notice that it is suspending the 
provision contained in the second sentence of Sec. 203.402(f) that 
permits HUD to vary the percentage of foreclose costs or costs of 
acquiring the property otherwise reimbursed for mortgages insured on or 
after March 1, 1997. Under this suspension, HUD will continue to 
reimburse foreclosure costs or costs of acquiring the property 
otherwise (including costs of acquiring the property by the mortgagee 
and of conveying and evidencing title to the property to HUD, but not 
including any costs borne by the mortgagee to correct title defects) 
actually paid by the mortgagee and approved by HUD, in an amount not in 
excess of two-thirds of such costs or $75, whichever is the greater. 
This will leave in place the reimbursement rate in effect prior to the 
July 3, 1996 interim rule until HUD issues a final rule.

    Dated: February 28, 1997.
Nicolas P. Retsinas,
Assistant Secretary for Housing-Federal Housing Commissioner.
[FR Doc. 97-5457 Filed 2-28-97; 3:55 pm]
BILLING CODE 4210-27-M