[Federal Register Volume 79, Number 136 (Wednesday, July 16, 2014)]
[Rules and Regulations]
[Pages 41422-41424]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-16613]


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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

24 CFR Parts 200, 257, 4000, and 4001

[Docket No. FR-5790-F-01]
RIN 2501-AD68


Removal of HOPE for Homeowners Program Regulations

AGENCY: Office of the Secretary, HUD.

ACTION: Final rule.

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SUMMARY: Through this rule, HUD removes regulations for the HOPE for 
Homeowners Program. The statutory authority for this program expired 
September 30, 2011. Because these regulations are no longer operative, 
they are being removed by this final rule. To the extent that local 
programs are still ongoing under the following repealed parts, the 
removal of these regulations does not affect the requirements for 
transactions entered into when the regulations were in effect. Loans 
made under the HOPE for Homeowners Program that are presently insured 
will continue to be governed by the regulations that existed 
immediately before the effective date of this final rule.

DATES: Effective date: August 15, 2014.

FOR FURTHER INFORMATION CONTACT: Camille E. Acevedo, Associate General 
Counsel for Legislation and Regulations, Office of General Counsel, 
Department of Housing and Urban Development, 451 7th Street SW., Room 
10276, Washington, DC 20410; telephone number 202-708-1793 (this is not 
a toll-free number). Persons with hearing or speech impairments may 
access this number through TTY by calling the Federal Relay Service, 
toll-free at 800-877-8389.

SUPPLEMENTARY INFORMATION: 

I. Background

    The HOPE for Homeowners Act of 2008 (title IV of Division A of the 
Housing and Economic Recovery Act of 2008 (HERA) (Pub. L. 110-289, 122 
Stat. 2654, approved July 30, 2008) added a new section 257 to the 
National Housing Act (NHA) (12 U.S.C. 1701z-22) that established a 
temporary program within HUD's Federal Housing Administration (FHA) 
that offered homeowners and mortgage loan holders (or servicers acting 
on their behalf) insurance on the refinancing of distressed mortgagors 
to support long-term sustainable homeownership and avoid foreclosure. 
Section 257 authorized FHA to refinance eligible mortgages commencing 
no earlier than October 1, 2008, and such authority to refinance 
expired on September 30, 2011. The fundamental principle behind the 
HOPE for Homeowners Act and the HOPE for Homeowners Program was that 
providing new equity for distressed homeowners may be an effective way 
to help homeowners avoid foreclosure.
    The HOPE for Homeowners Act also established a Board of Directors 
to administer the program. The Board is composed of the Secretary of 
HUD, the Secretary of the Treasury, the Chairman of the Board of 
Governors of the Federal Reserve System, and the Chairperson of the 
Board of Directors of the Federal Deposit Insurance Corporation or 
their respective designees. Section 257(c)(1) of the NHA requires the 
Board to establish program requirements and standards for the HOPE for 
Homeowners Program and prescribe such regulations and provide such 
guidance as may be necessary or appropriate to implement such 
requirements and standards. Under the administration of the Board, the 
HOPE for Homeowners Program regulations were promulgated on October 6, 
2008, at 73 FR 58418, and codified at 24 CFR part 4001.\1\ By rule 
published on February 20, 2009, at 74 FR 7812, the Board of Directors 
adopted regulations that would govern access to records of the Board 
under the Freedom of Information Act. These regulations were codified 
at 24 CFR part 4000.\2\
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    \1\ See http://www.gpo.gov/fdsys/pkg/FR-2008-10-06/pdf/E8-23612.pdf.
    \2\ See http://www.gpo.gov/fdsys/pkg/FR-2009-02-20/pdf/E9-3582.pdf.
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    The Emergency Economic Stabilization Act of 2008 (Pub. L. 110-343, 
122 Stat. 3765, approved October 3, 2008) (EESA), specifically section 
124 of EESA, amended section 257 of the NHA to provide additional 
flexibility and options to lenders participating in the HOPE for 
Homeowners Program. Among other things, section 124 of EESA authorizes 
upfront payments to a holder of an existing subordinate mortgage in 
lieu of providing the subordinate lien holder with a portion of HUD's 
50 percent interest in the future appreciation of the value of the 
property. On January 7, 2009, at 74 FR 617, the Board published a rule 
to implement the changes made by EESA.
    On May 20, 2009, the President signed into law the Helping Families 
Save Their Homes Act of 2009 (Division A of Pub. L. 111-22, 123 Stat. 
1632, approved May 20, 2009) (Helping Families Act). Section 202 of the 
Helping Families Act makes several amendments to section 257 of the NHA 
to enhance operation of the HOPE for Homeowners Program and to provide 
additional flexibility to participants. In addition, the Helping 
Families Act transferred responsibility, including rulemaking 
authority, for the HOPE for Homeowners Program from the Board of 
Directors to the Secretary of HUD. The Board of Directors would assist 
the program in an advisory capacity to the Secretary of HUD. With the 
transfer of responsibility for administration of the program from the 
Board of Directors to HUD, HUD promulgated new regulations for the HOPE 
for Homeowners Program that incorporated the changes made by EESA and 
the Helping Families Act. The regulations were published on January 12, 
2010, at 75 FR 1686, and codified at 24 CFR part 257.

This Final Rule

    Although changes were made to the HOPE for Homeowners Program by 
EESA and the Helping Families Act, the expiration of the program was 
not altered and the authority for the HOPE for Homeowners Program 
expired on September 30, 2011. Accordingly, this final rule removes the 
regulations for the HOPE for Homeowners Program, codified in 24 CFR 
parts 257, 4000 and 4001. On June 10, 2011, FHA issued a mortgagee 
letter entitled ``Termination of the HOPE for Homeowners (H4H) 
Program'' that provided instructions to FHA-approved mortgagees on how 
to

[[Page 41423]]

process cases during the phasing out of the HOPE for Homeowners 
Program. The mortgagee letter stated that to ensure close-out of the 
program by September 30, 2011, the date of expiration of the statutory 
authority for this program, FHA would not issue any case numbers for 
this program after July 29, 2011, and advised that eligible mortgages 
would not be insured after September 30, 2011.\3\
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    \3\ See http://portal.hud.gov/hudportal/HUD?src=/program_offices/administration/hudclips/letters/mortgagee/2011ml.
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    Mortgages presently insured under the program will continue to be 
governed by the regulations in effect August 15, 2014, and the 
contracts of mortgage insurance will not be affected by the removal of 
these regulations. Accordingly, this rule amends Sec.  200.1301 
(Expiring Programs--Savings Clause) of 24 CFR part 200, subpart W 
(Administrative Matters) to add a new paragraph (e) to Sec.  200.1301, 
which lists the parts associated with the HOPE for Homeowners Program 
regulations and states that any existing loan assistance, ongoing 
participation, or insured loans under these parts will continue to be 
governed by the regulations in effect as they existed immediately 
before August 15, 2014. In addition to this amendment, HUD amends 24 
CFR part 200, subpart W, to consolidate other expired regulations with 
savings clauses into a single section, Sec.  200.1301. Accordingly, HUD 
removes Sec.  200.1302, which listed additional expired programs.

II. Justification for Final Rulemaking

    HUD generally publishes a rule for public comment before issuing a 
final rule for effect, in accordance with HUD's own regulations on 
rulemaking in 24 CFR part 10. Part 10 provides, however, for exceptions 
to the general rule if the agency finds good cause to omit advance 
notice and public participation. The good cause requirement is 
satisfied when prior public procedure is ``impracticable, unnecessary, 
or contrary to the public interest.'' (See 24 CFR 10.1.)
    HUD finds that public notice and comment are not necessary for this 
rulemaking because the authority for the HOPE for Homeowners Program 
expired on September 30, 2011; mortgages are no longer being insured 
under this program; and, therefore, the regulations are no longer 
operative. For these reasons, HUD has determined that it is unnecessary 
to delay the effectiveness of this rule in order to solicit prior 
public comment.

III. Findings and Certification

Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et seq.) 
generally requires an agency to conduct a regulatory flexibility 
analysis of any rule subject to notice and comment rulemaking 
requirements, unless the agency certifies that the rule will not have a 
significant economic impact on a substantial number of small entities. 
Because HUD has determined that good cause exists to issue this rule 
without prior public comment, this rule is not subject to the 
requirement to publish an initial or final regulatory flexibility 
analysis under the RFA as part of such action.

Unfunded Mandates Reform

    Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA) \4\ 
requires that an agency prepare a budgetary impact statement before 
promulgating a rule that includes a Federal mandate that may result in 
the expenditure by state, local, and tribal governments, in the 
aggregate, or by the private sector of $100 million or more in any 1 
year. If a budgetary impact statement is required, section 205 of UMRA 
also requires an agency to identify and consider a reasonable number of 
regulatory alternatives before promulgating a rule.\5\ However, the 
UMRA applies only to rules for which an agency publishes a general 
notice of proposed rulemaking pursuant to the Administrative Procedure 
Act (APA).\6\ As discussed above, HUD has determined for good cause 
that the APA does not require general notice and public comment on this 
rule and, therefore, the UMRA does not apply to this final rule.
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    \4\ 2 U.S.C. 1532.
    \5\ 2 U.S.C. 1534.
    \6\ 2 U.S.C. 1532(a).
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Executive Order 13132, Federalism

    Executive Order 13132 (entitled ``Federalism'') prohibits an agency 
from publishing any rule that has federalism implications if the rule 
either imposes substantial direct compliance costs on state and local 
governments and is not required by statute, or the rule preempts state 
law, unless the agency meets the consultation and funding requirements 
of section 6 of the Executive order. This final rule will not have 
federalism implications and would not impose substantial direct 
compliance costs on state and local governments or preempt state law 
within the meaning of the Executive order.

Environmental Review

    This final rule does not direct, provide for assistance or loan and 
mortgage insurance for, or otherwise govern or regulate, real property 
acquisition, disposition, leasing, rehabilitation, alteration, 
demolition, or new construction; nor establish, revise or provide for 
standards for construction or construction materials, manufactured 
housing, or occupancy. Accordingly, under 24 CFR 50.19(c)(1), this 
final rule is categorically excluded from environmental review under 
the National Environmental Policy Act of 1969 (42 U.S.C. 4321).

List of Subjects

24 CFR Part 200

    Administrative practice and procedure, Claims, Equal employment 
opportunity, Fair housing, Home improvement, Housing standards, 
Incorporation by reference, Lead poisoning, Loan programs--housing and 
community development, Minimum property standards, Mortgage insurance, 
Organization and functions (Government agencies), Penalties, Reporting 
and recordkeeping requirements, Social security, Unemployment 
compensation, Wages.

24 CFR Part 257

    Administrative procedures, Practice and procedure, Mortgage 
insurance, Reporting and recordkeeping requirements.

24 CFR Part 4000

    Loan programs, Mortgage insurance, Access to information.

24 CFR Part 4001

    Administrative procedures, Practice and procedure, Mortgage 
insurance, Reporting and recordkeeping requirements.

    For the reasons set forth in the preamble, and under the authority 
of 42 U.S.C. 3535(d), amend title 24 of the Code of Federal Regulations 
as follows:

PART 200--INTRODUCTION TO FHA PROGRAMS

0
1. The authority citation for part 200 continues to read as follows:

    Authority: 12 U.S.C. 1702-1715z-21; 42 U.S.C. 3535(d).


0
2. Revise Sec.  200.1301 to read as follows:


Sec.  200.1301  Expiring programs--Savings clause.

    (a) No new loan assistance, additional participation, or new loans 
are being insured under the programs listed in

[[Page 41424]]

this section. Existing loan assistance, ongoing participation, or 
insured loans under the programs shall continue to be governed by 
regulations in effect as described in this section.
    (b) Any existing loan assistance, ongoing participation, or insured 
loans under the programs listed in this paragraph will continue to be 
governed by the regulations in effect as they existed immediately 
before October 11, 1995 (24 CFR parts 205, 209, 224-228, 240, 277, 278, 
1994 edition):
    (1) Part 205, Mortgage Insurance for Land Development (Title X of 
the National Housing Act, repealed by section 133(a) of the Department 
of Housing and Urban Development Reform Act of 1989 (Public Law 101-
235, approved December 15, 1989).
    (2) Part 209, Individual Homes; War Housing Mortgage Insurance (12 
U.S.C. 1736-1743).
    (3) Part 224, Armed Services Housing-Military Personnel (12 U.S.C. 
1736-1746a).
    (4) Part 225, Military Housing Insurance (12 U.S.C. 1748b).
    (5) Part 226, Armed Services Housing-Civilian Employees (12 U.S.C. 
1748h-1).
    (6) Part 227, Armed Services Housing-Impacted Areas (12 U.S.C. 
1478h-2).
    (7) Part 228, Individual Residences; National Defense Housing 
Mortgage Insurance (12 U.S.C. 1750 as amended by 42 U.S.C. 1591c).
    (8) Part 240, Mortgage Insurance on Loans for Fee Title Purchase 
(12 U.S.C. 1715z-5).
    (9) Part 277, Loans for Housing for the Elderly or Handicapped (12 
U.S.C. 1701q).
    (10) Part 278, Mandatory Meals Program in Multifamily Rental or 
Cooperative Projects for the Elderly or Handicapped (12 U.S.C. 1701q).
    (c) Any existing loan assistance, ongoing participation, or insured 
loans under the programs listed in this paragraph will continue to be 
governed by the regulations in effect as they existed immediately 
before May 11, 1996 (24 CFR parts 215, 222, and 237, 1995 edition):
    (1) Part 215, Rent Supplement Payments Program (12 U.S.C. 1715f).
    (2) Part 222, Service Person's Mortgage Insurance Program (12 
U.S.C. 1715m).
    (3) Part 237, Special Mortgage Insurance for Low and Moderate 
Income Families (12 U.S.C. 1715z-2).
    (d) Any existing loan assistance, ongoing participation, or insured 
loans under the program listed in this paragraph will continue to be 
governed by the regulations in effect as they existed immediately 
before December 26, 1996 (24 CFR part 233, 1995 edition):
    (1) Part 233, Experimental Housing Mortgage Insurance Program (12 
U.S.C. 1715x).
    (2) [Reserved]
    (e) Any existing loan assistance, ongoing participation, or insured 
loans under the program listed in this paragraph will continue to be 
governed by the regulations in effect as they existed immediately 
before August 15, 2014 (24 CFR part 257):
    (1) Part 257, HOPE for Homeowners Program (12 U.S.C. 1701z-22).
    (2) [Reserved]


Sec.  200.1302  [Removed]

0
3. Remove Sec.  200.1302.

PART 257 [Removed]

0
4. Remove part 257.

PART 4000 [Removed]

0
5. Remove part 4000.

PART 4001 [Removed]

0
6. Remove part 4001.

    Dated: July 8, 2014.
Shaun Donovan,
 Secretary.
[FR Doc. 2014-16613 Filed 7-15-14; 8:45 am]
BILLING CODE 4210-67-P