[Federal Register Volume 70, Number 3 (Wednesday, January 5, 2005)]
[Notices]
[Pages 820-821]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-176]


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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 have 
been 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, 2006, the current PRA clearance for information collection 
requirements for its Mortgage Disclosure Study. That clearance was 
scheduled to expire on November 30, 2004. On November 22, 2004, the OMB 
granted the FTC's request for a short-term extension to December 31, 
2004, to allow for this second opportunity to comment.

DATES: Comments must be submitted on or before February 4, 2005.

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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    All comments should additionally be submitted to: Office of 
Management and Budget, Attention: Desk Officer for the Federal Trade 
Commission. Comments should be submitted via facsimile to (202) 395-
6974 because U.S. Postal Mail is subject to lengthy delays due to 
heightened security precautions.
    The FTC Act and other laws the Commission administers permit the 
collection of public comments to consider and use in this proceeding as 
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/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: On September 28, 2004, the FTC sought 
comment on the information collection requirements associated with the 
Mortgage Disclosure Study (OMB Control Number 3084-0126). See 69 FR 
57932. No comments were received. Pursuant to the OMB regulations that 
implement the PRA (5 CFR Part 1320), the FTC is providing this second 
opportunity for public comment while seeking OMB approval to extend the

[[Page 821]]

existing paperwork clearance for the rule.\2\
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    \2\ In its September 28, 2004 Federal Register Notice, the FTC 
indicated it was seeking to extend the current PRA clearance through 
December 31, 2005. The FTC staff expect the consumer research for 
the Mortgage Disclosure Survey to be completed by that date, but is 
now seeking to extend the current PRA clearance through December 31, 
2006, to allow for any unanticipated delays.
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    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 
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 Mortgage Disclosure Study will 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 is conducting this study in two phases: (1) A qualitative 
research phase; and (2) a quantitative research phase. The qualitative 
research phase includes two focus groups and 36 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 two focus groups and 25 of the in-depth interviews have been 
completed under the current PRA clearance and are not part of this 
extension request.\3\ Eleven of the in-depth interviews have not yet 
been conducted. Accordingly, this extension request covers information 
collection for the 11 in-depth interviews that remain for the 
qualitative phase and the copy tests for the quantitative phase.
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    \3\ The September 28, 2004 Federal Register Notice included all 
of the in-depth interviews in the extension request; 25 of those 
interviews were subsequently completed under the current clearance 
and are not a part of this extension request.
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    The remaining in-depth interviews will be conducted with 11 
consumers who have recently completed a mortgage transaction. 
Respondents will be asked to bring their loan documents to the 
interview. Some of the interviews will be with consumers who obtained 
their mortgage from a prime lender and some will be with 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. The FTC has 
contracted with two consumer research firms (one each for the 
qualitative and quantitative phases) to recruit respondents, conduct 
the interviews, and write a brief methodological report. The results 
will assist the FTC in determining how required disclosures and other 
information affect 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

    The qualitative phase is complete except for 11 in-depth 
interviews. If all respondents for those interviews are single decision 
makers, this would amount to an 11 hour burden. However, some of the 
interviews may include couples. Assuming that about half of the 
interviews include couples, the hours burden for the in-depth 
interviews would increase to 17 hours ((6 x 2 hours) + (5 x 1 hour)).

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 phase 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 278 hours (11 hours + 267 hours) to 417 hours (17 hours + 
400 hours).

William E. Kovacic,
General Counsel.
[FR Doc. 05-176 Filed 1-4-05; 8:45 am]
BILLING CODE 6750-01-P