[Federal Register Volume 85, Number 73 (Wednesday, April 15, 2020)]
[Notices]
[Pages 21018-21019]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-07945]


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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

[Docket No. FR-7027-N-08]


60-Day Notice of Proposed Information Collection: Quality Control 
Requirements for Direct Endorsement Lenders; OMB Control No.: 2502-0600

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: June 15, 2020.

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. 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 copies 
of available documents can obtained from Ms. Pollard.

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: Quality Control Requirements for 
Direct Endorsement Lenders.
    OMB Approval Number: 2502-0600.
    Type of Request: Revision.
    Form Number: Not Applicable.
    Description of the need for the information and proposed use: Per 
24 CFR 202.8(3), a Direct Endorsement (DE) lender that sponsors third 
party originators (TPOs) is, ``responsible to the Secretary for the 
actions of its third party originators or mortgagees in originating 
loans or mortgages, unless applicable law or regulation requires 
specific knowledge on the part of the party to be held responsible.'' 
As a result, DE lenders are responsible for conducting quality control 
reviews on TPO originations of FHA-insured mortgage loans and ensuring 
that their Quality Control Plans contain this oversight provision. This 
creates an information collection burden on DE lenders, since these 
institutions must also conduct quality control on loans they originate 
and underwrite. DE lenders must conduct quality control reviews on a 
sample of loans that they originate or underwrite, including loans 
originated by TPOs. For the purposes of this information collection, it 
is assumed that the number of loans reviewed by each DE lender will 
comply with the Sample Size Standard and Sample Composition Standard 
described in HUD Handbook 4000.1, Section V.A.3.a.

[[Page 21019]]

    In addition, under 24 CFR 203.255(c) and (e), HUD conducts both 
pre- and post-endorsement reviews of loans submitted for FHA insurance 
by DE lenders. As part of those reviews, the Secretary is authorized to 
determine if there is any information indicating that any certification 
or required document is false, misleading, or constitutes fraud or 
misrepresentation on the part of any party, or that the mortgage fails 
to meet a statutory or regulatory requirement. In order to assist the 
Secretary with this directive, FHA requires that lenders self-report 
all findings of fraud and material misrepresentation, as well any 
material findings concerning the origination, underwriting, or 
servicing of the loan that the lender is unable to mitigate or 
otherwise resolve. The obligation to self-report these findings creates 
an additional information collection burden on DE lenders.
    In accordance with the requirements of 5 CFR 1320.8(d), a Notice 
soliciting comments on this collection of information was initially 
published in the Federal Register on December 21, 2010 (Volume 75, 
Number 244, page 80066). At that time, FHA still allowed for loan 
correspondents to participate in its programs and had not yet 
transitioned to the use of TPOs. Therefore, FHA estimated information 
collection burdens based on the estimated used of TPOs by DE lenders. 
FHA has since revised these estimates with real data that captures TPO 
originations of FHA-insured single-family mortgage loans. This revision 
has increased the information collection burden associated with OMB 
Control Number 2502-0600.
    Respondents: Active Title II Direct Endorsement (DE) lenders.
    Estimated Number of Respondents: 3,641.
    Estimated Number of Responses: 118,952.
    Frequency of Response: Annually.
    Average Hours per Response: 25.
    Total Estimated Burdens: 29,738.

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 
technology, e.g., permitting electronic submission of responses. HUD 
encourages interested parties to submit comment in response to these 
questions. The General Deputy Assistant Secretary for Housing, John L. 
Garvin, having reviewed and approved this document, is delegating the 
authority to electronically sign this document to submitter, Nacheshia 
Foxx, who is the Federal Register Liaison for HUD, for purposes of 
publication in the Federal Register.

C. Authority

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

    Dated: April 10, 2020.
Nacheshia Foxx,
Federal Register Liaison for the Department of Housing and Urban 
Development.
[FR Doc. 2020-07945 Filed 4-14-20; 8:45 am]
BILLING CODE 4210-67-P