[Federal Register Volume 81, Number 226 (Wednesday, November 23, 2016)]
[Notices]
[Pages 84608-84610]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-28245]


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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

[Docket No. FR-5913-N-34]


60-Day Notice of Proposed Information Collection: FHA Single 
Family Model Mortgage Documents

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

ACTION: Notice.

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SUMMARY: HUD is seeking approval from the Office of Management and 
Budget (OMB) for the information collection described below. In 
accordance with the Paperwork Reduction Act, HUD is requesting comment 
from all interested parties on the proposed collection of information. 
The purpose of this notice is to allow for 60 days of public comment.

DATES: Comments Due Date: January 23, 2017.

[[Page 84609]]


ADDRESSES: Interested persons are invited to submit comments regarding 
this proposal. Comments should refer to the proposal by name and/or OMB 
Control Number and should be sent to: Colette Pollard, Reports 
Management Officer, QDAM, Department of Housing and Urban Development, 
451 7th Street SW., Room 4176, Washington, DC 20410-5000; telephone 
202-402-3400 (this is not a toll-free number) or email at 
[email protected] for a copy of the proposed forms or other 
available information. Persons with hearing or speech impairments may 
access this number through TTY by calling the toll-free Federal Relay 
Service at (800) 877-8339.

FOR FURTHER INFORMATION CONTACT: Kevin Stevens, 451 7th Street SW., 
Washington, DC 20410; email Kevin L. [email protected]; or telephone 202-
402-2673. This is not a toll-free number. Persons with hearing or 
speech impairments may access this number through TTY by calling the 
toll-free Federal Relay Service at (800) 877-8339.

SUPPLEMENTARY INFORMATION: This notice informs the public that HUD is 
seeking approval from OMB for the information collection described in 
Section A.

A. Overview of Information Collection

    Title of Information Collection: FHA Single Family Model Mortgage 
Documents.
    OMB Approval Number: 2502-New.
    Type of Request: Approval of a new collection of information.
    Form Number: N/A.
    Description of the need for the information and proposed use:
    This notice advises of FHA's review and proposed revisions to the 
Single Family Model Forward Mortgage document. The majority of the 
proposed changes are conforming or technical in nature (e.g., 
correction of internal references and typographical errors). Included 
in this category is the proposed change to Section 19. As provided in 
FHA's Instructions for Model Mortgages (located at http://portal.hud.gov/hudportal/HUD?src=/program_offices/housing/sfh/model_documents) the FHA Model Forward Mortgage document is based 
largely on the Federal Home Loan Mortgage Corporation and Federal 
National Mortgage Association (the ``Government Sponsored Enterprises'' 
or ``GSEs'') security instrument covenants, with certain FHA-specific 
revisions. When incorporating the GSE covenants into the Model Forward 
Mortgage document, the second paragraph of Section 19 was 
unintentionally omitted, but reference to that paragraph was retained 
in the section heading, resulting in an apparent internal discrepancy 
in the Model Forward Mortgage. Because the omission of this paragraph 
was not identified as an FHA-Specific Modification (as that term is 
used in the Instructions for Model Mortgages), mortgagees have been 
free to adopt the analogous GSE covenant provision to resolve this 
discrepancy. Therefore, although the proposed change to Section 19 
appear substantive, it should bring the Model Forward Mortgage into 
closer conformity with current FHA-insured mortgages and industry 
standard.
    In addition to these technical changes, FHA is proposing one set of 
substantive changes to the Model Forward Mortgage, reflected in the 
judicial and non-judicial versions of Section 22 (hereinafter 
``Sections 22'') and Section 20. Prior to the September, 2014 
publication of the current Model Forward Mortgage, the former Model 
Forward Mortgage contained the following provision: ``[i]n many 
circumstances regulations issued by the Secretary will limit Lender 
rights, in the case of payment defaults, to require immediate payment 
in full and foreclose if not paid. This Security Instrument does not 
authorize acceleration or foreclosure if not permitted by regulations 
of the Secretary.'' (hereinafter ``Paragraph 9(d)''). Because Paragraph 
9(d) is not serve to again further this goal.
    The Department is also proposing a revision to Section 20, which 
generally provides that the borrower is not a third-party beneficiary 
to the contract of mortgage insurance between the lender and FHA. 
Legally, FHA borrowers have never been deemed third-party beneficiaries 
of the mortgage insurance contract between FHA and the mortgagee, and 
therefore, have had no authority to enforce any provisions thereof. 
However, as reflected in the proposed changes to Sections 22, the 
borrower and lender will enjoy contractual rights and obligations under 
the private mortgage contract that happen to mirror elements of the 
mortgage insurance contract because they both separately rely on HUD's 
regulations. By asserting rights under the private mortgage contract, 
even those that incorporate elements of the regulations forming the 
mortgage insurance contract, borrowers would not be enforcing the 
contract of mortgage insurance and FHA regulations as such, but rather 
enforcing the private contractual terms incorporated into the mortgage 
contract that mirror those regulations.
    While aiming to clearly delineate the lines between the private 
mortgage contract and the contract of mortgage insurance through the 
language contained in Section 20, the Department does not wish to cause 
any confusion concerning the borrower's ability to enforce his or her 
rights that have been granted through the incorporation of certain 
regulatory provisions. Therefore, for clarity, the Department is 
proposing a revision to Section 20 that eliminates any confusion 
regarding the borrower's ability to assert rights under the private 
mortgage contract with the mortgagee as provided in the proposed 
changes to Section 22. The proposed revision to Section 20 does not 
jeopardize the settled fact that borrowers are not third-party 
beneficiaries of the mortgage insurance contract and do not have the 
authority to enforce any provisions thereof. This is a consequence of 
well-established legal principals governing contractual relationships 
and private, which will remain unchanged not with standing the proposed 
revision. HUD expects, therefore, that the proposed change renders 
Section 20 more apparently consistent with the proposed changes to 
Sections 22, but does not intend to create third-party rights under the 
mortgage insurance contract.
    The following information regarding respondents and number of 
responses is based on information related to the actual legal mortgage 
document, not the model mortgage document.
    Affected Respondents: Businesses or other for-profit.
    Estimated Number of Respondents: 2,535.
    Estimated Number of Responses: 164,447.
    Frequency of Response: On Occasion.
    Average Hours per Response: .05.
    Total Estimated Burdens: 822 hours.

B. Solicitation of Public Comment

    This notice is soliciting comments from members of the public and 
affected parties concerning the collection of information described in 
Section A on the following:
    (1) Whether the proposed collection of information is necessary for 
the proper performance of the functions of the agency, including 
whether the information will have practical utility; (2) The accuracy 
of the agency's estimate of the burden of the proposed collection of 
information; (3) Ways to enhance the quality, utility, and clarity of 
the information to be collected; and (4) Ways to minimize the burden of 
the collection of information on those who are to respond; including 
through the use of appropriate automated collection techniques or other 
forms of information

[[Page 84610]]

technology, e.g., permitting electronic submission of responses.
    HUD encourages interested parties to submit comment in response to 
these questions.

    Authority:  Section 3507 of the Paperwork Reduction Act of 1995, 
44 U.S.C. Chapter 35.

    Dated: November 17, 2016.
 Janet M. Golrick,
Associate General Deputy Assistant Secretary for Housing Associate 
Deputy Federal Housing Commissioner.
[FR Doc. 2016-28245 Filed 11-22-16; 8:45 am]
 BILLING CODE 4210-67-P