[Federal Register Volume 78, Number 147 (Wednesday, July 31, 2013)]
[Proposed Rules]
[Page 46295]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-18425]


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 Proposed Rules
                                                 Federal Register
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 This section of the FEDERAL REGISTER contains notices to the public of 
 the proposed issuance of rules and regulations. The purpose of these 
 notices is to give interested persons an opportunity to participate in 
 the rule making prior to the adoption of the final rules.
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  Federal Register / Vol. 78, No. 147 / Wednesday, July 31, 2013 / 
Proposed Rules  

[[Page 46295]]



FEDERAL HOUSING FINANCE AGENCY

12 CFR Part 1254

RIN 2590-AA53


Enterprise Underwriting Standards

AGENCY: Federal Housing Finance Agency.

ACTION: Proposed rule; withdrawal.

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SUMMARY: The Federal Housing Finance Agency (FHFA) is withdrawing the 
proposed rule published in the Federal Register on June 15, 2012, 
concerning underwriting standards for the Federal National Mortgage 
Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation 
(Freddie Mac), (together, the Enterprises) relating to mortgage assets 
affected by Property Assessed Clean Energy (PACE) programs.

DATES: The proposed rule published June 15, 2012, at 77 FR 3958, is 
withdrawn as of July 31, 2013.

FOR FURTHER INFORMATION CONTACT: Alfred M. Pollard, General Counsel, 
(202) 649-3050 (not a toll-free number), Federal Housing Finance 
Agency, Constitution Center, Eighth Floor, 400 Seventh Street SW., 
Washington, DC 20024. The telephone number for the Telecommunications 
Device for the Hearing Impaired is (800) 877-8339.

SUPPLEMENTARY INFORMATION: 

I. Background

    This rulemaking was initiated in response to a preliminary 
injunction issued by the U.S. District Court for the Northern District 
of California in 2011. The case challenged actions by FHFA to address 
certain energy retrofit lending programs administered by state or 
county governments. The District Court injunction made clear that, 
during pendency of court review and the ordered rulemaking, the 
determination of the Agency remained in place, specifically that Fannie 
Mae and Freddie Mac should take appropriate action to avoid purchasing 
new or refinanced loans that were encumbered by this retrofit lending 
program that created a priority ahead of the Enterprise lien priority.
    As required by the preliminary injunction, FHFA published an 
Advanced Notice of Proposed Rulemaking at 77 FR 3958 (January 26, 2012) 
and received comments from individuals, government entities, businesses 
and scientific groups. Subsequently, FHFA published a Notice of 
Proposed Rulemaking at 77 FR 36086 (June 15, 2012) that proposed 
maintaining the current Agency directive or guidance as well as 
considering alternatives that might permit some alteration of those 
Agency actions. On August 9, 2012, the District Court, which had not 
acted to direct publication of a Final Rule, ordered that the Agency 
should complete the rulemaking, moving to a Final Rule under a set 
timeframe; California ex. Rel. Harris v. Federal Housing Finance 
Agency, 894 F.Supp.2d 1205 (N.D.Ca. 2012).
    FHFA appealed the District Court rulings to the Ninth Circuit Court 
of Appeals. FHFA objected to the District Court's orders because they 
interfered with the exercise of Agency powers and authorities as 
provided by Congress in the Housing and Economic Recovery Act of 2008. 
Two other circuit courts had ruled in FHFA's favor in similar cases; 
see Town of Babylon v. FHFA, 699 F.3d 221 (2nd Cir. 2012) and Leon 
County, Florida v. FHFA, 700 F.3d 1273 (11th Cir. 2012). Specifically, 
in the case of Fannie Mae and Freddie Mac, a bar on judicial review of 
conservator decisions contained in the Act limited court review. Also, 
the Agency asserted and the Ninth Circuit agreed that the challenged 
Agency actions involved the exercise of core conservatorship powers. 
Therefore, the District Court orders were invalid pursuant to the broad 
congressional bar against judicial action, such as those taken by the 
District Court, that would affect the exercise of the Conservator's 
powers and functions. On March 19, 2013, the Ninth Circuit overturned 
the District Court, vacated its direction to the Agency and dismissed 
the case against FHFA; County of Sonoma v. FHFA, 710 F.3d 987 (9th Cir. 
2013). The Ninth Circuit ruling was a final disposition of this case.

II. Withdrawal of Proposed Rule

    FHFA is withdrawing the court-ordered rulemaking on this subject. 
FHFA does not contemplate altering its policy regarding certain lien-
priming energy retrofit loan programs at this time, but will continue 
its policy review of lending programs that would support energy 
retrofits and might be appropriate for purchase by the regulated 
entities.

III. Regulatory Classification

    Since this notice withdraws a notice of proposed rulemaking, it is 
neither a proposed nor a final rulemaking and therefore is not within 
the scope of Executive Order 12866 of September 30, 1993, Regulatory 
Planning and Review, 58 FR 51735 or the Regulatory Flexibility Act, 5 
U.S.C. 601-612.

    Dated: July 24, 2013.
Edward J. DeMarco,
Acting Director, Federal Housing Finance Agency.
[FR Doc. 2013-18425 Filed 7-30-13; 8:45 am]
BILLING CODE 8070-01-P