[Federal Register Volume 64, Number 19 (Friday, January 29, 1999)]
[Rules and Regulations]
[Pages 4768-4770]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-2182]
[[Page 4767]]
_______________________________________________________________________
Part V
Department of Housing and Urban Development
_______________________________________________________________________
24 CFR Parts 200 and 207
Electronic Submission of Required Data by Multifamily Mortgagees to
Report Mortgage Delinquencies, Defaults, Reinstatements, Assignment
Elections, and Withdrawals of Assignment Elections; Final Rule
Federal Register / Vol. 64, No. 19 / Friday, January 29, 1999 / Rules
and Regulations
[[Page 4768]]
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
24 CFR Parts 200 and 207
[Docket No. FR-4303-F-02]
RIN 2502-AH11
Electronic Submission of Required Data by Multifamily Mortgagees
To Report Mortgage Delinquencies, Defaults, Reinstatements, Assignment
Elections, and Withdrawals of Assignment Elections
AGENCY: Office of the Assistant Secretary for Housing-Federal Housing
Commissioner, HUD.
ACTION: Final rule.
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SUMMARY: This rule requires mortgagees that hold or service multifamily
mortgages insured by HUD to submit certain data electronically to HUD
in a HUD prescribed format. Electronic submission is necessary because
the manual submission of HUD forms has become a burden to servicing
mortgagees, as well as to HUD. This rule applies to all multifamily
mortgagees in their responsibility to report mortgage delinquencies,
mortgage defaults, mortgage reinstatements, elections to assign
mortgages to HUD, and withdrawal of assignment elections.
EFFECTIVE DATE: March 1, 1999.
FOR FURTHER INFORMATION CONTACT: Willie Spearmon, Director, Office of
Business Products, Room 6134, Department of Housing and Urban
Development, 451 Seventh Street, SW, Washington, DC 20410, telephone
(202) 708-3000 (this is not a toll-free number). Individuals with
hearing or speech impairments may access this number via TTY by calling
the Federal Information Relay Service at (800) 877-8339 (this is a
toll-free number).
SUPPLEMENTARY INFORMATION:
I. Background
HUD obtains data regarding the status of delinquent insured
mortgage loans on multifamily projects by using Form HUD-92426,
Multifamily Default Status Report. HUD needs the information submitted
on the form in order to monitor mortgage loans for which the mortgagees
are experiencing payment or other difficulties. In accordance with the
requirements of 24 CFR part 207, the mortgagee must prepare and sign
this form under the specified circumstances and mail it to HUD. When
HUD receives the form, it must sign it and return it to the mortgagee
to acknowledge receipt of the form.
To replace this burdensome paperwork process, HUD has developed a
method for mortgagees to submit the data currently collected on Form
HUD-92426, as well as to report the date of the mortgagees' last
physical inspection of the project, using the Internet. According to
this new method, the mortgagee will electronically submit the data to
HUD, after which an electronic receipt will automatically be returned.
HUD will provide, at no cost to mortgagees, ``stand alone'' software
and technical support for that software, which is designed to run on
IBM-compatible personal computers (PCs). Mortgagees will, however, need
to provide their own PCs and Internet connections. Mortgagees that do
not choose to initiate Internet access for themselves may contract with
another entity or individual to act on their behalf to report the data
electronically. HUD believes that this is not likely to be necessary in
most cases.
One of HUD's primary concerns is the costs mortgagees may incur in
establishing Internet access if they have not already done so. For this
reason, HUD has decided to allow for a staggered implementation of this
rulemaking, under which smaller mortgagees will have more time to
comply with the new electronic reporting requirements. HUD believes,
however, that electronic tracking of the default and reinstatement data
generally will reduce costs for mortgagees. HUD has field-tested
electronic submission of this data on a voluntary pilot basis with a
number of mortgagees, and has received generally favorable responses.
While HUD hopes to begin implementing the electronic reporting
requirements in this rule right away (in accordance with the staggered
implementation schedule in Sec. 200.121 of this rule), HUD encourages
mortgagees to comply with these requirements voluntarily to the extent
possible, in order for the mortgagees and HUD to realize an early
advantage of cost savings.
II. May 13, 1998 Proposed Rule
HUD published a proposed rule on May 13, 1998 (63 FR 26702) to
solicit public comments on the electronic submission of required data
by multifamily mortgagees, as described above. The deadline for public
comments was July 13, 1998. HUD received no public comments in response
to the proposed rule. This final rule adopts, therefore, the provisions
of the proposed rule without change.
III. Regulatory Amendments
This document amends the regulations in 24 CFR parts 200 and 207
related to multifamily housing mortgage insurance, in order to require
mortgagees with insured multifamily mortgage loans to submit
information reporting mortgage delinquencies, defaults, reinstatements,
assignment elections, and withdrawals of assignment elections
electronically, rather than in writing on Form HUD-92426. Specifically,
this rule amends the regulations as follows:
(1) This rule adds a new subpart B to part 200, entitled
``Electronic Submission of Required Data for Mortgage Defaults and
Mortgage Insurance Claims for Insured Multifamily Mortgages.'' The
provision in this new subpart B requires multifamily mortgagees to
submit the data electronically, and it provides the staggered schedule
of effectiveness. As mentioned above, HUD will allow smaller mortgagees
(i.e., those with fewer insured mortgage loans) more time to comply
with the electronic submission requirements. This new subpart also
provides for an exception to the electronic submission requirements,
subject to HUD approval, for very small mortgagees for which compliance
would represent a financial hardship.
(2) This document also makes several conforming changes to the
current requirements in part 207. In Sec. 207.256, which requires
mortgagees to notify HUD of defaults, this document requires mortgagees
to notify HUD in the manner prescribed in the new subpart B of part
200, rather than in writing. This document similarly amends
Sec. 207.256a, which requires mortgagees to notify HUD if a mortgage
loan is reinstated, and Sec. 207.258, which requires mortgagees to
notify HUD if they elect to assign a mortgage to HUD or to acquire a
property and convey title to HUD.
IV. Other Matters
Paperwork Burden
The information collection requirements contained in this rule have
been approved by the Office of Management and Budget (OMB) in
accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-
3520), and assigned OMB control number 2502-0041. An agency may not
conduct or sponsor, and a person is not required to respond to, a
collection of information unless the collection displays a valid
control number.
Regulatory Flexibility Act
The Secretary, in accordance with the Regulatory Flexibility Act (5
U.S.C. 605(b)), has reviewed this rule before publication and by
approving it certifies
[[Page 4769]]
that this rule will not have a significant economic impact on a
substantial number of small entities. The electronic submission
requirements in this rule should reduce burden and costs for all
mortgagees. As stated above, HUD will also reduce the burden on
mortgagees by providing the software and technical support necessary to
facilitate the electronic submission requirements. HUD has determined,
therefore, that this rule will not have a significant economic impact
on a substantial number of small entities.
Environmental Impact
This rule is categorically excluded from environmental review under
the National Environmental Policy Act (42 U.S.C. 4321). The addition to
part 200 of the new subpart B falls within the exclusion provided by 24
CFR 50.19(c)(1), in that it does not direct, provide for assistance or
loan and mortgage insurance for, or otherwise govern or regulate, real
property acquisition, disposition, leasing, rehabilitation, alteration,
demolition, or new construction, or establish, revise, or provide for
standards for construction or construction materials, manufactured
housing, or occupancy. The amendments to part 207 are categorically
excluded under 24 CFR 50.19(c)(2), because they amend an existing
document, and the existing document as a whole does not fall within the
exclusion in 24 CFR 50.19(c)(1), but the amendments by themselves do
so.
Executive Order 12612, Federalism
The General Counsel, as the Designated Official under section 6(a)
of Executive Order 12612, Federalism, has determined that the policies
contained in this rule will not have substantial direct effects on
States or their political subdivisions, on the relationship between the
Federal Government and the States, or on the distribution of power and
responsibilities among the various levels of government. This rule
relates only to the manner in which mortgagees submit required
information to HUD, and it does not affect the federalism concerns
addressed in the Order. As a result, this rule is not subject to review
under the Order.
Catalog of Federal Domestic Assistance
The Catalog of Federal Domestic Assistance number is 14.155.
List of Subjects
24 CFR Part 200
Administrative practice and procedure, Claims, Equal employment
opportunity, Fair housing, Home improvement, Housing standards, Lead
poisoning, Loan programs--housing and community development, Minimum
property standards, Mortgage insurance, Organization and functions
(Government agencies), Penalties, Reporting and recordkeeping
requirements, Social security, Unemployment compensation, Wages.
24 CFR Part 207
Manufactured homes, Mortgage insurance, Reporting and recordkeeping
requirements, Solar energy.
Accordingly, 24 CFR Chapter II is amended as follows:
PART 200--INTRODUCTION TO FHA PROGRAMS
1. The authority citation for 24 CFR part 200 continues to read as
follows:
Authority: 12 U.S.C. 1701-1715z-18; 42 U.S.C. 3535(d).
2. In part 200, a new subpart B, consisting of Secs. 200.120
through 200.121, is added to read as follows:
Subpart B--Electronic Submission of Required Data for Mortgage Defaults
and Mortgage Insurance Claims for Insured Multifamily Mortgages
Sec.
200.120 Purpose and applicability.
200.121 Requirements and effectiveness.
Sec. 200.120 Purpose and applicability.
(a) Purpose. The purpose of this subpart B is to require mortgagees
of all multifamily projects whose mortgages are insured or coinsured by
HUD to submit electronically information regarding mortgage
delinquencies, defaults, reinstatements, elections to assign, and
withdrawals of assignment elections, and related information, as that
information is required by 24 CFR part 207 and Form HUD-92426 (which is
available at the Department of Housing and Urban Development, HUD
Customer Service Center, 451 7th Street, SW, Room B-100, Washington, DC
20410; telephone (800) 767-7468).
(b) Applicability. This subpart applies to all HUD multifamily
mortgage insurance and coinsurance programs.
Sec. 200.121 Requirements and effectiveness.
(a) Multifamily mortgagees, which are required by 24 CFR part 207
to report mortgage delinquencies, defaults, reinstatements, assignment
elections, withdrawals of assignment elections, and related
information, must submit this information electronically, over the
Internet, in accordance with the following schedule of effectiveness:
(1) Mortgagees having 70 or more insured mortgage loans must comply
with this section by no later than March 1, 1999;
(2) Mortgagees having from 26 to 69 insured mortgage loans must
comply with this section by no later than January 1, 2000;
(3) Mortgagees having from 11 to 25 insured mortgage loans must
comply with this section by no later than January 1, 2001;
(4) Mortgagees having 10 or fewer insured mortgage loans must
comply with this section by no later than January 1, 2002.
(b) Exception. On or after January 1, 2002, mortgagees that hold or
service fewer than 10 multifamily mortgages may continue to report
mortgage delinquencies, defaults, reinstatements, assignment elections,
withdrawals of assignment elections, and related information in writing
on Form HUD-92426 only with specific HUD approval. HUD will grant such
approval, upon application by the mortgagee, for reasons of hardship
due to insufficient financial resources to purchase the required
hardware and Internet access.
(c) HUD will not accept reports of information regarding defaults,
reinstatements, assignment elections, and related information in a
manner that is not in accordance with this section. Failure on the part
of mortgagees to report this information as required by 24 CFR part 207
and this section may result in HUD's application of the sanctions and
surcharges specified in 24 CFR part 207.
PART 207--MULTIFAMILY HOUSING MORTGAGE INSURANCE
3. The authority citation for 24 CFR part 207 continues to read as
follows:
Authority: 12 U.S.C. 1701z-11(e), 1713, and 1715b; 42 U.S.C.
3535(d).
4. Section 207.256 is revised to read as follows:
Sec. 207.256 Notice.
(a) If the default as defined in Sec. 207.255 is not cured within
the 30 days grace period, the mortgagee must, within 30 days
thereafter, notify the Commissioner of such default, in the manner
prescribed in 24 CFR part 200, subpart B.
(b) Notwithstanding Sec. 207.255(a)(2), the mortgagee must give
notice to the Commissioner, in the manner prescribed in 24 CFR part
200, subpart B, of the failure of the mortgagor to comply with such
covenant, regardless of the fact the mortgagee may not have elected to
accelerate the debt.
5. Section 207.256a is revised to read as follows:
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Sec. 207.256a Reinstatement of defaulted mortgage.
If, after default and prior to the completion of foreclosure
proceedings, the mortgagor cures the default, the insurance shall
continue as if a default had not occurred, provided the mortgagee gives
notice of reinstatement to the Commissioner, in the manner prescribed
in 24 CFR part 200, subpart B.
6. Section 207.258 is amended by revising paragraphs (a) and
(b)(1), to read as follows:
Sec. 207.258 Insurance claim requirements.
(a) Alternative election by mortgagee. When the mortgagee becomes
eligible to receive mortgage insurance benefits pursuant to
Sec. 207.255(c), it must, within 45 days thereafter, give the
Commissioner notice, in the manner prescribed in 24 CFR part 200,
subpart B, of its intention to file an insurance claim and of its
election either to assign the mortgage to the Commissioner, as provided
in paragraph (b) of this section, or to acquire and convey title to the
Commissioner, as provided in paragraph (c) of this section.
(b) * * *
(1) Notice of assignment. On the date the assignment of the
mortgage is filed for record, the mortgagee must notify the
Commissioner, in the manner prescribed in 24 CFR part 200, subpart B,
of such assignment, and must also notify the FHA Comptroller by
telegram of such recordation.
* * * * *
Dated: January 22, 1999.
William C. Apgar,
Assistant Secretary for Housing--Federal Housing Commissioner
[FR Doc. 99-2182 Filed 1-28-99; 8:45 am]
BILLING CODE 4210-27-P