[Federal Register Volume 71, Number 169 (Thursday, August 31, 2006)]
[Notices]
[Pages 51842-51844]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 06-7267]


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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

[Docket No. FR-4883-N-03]


HUD Multifamily Rental Project and Health Care Facility Closing 
Documents; Status on Finalizing Closing Documents and Announcement of 
Meeting

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

ACTION:  Notice; announcement of meeting.

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SUMMARY: This notice responds to recent inquiries to the Department 
about the status of HUD's update of a comprehensive set of closing 
forms and documents for use in the Federal Housing Administration (FHA) 
multifamily rental project and health care facility (excluding 
hospitals) mortgage insurance programs. On August 2, 2004, HUD issued 
for review and public comment 36 proposed revised closing forms. The 
public comment period closed on October 1, 2004, and HUD received 
submissions from 25 commenters. This notice advises the housing 
industry and interested members of the public that these documents 
remain in development and are not ready for issuance.
    Although the closing documents remain in development, HUD 
understands the interest and concern of industry and other interested 
members of the public regarding the timetable for release of these 
documents in final form by HUD and the effective date of such forms. To 
address the interest and concerns regarding the status of development, 
this notice describes policy decisions that have been made on the 
closing documents, and the processes, which these documents must still 
undergo before final issuance. In addition to this notice, HUD will 
conduct a meeting, on Thursday, September 21, 2006, at HUD 
Headquarters, to address questions about the decisions that have been 
made and the processes that these documents must undergo before final 
issuance. HUD is inviting to this meeting, the 25 commenters, and, 
subject to room capacity limitations, other interested members of the 
public. HUD also will make phone lines available to expand the capacity 
of the members of the public that may participate in this meeting.
    The purpose of this meeting is not for the purpose of reopening the 
public comment period on the closing documents. HUD will not accept new 
comments at the meeting, either orally or in writing, nor will HUD 
engage in a discussion of issues still under consideration. The purpose 
of the meeting is solely to brief the commenters and interested members 
of the public on the status of development of the revised closing 
forms. HUD believes that a briefing on the process of development of 
the forms will assist all interested parties in understanding the 
stages of review these forms must undergo prior to issuance. HUD 
intends to finalize and then implement the revised closing forms in 
calendar year 2007.

DATES: HUD will conduct the Closing Documents meeting on September 21, 
2006.

ADDRESSES: The Closing Documents meeting will be held at 2 p.m. 
(Eastern time) on September 21, 2006, at HUD Headquarters for which the 
address is the Department of Housing and Urban Development, 451 Seventh 
Street, SW., Washington, DC.
    Members of the public who are interested in attending this meeting 
in person or participating by phone should submit a request to HUD at 
the following e-mail address: [email protected].
    HUD will strive to honor requests on a first-come first-serve 
basis. However, HUD is also interested in ensuring that participation 
in this meeting, whether in person or by phone, reflects fair 
representation of the various sectors of the industry that will be 
affected by these closing documents. HUD therefore asks that parties 
submitting requests to participate in this meeting identify the basis 
for their interest in these closing documents.
    Those who are confirmed to participate in this meeting, either in 
person or by phone, will receive additional information from HUD on how 
to participate in the meeting. Visitors attending the meeting will need 
to adhere to the security procedures of the HUD building.

FOR FURTHER INFORMATION CONTACT: Charles H. (``Hank'') Williams, Office 
of Housing, Deputy Assistant Secretary for Multifamily Housing 
Programs, Department of Housing and Urban Development, 451 Seventh 
Street, SW., Room 6106, Washington, DC 20410-0500; telephone (202) 708-
2495 (this is not a toll-free number); John J. Daly, Associate General 
Counsel for Insured Housing, Office of the General Counsel, Department 
of Housing and Urban Development, 451 Seventh Street, SW., Room 9226, 
Washington, DC 20410-0500; telephone (202) 708-1274 (this is not a 
toll-free number). Persons with hearing or speech disabilities may 
access this number through TTY by calling the toll-free Federal 
Information Relay Service at (800) 877-8339.
    To Request Participation in the Meeting: A request to participate 
in the

[[Page 51843]]

meeting must be submitted to the following e-mail address: 
[email protected].

SUPPLEMENTARY INFORMATION:

Background

    On August 2, 2004, HUD published in the Federal Register (69 FR 
42614) a notice that advised that, consistent with the Paperwork 
Reduction Act of 1995, HUD was publishing for public comment a 
comprehensive set of revised closing forms and documents for use in the 
FHA multifamily rental project and health care facility (excluding 
hospitals) programs. In addition to meeting the requirements of the 
Paperwork Reduction Act, HUD advised that it was seeking public comment 
for the purpose of receiving input from the lending industry and other 
interested parties in HUD's development and adoption of a set of 
instruments that offer the requisite protection to all parties in these 
FHA-insured mortgage programs while also being consistent with modern 
real estate practice and mortgage lending laws and procedures. The 
August 2, 2004, notice advised that HUD's closing forms were 
significantly outdated and needed a thorough review and update to 
reflect current HUD policies as well as current practices in real 
estate and mortgage financing transactions.
    The August 2, 2004, notice followed an earlier informal 
solicitation of public comment on proposed revisions to the closing 
documents that were posted on HUD's Web site in March 2000. In response 
to the many comments received from the 2000 solicitation of public 
comment, significant revisions were made to the proposed closing 
documents and these revised documents were published in the Federal 
Register on August 2, 2004, for review and public comment.
    Recent inquiries to HUD have asked whether issuance of these 
closing documents in final form is imminent, whether the revised 
documents will be required to be utilized upon 30 days following 
issuance in final form, and if so, that there would be sufficient time 
for industry to prepare for using the new closing documents.

Status of Update of Closing Documents

    In response to the August 2, 2004, notice, HUD received 25 timely 
public comments. Although that is not a high number of public comments, 
the comments were very lengthy and detailed, and presented many 
individual comments and issues for HUD to consider in its revision of 
the closing documents, which had not been significantly revised in 
approximately 20 years. Several commenters offered their own edited 
versions of the closing documents with alternative language for HUD to 
consider. Additionally, changes suggested by commenters for certain 
documents would require changes to be made to other documents, and 
therefore a careful review of several documents was needed at times 
when a change was recommended only to one document.
    The issuance of the closing documents in final form is not 
imminent. Although all comments submitted to HUD have been reviewed 
very carefully, the closing documents must still be reviewed by 
appropriate offices within HUD and then submitted to the Office of 
Management and Budget (OMB) for review. HUD recognizes the importance 
of these procedural safeguards and is committed to ensuring that the 
industry has sufficient time to make the transition to the new closing 
documents once they are issued in final.
    In response to public comments on the proposed documents, the 
policy decisions that have been made include:
    1. Health Care Facility (e.g., nursing homes) documents will be 
published again for public comment (e.g., on issues such as treatment 
of accounts receivable financing) as proposed documents;
    2. Revised documents other than health care facilities (e.g., 
rental projects) will be published as final documents without further 
comment;
    3. All revised documents will be updated periodically (e.g., very 
three (3) years to coincide with renewal of OMB numbers under the 
Paperwork Reductions Act);
    4. Updates to revised documents, which are needed more frequently 
than periodic updates, will be made on a case-by-case basis;
    5. Recourse liability for Key Principals will not be a HUD 
requirement, as proposed in the documents in the August 2, 2004, 
Federal Register notice;
    6. A clear definition of ``HUD Directives'' will be provided; and
    7. The effective date for the revised documents will provide time 
for processing pending FHA mortgage insurance applications as well as 
for training on the revised documents.
    HUD has received requests that before issuing the final versions of 
the closing documents, HUD allow the industry and interested members of 
the public to review and comment on the documents a second time. Except 
for health care facility documents, HUD presently has no plans for a 
second round of comments (or a third round, considering the 
solicitation of comments in March 2000). Other inquirers have asked 
that, if there were no further opportunity for public comment, would 
HUD provide a briefing and respond to questions on the revised 
documents before they are required to be used. HUD has provided 
briefings on other rules or policies of widespread interest or 
significant impact before proceeding to implementation, and believes 
that a briefing may be appropriate for these closing documents.

September 21, 2006, Meeting

    In consideration of the widespread interest about the revised 
closing documents as well as substantial concern about the changes that 
HUD may make in the final documents, HUD has decided it will hold a 
briefing on the status of revisions to the closing documents, primarily 
to outline the procedural steps remaining in the development process. 
HUD has given serious consideration to the many comments received on 
the proposed revised documents issued in August 2004. As an expression 
of its appreciation to all those who took the time to submit careful 
and thoughtful comments, HUD invites the 25 commenters to the September 
21, 2006, meeting. The names of the commenters are attached as an 
appendix to this notice.
    HUD reiterates that the purpose of this meeting is not to solicit 
or accept new and/or additional public comments of the closing 
documents, generally, or the specific policy decisions listed above.
    HUD is conscientious in its effort to keep the industry apprised of 
its progress and included in it deliberative process. In addition to 
the invitation to the commenters to attend the meeting on the closing 
documents, the meeting will be open to interested members of the public 
as described in the ADDRESSES section of this notice above. The names 
of all participants in the September 21, 2006, meeting will be posted 
to the HUD Web site, following the meeting, and HUD also will post a 
summary of this meeting.

    Dated: August 24, 2006.
Brian D. Montgomery,
Assistant Secretary for Housing--Federal Housing Commissioner.

Appendix--List of Commenters

    1. Hirschler Fleischer, PC, Richmond, VA.
    2. Fenigstein & Kaufman, PC, Los Angeles, CA.
    3. Capital Funding Group, Inc., Baltimore, MD.
    4. Berkshire Mortgage Finance, Bethesda, MD.
    5. CW Capital, Needham, MA.

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    6. Alan D. Ross, Law Corporation, Encino, CA.
    7. Kantor, Taylor, McCarthy, PC, Seattle, WA.
    8. CNA Surety, Sioux Falls, SD.
    9. PNC Multifamily Capital, San Francisco, CA.
    10. National Association of Home Builders, Washington, DC.
    11. Vorys, Sater, Seymour and Pease, LLP, Cincinnati, OH.
    12. National Leased Housing Association, Washington, DC.
    13. The Surety Association of America, Washington, DC.
    14. Goulston & Storrs, Counsellors at Law, Washington, DC.
    15. Nixon Peabody LLP, Washington, DC.
    16. Coan & Lyons, Washington, DC.
    17. AGM Financial Services, Inc., Baltimore, MD.
    18. Boston Capital, Boston, MA.
    19. Highland Mortgage Company, Raleigh, NC.
    20. Guardian Management, Portland, OR.
    21. American Arbitration Association, New York, NY.
    22. P/R Mortgage & Investment Corp., Carmel, IN.
    23. Committee on Healthcare Financing, Washington, DC.
    24. Mortgage Bankers Association, Washington, DC.
    25. M&T Realty Capital Corporation, Baltimore, MD.

[FR Doc. 06-7267 Filed 8-30-06; 8:45 am]
BILLING CODE 4210-67-M