[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