[Federal Register Volume 63, Number 22 (Tuesday, February 3, 1998)]
[Proposed Rules]
[Pages 5660-5661]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-2621]
[[Page 5659]]
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Part IV
Department of Housing and Urban Development
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24 CFR Part 203
Suspension of Authority To Insure New FHA Single Family Mortgages on
Indian Reservations Pursuant to Section 248 of the National Housing
Act; Proposed Rule
Federal Register / Vol. 63, No. 22 / Tuesday, February 3, 1998 /
Proposed Rules
[[Page 5660]]
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
24 CFR Part 203
[Docket No. FR-4251-P-01]
RIN 2502-AH00
Suspension of Authority To Insure New FHA Single Family Mortgages
on Indian Reservations Pursuant to Section 248 of the National Housing
Act
AGENCY: Office of the Assistant Secretary for Housing--Federal Housing
Commissioner, HUD.
ACTION: Proposed rule.
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SUMMARY: This rule proposes to suspend the authority of the HUD
Secretary to provide FHA insurance pursuant to section 248 of the
National Housing Act for mortgage loans made for the financing of
single family homes on Indian reservations. The suspension would be in
effect whenever authority is available to the Department to guarantee
additional loans under its Indian Housing Loan Guarantee program
authorized by section 184 of the Housing and Community Development Act
of 1992. The rule would suspend a program that has not been effective
in promoting housing opportunities for Native Americans and permit HUD
to focus scarce resources on the similar section 184 program, whenever
authority under that program is available. In recent fiscal years the
Department has received annually a limited amount of additional
authority to guarantee new loans under section 184. If that pattern is
not continued, or if the available section 184 authority is otherwise
exhausted, the Department would resume mortgage insurance under the
section 248 program.
DATES: Comment due date: April 6, 1998.
ADDRESSES: Interested persons are invited to submit comments regarding
this proposed rule to the Rules Docket Clerk, room 10276, Office of
General Counsel, Department of Housing and Urban Development, 451
Seventh Street, SW, Washington, DC 20410-0500. Comments should refer to
the above docket number and title. An original and four copies of
comments should be provided. A copy of each comment submitted will be
available for public inspection and copying during regular business
hours at the above address. Facsimile (FAX) comments are not
acceptable.
FOR FURTHER INFORMATION CONTACT: John J. Coonts, Office of the Insured
Single Family Housing, Room 9162, Department of Housing and Urban
Development, 451 Seventh Street, SW, Washington, DC 20410. Telephone:
(202) 708-3046. (This is not a toll-free number.) For hearing-and
speech-impaired persons, this number may be accessed via TTY by calling
the Federal Information Relay Service at 1-800-877-8339.
SUPPLEMENTARY INFORMATION:
Background
The mortgage insurance program for mortgages on Indian reservations
was initially authorized under the Housing and Urban--Rural Recovery
Act of 1983, which added Section 248 to the National Housing Act. The
Department implemented the program by a final rule (51 FR 21871, June
16, 1986) that added several new provisions to 24 CFR part 203,
including new Secs. 203.43h, 203.438 and 203.664 and amendments to
Secs. 203.350 and 203.604.
The new program was intended to encourage mortgage lenders to
extend loans on Indian reservations and other trust or restricted land
(``Indian land''). Indian land is generally subject to restraints
against alienation and other title issues, and mortgage lenders are
reluctant to make mortgage loans because of the extreme difficulty in
bringing and completing a foreclosure action, if the mortgagor
defaults. Because FHA generally requires a mortgagee to convey good
marketable title to the HUD Secretary in presenting a claim for
insurance, and good marketable title is difficult or impossible to
obtain as a result of a foreclosure on Indian land, mortgage lenders
were hesitant to make such mortgage loans.
Section 248 provided ways to mortgagees to overcome these title and
claim issues, primarily by providing the lender with a right to assign
a defaulted mortgage to the HUD Secretary, but the program has always
operated at a very low volume. The Clinton Administration has made
extensive efforts over the past four years to publicize the program and
encourage its use. Mortgage lenders and Native Americans, however, have
found another similar HUD program--the section 184 loan guarantee
program--to be more attractive based on the large volume of loans made
in comparison to the history of section 248. Thus, the Department
believes it is smart management to apply its resources to a program
that works and accomplishes the same goals. Section 184 has proven to
be substantially more effective in providing housing opportunities for
Native Americans. Under a Memorandum of Understanding, the HUD Office
of Insured Single Family Housing will provide support to the HUD Office
of Native American Programs to assure that the lending community and
Native Americans have adequate access to information about Section 184.
The Department proposes to amend Sec. 203.43h to suspend new
insurance, excepting only cases with a HUD conditional commitment or DE
underwriter's Statement of Appraised Value issued no later than 90 days
after the effective date of the final rule, as long as the Department
has authority to guarantee new loans under its section 184 program.
Insurance for streamlined refinancing would continue to be available
for any mortgage that has been insured under section 248.
Findings and Certifications
Regulatory Flexibility Act
The Secretary, in accordance with the Regulatory Flexibility Act (5
U.S.C. 605(b)), has reviewed and approved this proposed rule, and in so
doing certifies that this proposed rule does not have a significant
economic impact on a substantial number of small entities. The proposed
rule merely suspends new insurance for a program that has no
significant volume, whenever the Department has guarantee authority
under the similar but more successful section 184 program. Any lenders
that participated in the suspended program can easily qualify to
participate under the section 184 program. The proposed rule has no
adverse or disproportionate economic impact on small businesses. Small
entities are specifically invited, however, to comment on whether this
proposed rule will significantly affect them, and persons are invited
to submit comments according to the instructions in the DATES and
ADDRESSES sections in the preamble of this proposed rule.
Environmental Impact
A Finding of No Significant Impact with respect to the environment
has been made in accordance with HUD regulations at 24 CFR part 50,
which implements section 102(2)(C) of the National Environmental Policy
Act of 1969. The Finding of No Significant Impact is available for
public inspection between 7:30 a.m. and 5:30 p.m. weekdays in the
Office of the Rules Docket Clerk.
Executive Order 12612, Federalism
The General Counsel, as the Designated Official under Section 6(a)
of Executive Order 12612, Federalism, has determined that this proposed
rule
[[Page 5661]]
would not have substantial direct effects on States or their political
subdivisions, or the relationship between the Federal government and
the States, or on the distribution of power and responsibilities among
the various levels of government. No programmatic or policy changes
would result from this proposed rule that affect the relationship
between the Federal Government and State and local governments.
Unfunded Mandates Reform Act
Title II of the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-
4; approved March 22, 1995) (UMRA) establishes requirements for Federal
agencies to assess the effects of their regulatory actions on State,
local, and tribal governments, and on the private sector. This proposed
rule does not impose any Federal mandates on any State, local, or
tribal governments, or on the private sector, within the meaning of the
UMRA.
List of Subjects in Part 203
Loan programs--housing and community development, Mortgage
insurance, Reporting and recordkeeping requirements.
Accordingly, the Department proposes to amend part 203 of Title 24
of the Code of Federal Regulations as follows:
PART 203--SINGLE FAMILY MORTGAGE INSURANCE
1. The authority citation for 24 CFR part 203 continues to read as
follows:
Authority: 12 U.S.C. 1709, 1710, 1715b, and 1715u; 42 U.S.C.
3535(d).
2. Section 203.43h is amended by revising the introductory text to
read as follows:
Sec. 203.43h Eligibility of mortgages on Indian land insured pursuant
to Section 248 of the National Housing Act.
No mortgage will be insured pursuant to section 248 of the National
Housing Act unless the Secretary determined that there is no available
authority to guarantee a mortgage under section 184 of the Housing and
Community Development Act of 1992, or before [a date of 90 days after
the effective date of final rule will be inserted in the final rule]
the Secretary issued a conditional commitment or a Direct Endorsement
underwriter issued a Statement of Appraised Value in connection with
the mortgage. If insurance is available under the preceding sentence, a
mortgage covering a one-to-four family residence located on Indian land
shall be eligible for insurance pursuant to section 248 of the National
Housing Act (12 U.S.C. 1715z-13), notwithstanding otherwise applicable
requirements related to marketability of title, if the mortgage meets
the requirements of this subpart as modified by this section and is
made by an Indian tribe, or on a leasehold estate by an Indian who will
occupy it as a principal residence. Mortgage insurance on cooperative
shares is not authorized under this section.
* * * * *
Dated: December 10, 1997.
Nicolas P. Retsinas,
Assistant Secretary for Housing--Federal Housing Commissioner.
[FR Doc. 98-2621 Filed 2-2-98; 8:45 am]
BILLING CODE 4210-27-P