[Federal Register Volume 70, Number 87 (Friday, May 6, 2005)]
[Rules and Regulations]
[Pages 24272-24273]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-9141]



[[Page 24271]]

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Part IV





Department of Housing and Urban Development





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24 CFR Part 207



Mortgagee Time Limits for Supplemental Claims for Additional Insurance 
Benefits; Proposed Rule

  Federal Register / Vol. 70, No. 87 / Friday, May 6, 2005 / Rules and 
Regulations  

[[Page 24272]]


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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

24 CFR Part 207

[Docket No. FR-4957-P-01; HUD-2005-0008]
RIN 2502-AI31


Mortgagee Time Limits for Supplemental Claims for Additional 
Insurance Benefits

AGENCY: Office of the Assistant Secretary of Housing--Federal Housing 
Commissioner, HUD.

ACTION: Proposed rule.

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SUMMARY: This proposed rule would amend HUD's regulations to establish 
a time limit for filing supplemental multifamily mortgage insurance 
claims. The time limit established will provide an incentive for 
mortgagees to complete all mortgage insurance claims in a timely 
manner.

DATES: Comment Due Date: July 5, 2005.

ADDRESSES: Interested persons are invited to submit comments regarding 
this rule to the Regulations Division, Office of General Counsel, Room 
10276, Department of Housing and Urban Development, 451 Seventh Street, 
SW., Washington, DC 20410-0500. Electronic comments may be submitted 
through either:
     The Federal eRulemaking Portal at http://www.regulations.gov; or
     The HUD electronic Web site at http://www.epa.gov/feddocket. Follow the link entitled ``View Open HUD Dockets.'' 
Commenters should follow the instructions provided on that site to 
submit comments electronically.
    Facsimile (FAX) comments are not acceptable. In all cases, 
communications must refer to the docket number and title. All comments 
and communications submitted will be available for public inspection 
and copying between 8 a.m. and 5 p.m. weekdays at the above address. 
Copies are also available for inspection and downloading at http://www.epa.gov/feddocket.

FOR FURTHER INFORMATION CONTACT: Roland C. Diggs II, Housing Project 
Manager, Room 6180, Department of Housing and Urban Development, 451 
Seventh Street, SW., Washington, DC 20410-8000; telephone (202) 708-
1320 (this is not a toll-free number). Persons with hearing or speech 
impairments may access this number through TTY by calling the toll-free 
Federal Information Relay Service at (800) 877-8339.

SUPPLEMENTARY INFORMATION:

I. Background

    Section 207 of the National Housing Act (12 U.S.C. 1713) (NHA) 
authorizes the Secretary to insure certain eligible multifamily 
mortgages and to pay insurance benefits to the mortgagee. HUD's 
regulations implementing multifamily mortgage insurance eligibility 
requirements and contract rights and obligations regarding insurance 
benefits can be found at 24 CFR part 207. Under part 207, upon an 
assignment of the mortgage or a conveyance of the property to the 
Federal Housing Commissioner (Commissioner), and delivery by the 
mortgagee of items required pursuant to part 207, the Commissioner will 
pay insurance benefits to the mortgagee. After the initial insurance 
claim is paid to the mortgagee at final settlement, the Commissioner 
may also pay additional benefits due to adjustments or corrections of 
the claim amount paid at final settlement. These additional claims are 
often known as supplemental insurance claims.

II. This Proposed Rule

    For several years, a considerable number of mortgagees have filed 
supplemental insurance claims for additional insurance benefits more 
than a year after the Commissioner paid a final settlement on the 
mortgagee's initial insurance claim. These supplemental insurance 
claims are often belatedly filed in part due to insufficient 
preparation when filing the initial insurance claim. The large and 
complex nature of supplemental insurance claims, and the time spent 
reviewing and processing these claims, delays processing and payment of 
all initial and supplemental insurance claims.
    This proposed rule would amend HUD's multifamily mortgage insurance 
regulations at 24 CFR part 207 to require mortgagees to file all 
supplemental insurance claims with HUD within six months after the date 
of final payment of the initial insurance claim. Requiring that 
mortgagees file supplemental insurance claims within this time period 
creates an incentive for mortgagees to complete all final settlements 
promptly and will allow HUD to decrease some of its reviewing and 
processing costs. For the purposes of the proposed rule, the term final 
payment would be defined to mean the payment of the initial claim that 
is made at final settlement by the Commissioner based upon the 
submission by the mortgagee of all required documents and information.

III. Findings and Certifications

Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et seq.), 
generally requires an agency to conduct a regulatory flexibility 
analysis of any rule subject to notice and comment rulemaking 
requirements unless the agency certifies that the rule will not have a 
significant economic impact on a substantial number of small entities. 
This rule would impose no additional economic or other burdens on 
mortgagees participating in HUD's multifamily mortgage insurance 
programs. All such mortgagees, regardless of size, will be subject to 
the new requirements proposed by the rule. The rule proposes to 
establish a six-month time limitation for all mortgagees to file 
supplemental multifamily housing mortgage insurance claims. Small 
mortgagees will have no more additional compliance costs than other 
mortgagees within this six-month time limit as a result of this rule. 
Therefore, the undersigned certifies that this proposed rule will not 
have a significant economic impact on a substantial number of small 
entities, and an initial regulatory flexibility analysis is not 
required.
    Notwithstanding HUD's determination that this rule will not have a 
significant economic effect on a substantial number of small entities, 
HUD specifically invites comments regarding any less burdensome 
alternatives to this rule that will meet HUD's objectives as described 
by this preamble.

Environmental Impact

    In accordance with 24 CFR 50.19(c)(1) of the Department's 
regulations, this proposed rule 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. Therefore, this proposed rule is 
categorically excluded from the requirements of the National 
Environmental Policy Act (42 U.S.C. 4321 et seq.).

Unfunded Mandates Reform Act

    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA) (2 
U.S.C. 1531-1538) establishes requirements for federal agencies to 
assess the effects of their regulatory actions on state, local, and 
tribal governments and the private sector. This proposed rule does not 
impose any federal mandates on any

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state, local, or tribal government or the private sector within the 
meaning of UMRA.

Executive Order 13132, Federalism

    Executive Order 13132 (entitled ``Federalism'') prohibits, to the 
extent practicable and permitted by law, an agency from publishing any 
rule that has federalism implications and either imposes substantial 
direct compliance costs on state and local governments and is not 
required by statute, or the rule preempts state law, unless the agency 
meets the consultation and funding requirements of section 6 of the 
Executive Order. This rule does not have federalism implications and 
does not impose substantial direct compliance costs on state and local 
governments or preempt state law within the meaning of the Executive 
Order.

List of Subjects in 24 CFR Part 207

    Manufactured homes, Mortgage insurance, Reporting and recordkeeping 
requirements, Solar energy.

    For the reasons stated in the preamble, HUD proposes to amend 24 
CFR part 207 as follows:

PART 207--MULTIFAMILY HOUSING MORTGAGE INSURANCE

    1. The authority citation for 24 CFR part 207 continues to read as 
follows:

    Authority: 12 U.S.C. 1701z-11(e), 1709(c)(1), 1713, and 1715b; 
and 42 U.S.C. 3535(d).

    2. Add Sec.  207.259 (f) to read as follows:


Sec.  207.259  Insurance benefits.

* * * * *
    (f) Mortgagee Time Limits for Supplemental Claims for Additional 
Insurance Benefits. A mortgagee may not file for any additional 
payments of its mortgage insurance claim more than six months after the 
date of final payment of the initial insurance claim by the 
Commissioner. For the purpose of this section, the term final payment 
shall mean the payment of the initial insurance claim that is made by 
the Commissioner at final settlement based upon the submission by the 
mortgagee of all required documents and information pursuant to part 
207 of this chapter.

    Dated: April 8, 2005.
John C. Weicher,
Assistant Secretary for Housing--Federal Housing Commissioner.
[FR Doc. 05-9141 Filed 5-5-05; 8:45 am]
BILLING CODE 4210-27-P