[Federal Register Volume 70, Number 211 (Wednesday, November 2, 2005)]
[Notices]
[Pages 66413-66422]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-21794]
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FEDERAL HOUSING FINANCE BOARD
[No. 2005-N-08]
Proposed Collection; Comment Request
AGENCY: Federal Housing Finance Board.
ACTION: Notice.
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SUMMARY: In accordance with the requirements of the Paperwork Reduction
Act of 1995, the Federal Housing Finance Board (Finance Board) is
seeking public comments concerning proposed changes to the information
collection entitled ``Federal Home Loan Bank Acquired Member Assets,
Core Mission Activities, Investments and Advances,'' which has been
assigned control 3069-0058 by the Office of Management and Budget
(OMB). The Finance Board intends to submit the entire information
collection, with the proposed changes described in this Notice, to OMB
for review and approval of a 3 year extension of the control number,
which is due to expire on March 31, 2007.
DATES: Interested persons may submit comments on or before January 3,
2006.
Comments: Submit comments by any of the following methods:
E-mail: [email protected].
Fax: 202-408-2580.
Mail/Hand Delivery: Federal Housing Finance Board, 1625 Eye Street
NW., Washington DC 20006, ATTENTION: Public Comments.
Federal eRulemaking Portal: http://www.regulations.gov. Follow the
instructions for submitting comments. If you submit your comment to the
Federal eRulemaking Portal, please also send it by e-mail to the
Finance Board at [email protected] to ensure timely receipt by the
agency.
Include the following information in the subject line of your
submission: Federal Housing Finance Board. Proposed Collection; Comment
Request: Federal Home Loan Bank Acquired Member Assets, Core Mission
Activities, Investments and Advances. 2005-N-08.
We will post all public comments we receive on this notice without
change, including any personal information you provide, such as your
name and address, on the Finance Board Web site at http://www.fhfb.gov/pressroom/pressroom_regs.htm.
FOR FURTHER INFORMATION CONTACT: David Roderer, Office of Supervision,
by telephone at 202-408-2540, by electronic mail at [email protected],
or by regular mail at the Federal Housing Finance Board, 1625 Eye
Street NW., Washington DC 20006.
SUPPLEMENTARY INFORMATION:
A. Need for and Use of the Information Collection
The Finance Board has authorized the Federal Home Loan Banks
(Banks) to acquire mortgage loans and other assets from their members
or housing associates under certain circumstances. 12 CFR part 955. The
regulation refers to these assets as acquired member assets or AMA. As
part of this regulatory authorization, each Bank that acquires
residential mortgage loans must provide to the Finance Board certain
loan-level data on a quarterly basis. The Finance Board uses this data
to monitor the safety and soundness of the Banks and the extent to
which the Banks are fulfilling their statutory housing finance mission
through their AMA programs. See 12 U.S.C. 1422a(a).
While the Banks provide the AMA data directly to the Finance Board,
each Bank initially must collect the information from the private-
sector member or housing associate from which the Bank acquires the
mortgage loan. Bank members and housing associates already collect the
vast majority of the data the Finance Board requires in order to do
business with Fannie Mae and Freddie Mac under regulatory requirements
issued by the Department of Housing and Urban Development (HUD) and
pursuant to the information collection requirements under the Home
Mortgage Disclosure Act (HMDA). Thus, the Finance Board's information
collection imposes only a minor incremental additional burden on Bank
members and housing associates.
The OMB control number for the information collection, which
expires on March 31, 2007, is 3069-0058. The likely respondents are
institutions that sell AMA assets to Banks.
B. Proposed Changes to the Information Collection
As part of the reorganization of agency reporting requirements, the
Finance Board plans to move the AMA information collection from 12 CFR
part 955 (specifically, section 955.4 and Appendices A and B) to the
Data Reporting Manual (DRM). See 70 FR 9551 (February 28, 2005). In
addition to moving the information collection from the AMA rule to the
DRM, the Finance Board is proposing to make the following changes to
the AMA reporting requirements:
1. Conforming AMA Reporting Requirements to Existing Practice
In consultation with the Banks, the Finance Board already has made
non-substantive changes to the AMA reporting requirements including
refining the definitions of certain reporting elements \1\ and adding
new elements to improve database management and enhance monitoring.\2\
The Finance Board also requires the Banks to report certain variables
for all outstanding AMA residential mortgage loans, not just for those
loans acquired during the calendar year, to better track performance,
including delinquencies, of each loan.
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\1\ The definition of: ``County'' was changed from the county
name to the 3-digit Federal Information Processing Standard (FIPS)
code for the county; ``PMI Percent'' was changed from percent of
private mortgage insurance to percent of primary mortgage insurance,
including mortgages insured by government agencies; ``Credit
Enhancement'' was changed from the numeric code indicating the type
of credit enhancement to the dollar value of the calculated loan-
level credit enhancement; ``Prepayment Penalty Terms'' was changed
to ``Prepayment Penalty Date'' and defined as the date that the
application of the prepayment penalty ends; ``Default Status'' was
changed to ``Delinquency Status'' and represents the delinquency
status of the loan at the end of the reporting period; and
``Interest Rate'' was defined as the note rate on the loan at the
time of loan origination.
\2\ ``Pool Rating'' for the letter credit rating of the loan
pool was added to the loan-level data reporting requirement. New
variables added for database management purposes ere: ``Program
Type'' and ``Pool Number.''
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2. Eliminating Data Elements
Based on analysis of the AMA data collected to date, the Finance
Board is proposing to eliminate sparsely populated data fields and data
fields the utility of which are unwarranted when balanced against the
collection and reporting burden. These fields include the geographic
indicator ``Place Code'' and the mortgage identifiers ``Cooperative
Unit Mortgage,'' ``Mortgage Purchased under the Banks'' Community
Investment Cash Advances (CICA) Programs'' (for single-family AMA), and
``Bank Real Estate Owned.'' The Finance Board also proposes deleting
the data field ``Acquisition Type'' due to the addition of the
``Program Type'' data element.
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To avoid duplication, the Finance Board is proposing to require
reporting of loan-level data on the loan, borrower, and property
characteristics only at the end of the calendar quarter in which the
loan is acquired. Currently, the Banks must report this data twice--in
the loan-level report for the acquisition quarter and the fourth
quarter.
3. Reducing Reporting Burden
To reduce the reporting burden, the Finance Board is proposing to
require submission of loan-level data, which the Banks already collect
and maintain, instead of aggregate data reports. The Finance Board also
proposes eliminating data elements the agency collects through the
membership database and directly from HUD, specifically the elements
that describe the acquiring lender or member selling the AMA to the
Bank and that contain census level demographic information related to
the property.\3\ To facilitate collection through the membership
database, the Finance Board is proposing to add one new data element--
the ``Federal Housing Finance Board Identification (FHFBID) Number.''
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\3\ These elements are: ``Acquiring Lender Institution,''
``Acquiring Lender City,'' ``Acquiring Lender State,'' ``Type of
Acquiring Lender Institution,'' ``Census Tract--Percent Minority,''
``Census Tract--Median Income,'' ``Local Area Median Income,''
``Tract Income Ratio,'' ``Area Median Family Income,'' ``Borrower
Income Ratio,'' ``Unit--Affordable Category,'' ``Unit Type XX--
Affordability Level'' (for multi-family AMA), and ``Geographically
Targeted Indicator.''
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To reduce reporting redundancy, the Finance Board proposes a
separate pool-level data report instead of reporting pool variables in
the loan-level data report. In addition to streamlining pool-level data
reporting, the proposed changes would require the Banks to provide a
quarterly update on loan pools so the Finance Board can monitor changes
in the credit quality of pools and estimated or actual credit
enhancements, which are important safety and soundness considerations.
The pool-level report would include: ``Bank District Flag,'' ``Pool
Number,'' 12 variables representing ``Participation Percentages'' of
each of the 12 Banks in the pool, and 4 variables representing
information on the pool credit enhancement and credit rating--``Pool
Rating,'' ``Pool Credit Enhancement,'' \4\ ``Recalculated Pool
Rating,'' and ``Recalculated Credit Enhancement.''
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\4\ The new data element ``Pool Credit Enhancement'' would
replace the current data element ``Credit Enhancement,'' which
itself has been redefined since the current rule was adopted. See
n.1. The Finance Board has effectively been collecting pool-level
credit enhancement values because it aggregates the loan-level
credit enhancement values currently collected. Standing alone,
however, the loan-level credit enhancement values are not as
meaningful as the pool-level values, and the Finance Board,
therefore, is proposing to collect the pool-level values directly.
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4. Adding New Data Elements
The Finance Board is proposing to add several new fields to comply
with revised federal data standards for classifying race and ethnicity.
See 62 FR 58782 (October 30, 1997). The current data fields, ``Borrower
Race or National Origin'' and ``Co-Borrower Race or National Origin,''
would be separately collected and reported as ``Borrower Ethnicity,''
``Co-Borrower Ethnicity,'' ``Borrower Race,'' and ``Co-Borrower Race.''
To better track and model prepayment and default rates of AMA, the
Finance Board proposes adding new loan-level data elements: ``Type of
Credit Score;'' ``Adjustment Frequency;'' ``Negative Amortization;''
``Current Unpaid Principal Balance;'' ``Current Coupon;'' and ``Loan
Amount'' (for multi-family AMA); and redefining ``Borrower Credit
Score'' and ``Co-Borrower Credit Score'' to include, in addition to the
Fair, Isaacs, Co. (FICO) score, the NextGen FICO credit score.
5. List of Data Elements
Both Appendix A, which lists the data elements for single-family
residential mortgage loans, and Appendix B, which lists the data
elements for multi-family residential mortgage loans, would be divided
into three parts: Part I--loan-level data elements for all single-
family and multi-family AMA acquired during the calendar quarter; Part
II--loan-level data elements for all single-family and multi-family AMA
outstanding in the calendar quarter; and Part III--pool-level data
elements for pools of single-family and multi-family AMA.
The loan-level data elements in Part I generally reflect
characteristics of the loan or the borrower(s) and should not change
over the life of the loan. To simplify the current reporting
requirements, a Bank would have to report loan-level data specified in
Part I only during the calendar quarter in which it acquired the loan.
The loan-level data elements in Part II include data the Bank would
have to report for all single-family and multi-family AMA outstanding
in a calendar quarter. These data elements are more meaningful when
monitored on a continuing basis. The Finance Board would use this
information to create and maintain a database for safety and soundness
monitoring, particularly of the Bank's risk management.
Part III includes data the Bank would have to report for pools or
assets backed by pools. The Finance Board would use this information to
monitor the safety and soundness of the Bank's AMA program.
C. Burden Estimate
The Finance Board estimates that the hour burden associated with
the AMA collection will remain unchanged. The Finance Board estimates
the total annual average number of respondents at 600, with 4 responses
per respondent. The estimate for the average hours per response is 24
hours. The estimate for the total annual hour burden is 57,600 hours
(600 respondents x 4 responses per respondent x 24 hours).
Bank members could incur additional one-time costs to be able to
collect and report the loan-level data elements needed to allow for
better tracking and modeling of prepayment and default rates of
mortgage portfolios. The Finance Board estimates this additional, one-
time cost at $120,000 ($2,000 x 600 members).
D. Comment Request
1. Proposed Changes to the AMA Database
The Finance Board requests comments on the utility and practicality
of the proposed data elements, including whether additional elements
should be included, deleted, or modified. The Finance Board also seeks
comments on whether the data descriptions in Appendices A and B are
clear.
2. Paperwork Reduction Act Burden Estimate
The Finance Board requests written comments on the following: (1)
Whether the collection of information is necessary for the proper
performance of Finance Board functions, including whether the
information has practical utility; (2) the accuracy of the Finance
Board's estimates of the burdens and costs of the collection of
information; (3) ways to enhance the quality, utility, and clarity of
the information collected; and (4) ways to minimize the burden of the
collection of information on respondents, including through the use of
automated collection techniques or other forms of information
technology.
Dated: October 27, 2005.
By the Federal Housing Finance Board.
John P. Kennedy,
General Counsel.
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[FR Doc. 05-21794 Filed 11-1-05; 8:45 am]
BILLING CODE 6725-01-C