[Federal Register Volume 69, Number 187 (Tuesday, September 28, 2004)]
[Notices]
[Pages 57932-57934]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-21687]


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FEDERAL TRADE COMMISSION


Agency Information Collection Activities; Proposed Collection; 
Comment Request; Extension

AGENCY: Federal Trade Commission (``FTC'').

ACTION: Notice.

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SUMMARY: The information collection requirements described below will 
be submitted to the Office of Management and Budget (``OMB'') for 
review, as required by the Paperwork Reduction Act (``PRA''). The FTC 
is seeking public comments on its proposal to extend through December 
31, 2005 the current PRA clearance for information collection 
requirements for its Mortgage Disclosure Study. That clearance expires 
on November 30, 2004.

DATES: Comments must be submitted on or before November 29, 2004.

ADDRESSES: Interested parties are invited to submit written comments. 
Comments should refer to ``Mortgage Disclosure Study--FTC File No. 
P025505,'' to facilitate the organization of comments. A comment filed 
in paper form should include this reference both in the text and on the 
envelope and should be mailed or delivered to the following address: 
Federal Trade Commission/Office of the Secretary, Room H-159 (Annex X), 
600 Pennsylvania Avenue, NW., Washington, DC 20580. The FTC is 
requesting that any comment filed in paper form be sent by courier or 
overnight service, if possible, because U.S. postal mail in the 
Washington area and at the Commission is subject to delay due to 
heightened security precautions. Alternatively, comments may be filed 
in electronic form (in ASCII format, WordPerfect, or Microsoft Word) as 
part of or as an attachment to e-mail messages directed to the 
following e-mail box: [email protected]. If the comment contains any 
material for which confidential treatment is requested, it must be 
filed in paper form, and the first page of the document must be clearly 
labeled ``Confidential.''\1\
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    \1\ Commission Rule 4.2(d), 16 CFR 4.2(d). The comment must be 
accompanied by an explicit request for confidential treatment, 
including the factual and legal basis for the request, and must 
identify the specific portions of the comment to be withheld from 
the public record. The request will be granted or denied by the 
Commission's General Counsel, consistent with applicable law and the 
public interest. See Commission Rule 4.9(c), 16 CFR 4.9(c).
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    The FTC Act and other laws the Commission administers permit the 
collection of public comments to consider and use in this proceeding as

[[Page 57933]]

appropriate. All timely and responsive public comments will be 
considered by the Commission, and will be available to the public on 
the FTC Web site, to the extent practicable, at http://www.ftc.gov. As 
a matter of discretion, the FTC makes every effort to remove home 
contact information for individuals from the public comments it 
receives before placing those comments on the FTC Web site. More 
information, including routine uses permitted by the Privacy Act, may 
be found in the FTC's privacy policy, at http://www.ftc.gov/ftc/
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privacy.htm.

FOR FURTHER INFORMATION CONTACT: Requests for additional information 
should be addressed to James M. Lacko, Economist, Bureau of Economics, 
Federal Trade Commission, 600 Pennsylvania Avenue, NW., Washington, DC 
20580. Telephone: (202) 326-3387; e-mail [email protected].

SUPPLEMENTARY INFORMATION: Under the PRA (44 U.S.C. 3501-3520), Federal 
agencies must obtain approval from OMB for each collection of 
information they conduct or sponsor. ``Collection of information'' 
means agency requests or requirements that members of the public submit 
reports, keep records, or provide information to a third party. 44 
U.S.C. 3502(3), 5 CFR 1320.3(c). As required by section 3506(c)(2)(A) 
of the PRA, the FTC is providing this opportunity for public comment 
before requesting that OMB extend the existing paperwork clearance for 
the Mortgage Disclosure Study (OMB Control Number 3084-0126).
    The FTC invites comments on: (1) Whether the proposed collection of 
information is necessary for the proper performance of the functions of 
the agency, including whether the information will have practical 
utility; (2) the accuracy of the agency's estimate of the burden of the 
proposed collection of information, including the validity of the 
methodology and assumptions used; (3) ways to enhance the quality, 
utility, and clarity of the information to be collected; and (4) ways 
to minimize the burden of the collection of information on those who 
are to respond, including through the use of appropriate automated, 
electronic, mechanical, or other technological collection techniques or 
other forms of information technology, e.g., permitting electronic 
submission of responses.
    Recent deceptive lending cases at the FTC and elsewhere suggest 
that consumers who do not understand the terms of their mortgages can 
be subject to deception, that deception can occur even when consumers 
receive the disclosures required by the Truth-in-Lending Act, 15 U.S.C. 
1601 et seq. (TILA), and that deception about mortgage terms can result 
in substantial consumer injury.
    Despite a long history of mortgage disclosure requirements and many 
new legislative and regulatory proposals regarding disclosures, little 
empirical evidence exists to document the effect of current disclosures 
on consumer understanding of mortgage terms, consumer mortgage shopping 
behavior, or consumer mortgage choice.
    The FTC intends to conduct consumer research to examine: (1) How 
consumers search for and choose mortgages; (2) how consumers use and 
understand information about mortgages, including required disclosures; 
and (3) whether improved disclosures might improve consumer 
understanding, consumer mortgage shopping, and consumers' ability to 
avoid deception. The research also may assist the targeting of the 
FTC's enforcement actions by identifying areas most prone to consumer 
misunderstanding and lender deception and may help refine disclosure 
remedies imposed on deceptive lenders.

1. Description of the Collection of Information and Proposed Use

    The FTC proposes to conduct this study in two phases: (1) A 
qualitative research phase; and (2) a quantitative research phase. The 
qualitative research phase will include focus groups and in-depth 
interviews. The quantitative research will include copy tests of 
current and alternative disclosures. Results from the first phase will 
be used to refine the design of the second phase.
    The qualitative-phase focus groups will be completed under the 
current PRA clearance and are not part of this extension request.\2\ 
The qualitative-phase in-depth interviews may be completed under the 
current clearance, but scheduling considerations make this uncertain. 
The quantitative-phase copy tests will not be started before the 
expiration of the current clearance. Accordingly, this extension 
request covers information collection for the in-depth interviews and 
copy tests.
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    \2\ The focus groups will be used to examine how well consumers 
understand mortgage terms, how consumers shop for mortgages, if 
consumers recognize features of a mortgage offer that may 
significantly increase the cost of the loan, and whether consumers 
use and understand required disclosures.
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    The in-depth interviews will be conducted with 36 consumers who 
have recently completed a mortgage transaction. Respondents will be 
asked to bring their loan documents to the interview. Half of the 
interviews will be with consumers who obtained their mortgage from a 
prime lender and half will be consumers who obtained their mortgage 
from a subprime lender. The purpose of the interviews is to gain in-
depth knowledge of the extent to which consumers use, search for, and 
understand mortgage information--including information about their own 
recent loans.
    The quantitative research phase will consist of copy test 
interviews of 800 consumers who entered into a mortgage transaction 
within the previous two years. If possible, approximately half of the 
respondents will be consumers who obtained their mortgage from a prime 
lender and half will be consumers who obtained their mortgage from a 
subprime lender. The purpose of the copy tests will be to examine 
whether alternative disclosures can improve consumer understanding of 
mortgage terms and help to reduce potential deception about mortgage 
offers. The findings from the focus groups and in-depth interviews will 
be used to refine the alternative disclosures used in the copy tests.
    All information will be collected on a voluntary basis and 
consumers will receive usual and customary compensation for their 
participation. For the qualitative research the FTC has contracted with 
a consumer research firm to locate eligible borrowers, recruit 
respondents, moderate the focus groups, conduct the interviews, and 
write a report of the findings. For the quantitative research the FTC 
has contracted with a consumer research firm to locate eligible 
borrowers, recruit respondents, conduct the copy tests, and write a 
brief methodological report. The results will assist the FTC in 
determining how required disclosures and other information affects 
consumers' ability to understand the cost and features of mortgages. 
This understanding will further the FTC's mission of protecting 
consumers and competition in this important market.

2. Estimated Hours Burden

Qualitative Research

    Approximately 36 one-hour long, in-depth interviews will be 
conducted. If all respondents are single decision makers, this would 
amount to a 36 hour burden. However, some of the interviews may include 
couples. Assuming that half of the interviews include couples (the 
upper bound offered by the contractor), the hours burden for the in-
depth interviews would increase to 54 hours ((18 x 2 hours) + (18 x 1 
hour)).

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Quantitative Research

    Approximately 800 consumers who engaged in a mortgage transaction 
during the previous two years will participate in the quantitative 
phase of the research. Each copy test interview will take roughly 20-30 
minutes. The estimated hours burden for the quantitative research 
ranges from 267 hours (800 respondents x \1/3\ hour per respondent) to 
400 hours (800 respondents x \1/2\ hour per respondent).

Total

    The total estimated hours burden for both phases of the study 
ranges from 303 hours (36 hours + 267 hours) to 454 hours (54 hours + 
400 hours). The hours burden due to the qualitative focus groups (40 
hours) have not been included in this estimate because the focus groups 
will be completed under the current clearance.

William E. Kovacic,
General Counsel.
[FR Doc. 04-21687 Filed 9-27-04; 8:45 am]
BILLING CODE 6750-01-P