[Federal Register Volume 73, Number 136 (Tuesday, July 15, 2008)]
[Corrections]
[Page 40656]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: Z8-13378]



  Federal Register / Vol. 73, No. 136 / Tuesday, July 15, 2008 / 
CORRECTIONS  

[[Page 40656]]



DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

Office of Federal Housing Enterprise Oversight

12 CFR Part 1750

RIN 2550-AA38


Risk-Based Capital Regulation--Loss Severity Amendments

Correction

    In rule document E8-13378 beginning on page 35893 in the issue of 
Wednesday, June 25, 2008 make the following corrections:
    1. On page 35893, in the third column, the last paragraph and its 
accompanying footnotes should read as follows:
    Title XIII of the Housing and Community Development Act of 1992, 
Public Law 102-550, titled the Federal Housing Enterprises Financial 
Safety and Soundness Act of 1992 (Act) (12 U.S.C. 4501 et seq.), 
established OFHEO as an independent office within the Department of 
Housing and Urban Development to ensure that Fannie Mae and Freddie Mac 
(collectively the Enterprises) are adequately capitalized, operate 
safely and soundly, and comply with applicable laws, rules and 
regulations. The Act provides that the Director of OFHEO (Director) is 
authorized to make such determinations and take such actions as the 
Director determines necessary with respect to the issuance of 
regulations regarding, among other things, the required capital levels 
for the Enterprises.\1\ The Act further provides that the Director 
shall issue regulations establishing the risk-based capital test (Risk-
Based Capital Regulation) and that the Risk-Based Capital Regulation, 
subject to certain confidentiality provisions, shall be sufficiently 
specific to permit an individual other than the Director to apply the 
risk-based capital test in the same manner as the Director.\2\
    \1\ 12 U.S.C. 4513(a), (b)(1), (b)(3).
    \2\ 12 U.S.C. 1361(e)(1), (e)(3).
    2. On page 35894, in the first column, the first full paragraph and 
its accompanying footnotes should read as follows:
    Pursuant to the Act, OFHEO published a final regulation setting 
forth a risk-based capital test which forms the basis for determining 
the risk-based capital requirement for each Enterprise.\3\ The Risk-
Based Capital Regulation has been amended to incorporate corrective and 
technical amendments that enhance the transparency sensitivity to risk 
and accuracy of the calculation of the risk-based capital 
requirement.\4\
    \3\ Risk-Based Capital, 66 FR 47730 (September 13, 2001), 12 CFR 
part 1750.
    \4\ Risk-Based Capital, 66 FR 47730 (September 13, 2001), 12 CFR 
part 1750, as amended, 67 FR 11850 (March 15, 2002), 67 FR 19321 
(April 19, 2002), 67 FR 66533 (November 1, 2002), 68 FR 7309 
(February 13, 2003), 71 FR 75085 (December 14, 2006).
    3. On the same page, in the second column, the first full paragraph 
and its accompanying footnote should read as follows:
    Consistent with the Act and OFHEO's commitment to review, update 
and enhance the Risk-Based Capital Regulation in order to ensure an 
accurate risk sensitive and transparent calculation of the risk-based 
capital requirement, OFHEO published a notice of proposed rulemaking 
(NPRM) to incorporate amendments to the Risk-Based Capital 
Regulation.\5\ Specifically, OFHEO proposed two changes to the Risk-
Based Capital Regulation. The first change was proposed because certain 
loss severity equations resulted in the Enterprises recording profits 
instead of losses on foreclosed mortgages during the calculation of the 
risk-based capital requirement. The current loss severity equations 
overestimate Enterprise recoveries for defaulted government guaranteed 
and low loan-to-value loans. The results generated by the current loss 
severity equations are not consistent with the Risk-Based Capital 
Regulation and result in significant reductions in the risk-based 
capital requirements for the Enterprises. The second change relates to 
the treatment of Federal Housing Administration insurance associated 
with single-family loans with a loan-to-value ratio below 78%. OFHEO 
proposed changes related to these loans that would make the Risk-Based 
Capital Regulation consistent with current law.
    \5\ Risk-Based Capital-Loss Severity Amendments, 72 FR 68656 
(December 5, 2007).

[FR Doc. Z8-13378 Filed 7-14-08; 8:45 am]
BILLING CODE 1505-01-D