[Federal Register Volume 64, Number 121 (Thursday, June 24, 1999)]
[Rules and Regulations]
[Pages 34106-34107]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-16133]



[[Page 34105]]

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Part VI





Department of Housing and Urban Development





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24 CFR Part 320



Ginnie Mae MBS Program: Book-Entry Securities; Final Rule

  Federal Register / Vol. 64, No. 121 / Thursday, June 24, 1999 / Rules 
and Regulations  

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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

24 CFR Part 320

[Docket No. FR-4331-F-02]
RIN 2503-AA12


Ginnie Mae MBS Program: Book-Entry Securities

AGENCY: Government National Mortgage Association, HUD.

ACTION: Final rule.

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SUMMARY: This rule makes final the interim rule published on September 
24, 1998, which revised the security issuance procedures for the 
Government National Mortgage Association (``Ginnie Mae''). Under the 
revised procedures, a certificated security is no longer issued for a 
book-entry security. Currently, certificated securities are issued only 
upon the request of the registered holder. The interim rule revised two 
sections of part 320 to reflect this change. This final rule 
accommodates the one public comment received.

DATES: Effective Date: July 26, 1999.

FOR FURTHER INFORMATION CONTACT: Thomas R. Weakland, Vice President, 
Office of Program Administration, Government National Mortgage 
Association, Room 6204, Department of Housing and Urban Development, 
451 Seventh Street SW, Washington, DC 20410-0500. Telephone (202) 708-
2884 (voice). For hearing-and speech-impaired persons, this number may 
be accessed via TTY by calling the Federal Relay Service at 1-800-877-
8339.

SUPPLEMENTARY INFORMATION: The Government National Mortgage Association 
(``Ginnie Mae'') guarantees mortgage-backed securities of approved 
issuers. On September 24, 1998, Ginnie Mae published an interim rule 
which revised Ginnie Mae's security issuance procedures to adopt a true 
book-entry system for the securities that it guarantees, instead of the 
current system under which a certificated security is issued and 
stored. Accordingly, the interim rule revised Sec. 320.5 to: (1) Revise 
paragraph (a) to indicate that only physical securities will specify 
payment and maturity dates; (2) indicate the date on and after which 
physical securities will be issued only at the request of the 
registered holder; and (3) establish when Ginnie Mae considers a book-
entry security to be guaranteed. The interim rule also revised the 
language of Sec. 320.13 to conform with the book-entry system. The 
interim rule was effective for securities issued on or after November 
1, 1998.
    The September 24, 1998 interim rule received one public comment. 
The commenter, a depository, pointed out the need for certainty in 
determining when delivery of uncertificated book-entry securities 
occurs. This final rule revises the interim rule to accommodate the 
public comment and to make other minor language changes. In addition, 
Ginnie Mae is delaying the uncertificated book-entry process for serial 
notes and securities backed by multifamily mortgage pools.

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 final rule, and in so 
doing certifies that this rule will not have a significant economic 
impact on a substantial number of small entities. Ginnie Mae's 
designated depository is the only entity affected by this revision, and 
the designated depository is not a small entity. The final rule will 
have no adverse or disproportionate economic impact on small 
businesses.

Environmental Impact

    This rulemaking is exempt from the environmental review procedures 
under HUD regulations in 24 CFR part 50 that implement section 
102(2)(C) of the National Environmental Policy Act of 1969 (42 U.S.C. 
4332) because of the exemption under 24 CFR 50.19(c)(1) which pertains 
to ``the approval of policy documents that do not direct, provide for 
assistance or loan and mortgage insurance for, or otherwise govern or 
regulate property acquisition, disposition, lease, rehabilitation, 
alteration, demolition, or new construction, or set out to provide for 
standards for construction or construction materials, manufactured 
housing, or occupancy.'' This rulemaking simply amends existing 
regulations regarding the form of guaranteed securities.

Executive Order 12612, Federalism

    The General Counsel, as the Designated Official under section 6(a) 
of Executive Order 12612, Federalism, has determined that this final 
rule will 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 will result from this final rule that 
would 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 
final 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 for 24 CFR Part 320

    Mortgages.

    Accordingly, the interim rule published at 63 FR 51250, amending 24 
CFR part 320 is adopted as final with the following changes:

PART 320--GUARANTY OF MORTGAGE-BACKED SECURITIES

    1. The authority citation for 24 CFR part 320 continues to read as 
follows:

    Authority: 12 U.S.C. 1721(g) and 1723a(a); and 42 U.S.C. 
3535(d).

    2. Section 320.5 is amended by revising the last sentence of 
paragraph (a), paragraphs (e) and (f), and by adding paragraph (g) to 
read as follows:


Sec. 320.5  Securities.

    (a) * * * The securities, if issued in certificated form, must 
specify the dates by which payments are to be made to the holders 
thereof, and must indicate the accounting period for collections on the 
pool's mortgages relating to each such payment, and the securities, if 
issued in certificated form, must also specify a date on which the 
entire principal will have been paid or will be payable.
* * * * *
    (e) Issue date. Securities with issue dates of October 1, 1998, or 
before, have been issued in certificated form. Except for serial note 
securities and securities backed by multifamily mortgage pools, 
securities with issue dates of November 1, 1998, or thereafter, will be 
issued initially in uncertificated, book-entry form. Following initial 
issuance, certificated securities will be issued in exchange for 
uncertificated securities at the request of the registered holder and 
upon payment of any required fee. Serial notes and securities backed by 
multifamily mortgage pools will continue to be issued in certificated 
form until the applicable MBS Guide provides otherwise.
    (f) Delivery. Delivery of uncertificated securities occurs when the 
book-entry

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depository's nominee is registered as the registered owner of the 
securities on Ginnie Mae's central registry.
    (g) Guaranty. The Ginnie Mae guaranty of uncertificated securities 
becomes effective when the book-entry depository's nominee is 
registered as the registered owner of the securities on Ginnie Mae's 
central registry.

(Approved by the Office of Management and Budget under control 
number 2503-0009)

    3. Section 320.13 is revised to read as follows:


Sec. 320.13  Guaranty.

    The Association guarantees the timely payment, whether or not 
collected, of the interest on the outstanding balance and the specified 
principal installments on securities that are registered on Ginnie 
Mae's central registry. The Association's guaranty is backed by the 
full faith and credit of the United States.

    Dated: June 18, 1999.
George S. Anderson,
Executive Vice President, Government National Mortgage Association.
[FR Doc. 99-16133 Filed 6-23-99; 8:45 am]
BILLING CODE 4210-01-P