[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]



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Part V





Department of Housing and Urban Development





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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

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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