[Federal Register Volume 62, Number 53 (Wednesday, March 19, 1997)]
[Rules and Regulations]
[Pages 12952-12953]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-6860]


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

DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

24 CFR Part 206

[Docket No. FR-2958-F-07]
RIN 2502-AF32


Home Equity Conversion Mortgage Insurance Demonstration: 
Additional Streamlining; Correction

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

ACTION: Final rule; Correction.

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

SUMMARY: On September 17, 1996 (61 FR 49030), the Department issued a 
final rule to the changes proposed on May 10, 1996, to the Home Equity 
Conversion Mortgage (HECM) Insurance Demonstration. The final rule had 
an effective date of October 17, 1996, except that the amendment to the 
definition of ``principal limit'' in Sec. 206.3, had a delayed 
effective date of January 5, 1997. On December 26, 1996 (61 FR 67930), 
the Department further delayed the effective date of the definition of 
``principal limit'' in Sec. 206.3 until May 1, 1997, but inadvertently 
did not change the date as it was set forth within the definition in 
two places. Today's notice corrects the references to the date 
contained in the definition of ``principal limit,'' as it was set forth 
in the December 26, 1996 publication to conform to the intent of the 
December

[[Page 12953]]

26, 1996 notice. Today's notice also makes two other technical 
corrections to conform with the intent of the September 17, 1996 final 
rule.

DATES: Effective date of this document: December 26, 1996.
    Effective date for amended definition of ``principal limit'' in 
Sec. 206.3: May 1, 1997.

FOR FURTHER INFORMATION CONTACT: Mark W. Holman, Acting Director, Home 
Mortgage Insurance Division, Office of Insured Single Family Housing, 
Room number 9270, Department of Housing and Urban Development, 451 
Seventh Street, SW, Washington, DC 20410, telephone (202) 708-2121; TTY 
(202) 708-4594. (These are not toll-free telephone numbers.)

SUPPLEMENTARY INFORMATION: The September 17, 1996 final rule issued by 
the Department delayed the effective date for the amendment to the 
definition of ``principal limit'' in Sec. 206.3 until January 5, 1997. 
The December 26, 1996 document further delayed the effective date for 
the definition of ``principal limit'' in Sec. 206.3, until May 1, 1997, 
but inadvertently neglected to change the date references within the 
definition in two places. The correct date references of May 1, 1997 
are being substituted through this correction notice. This notice also 
corrects the definition of ``principal limit,'' as it was set forth in 
the September 17, 1996 final rule by changing ``unless'' in the fifth 
sentence to ``if'' so that the definition clearly applies the changed 
method of calculating principal limit to mortgages executed on or after 
May 1, 1997, as was intended by the September 17, 1996 final rule. In 
addition, this notice corrects the sixth sentence of the definition of 
``principal limit,'' as it was set forth in the September 17, 1996 
final rule to add the words ``each month'' after ``increases'' and the 
words ``one-twelfth of'' after ``rate equal to.''
    Accordingly, in FR Doc. 96-23717, on page 49032, the definition of 
``principal limit'' in Sec. 206.3, as set forth in the final rule 
published on September 17, 1996, at 61 FR 49030, is corrected to read 
as follows:


Sec. 206.3  Definitions.

* * * * *
    Principal limit means the maximum disbursement that could be 
received in any month under a mortgage, assuming that no other 
disbursements are made, taking into account the age of the youngest 
mortgagor, the mortgage interest rate, and the maximum claim amount. 
Mortgagors over the age of 95 will be treated as though they are 95 for 
purposes of calculating the principal limit. The principal limit is 
used to calculate payments to a mortgagor. It is calculated for the 
first month that a mortgage could be outstanding using factors provided 
by the Secretary. It increases each month thereafter at a rate equal to 
one-twelfth of the mortgage interest rate in effect at that time, plus 
one-twelfth of one-half percent per annum, if the mortgage was executed 
on or after May 1, 1997. If the mortgage was executed before May 1, 
1997, the principal limit increases each month at a rate equal to one-
twelfth of the expected average mortgage interest rate plus one-twelfth 
of one-half percent per annum. The principal limit may decrease because 
of insurance or condemnation proceeds applied to the mortgage balance 
under Sec. 209.209(b) of this chapter.
* * * * *
    Dated: March 13, 1997.
Nicolas P. Retsinas,
Assistant Secretary for Housing-Federal Housing Commissioner.
[FR Doc. 97-6860 Filed 3-18-97; 8:45 am]
BILLING CODE 4210-27-P