81 FR 84608 - 60-Day Notice of Proposed Information Collection: FHA Single Family Model Mortgage Documents

DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

Federal Register Volume 81, Issue 226 (November 23, 2016)

Page Range		84608-84610
FR Document		2016-28245

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.

Federal Register, Volume 81 Issue 226 (Wednesday, November 23, 2016)

[Federal Register Volume 81, Number 226 (Wednesday, November 23, 2016)]
[Notices]
[Pages 84608-84610]
From the Federal Register Online  [www.thefederalregister.org]
[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

Federal Register / Vol. 81, No. 226 / Wednesday, November 23, 2016 / Notices 84609

ADDRESSES: Interested persons are to that paragraph was retained in the While aiming to clearly delineate the
invited to submit comments regarding section heading, resulting in an lines between the private mortgage
this proposal. Comments should refer to apparent internal discrepancy in the contract and the contract of mortgage
the proposal by name and/or OMB Model Forward Mortgage. Because the insurance through the language
Control Number and should be sent to: omission of this paragraph was not contained in Section 20, the Department
Colette Pollard, Reports Management identified as an FHA-Specific does not wish to cause any confusion
Officer, QDAM, Department of Housing Modification (as that term is used in the concerning the borrower’s ability to
and Urban Development, 451 7th Street Instructions for Model Mortgages), enforce his or her rights that have been
SW., Room 4176, Washington, DC mortgagees have been free to adopt the granted through the incorporation of
20410–5000; telephone 202–402–3400 analogous GSE covenant provision to certain regulatory provisions. Therefore,
(this is not a toll-free number) or email resolve this discrepancy. Therefore, for clarity, the Department is proposing
at Colette.Pollard@hud.gov for a copy of although the proposed change to a revision to Section 20 that eliminates
the proposed forms or other available Section 19 appear substantive, it should any confusion regarding the borrower’s
information. Persons with hearing or bring the Model Forward Mortgage into ability to assert rights under the private
speech impairments may access this closer conformity with current FHA- mortgage contract with the mortgagee as
number through TTY by calling the toll- insured mortgages and industry provided in the proposed changes to
free Federal Relay Service at (800) 877– standard. Section 22. The proposed revision to
8339. In addition to these technical changes, Section 20 does not jeopardize the
FOR FURTHER INFORMATION CONTACT:
FHA is proposing one set of substantive settled fact that borrowers are not third-
Kevin Stevens, 451 7th Street SW., changes to the Model Forward party beneficiaries of the mortgage
Mortgage, reflected in the judicial and insurance contract and do not have the
Washington, DC 20410; email Kevin L.
non-judicial versions of Section 22 authority to enforce any provisions
Stevens@hud.gov; or telephone 202–
(hereinafter ‘‘Sections 22’’) and Section thereof. This is a consequence of well-
402–2673. This is not a toll-free number.
20. Prior to the September, 2014 established legal principals governing
Persons with hearing or speech
publication of the current Model contractual relationships and private,
impairments may access this number
Forward Mortgage, the former Model which will remain unchanged not with
through TTY by calling the toll-free
Forward Mortgage contained the standing the proposed revision. HUD
Federal Relay Service at (800) 877–8339.
following provision: ‘‘[i]n many expects, therefore, that the proposed
SUPPLEMENTARY INFORMATION: This circumstances regulations issued by the
notice informs the public that HUD is change renders Section 20 more
Secretary will limit Lender rights, in the apparently consistent with the proposed
seeking approval from OMB for the case of payment defaults, to require
information collection described in changes to Sections 22, but does not
immediate payment in full and foreclose intend to create third-party rights under
Section A. if not paid. This Security Instrument the mortgage insurance contract.
A. Overview of Information Collection does not authorize acceleration or The following information regarding
foreclosure if not permitted by respondents and number of responses is
Title of Information Collection: FHA regulations of the Secretary.’’
Single Family Model Mortgage based on information related to the
(hereinafter ‘‘Paragraph 9(d)’’). Because actual legal mortgage document, not the
Documents. Paragraph 9(d) is not serve to again
OMB Approval Number: 2502–New. model mortgage document.
further this goal. Affected Respondents: Businesses or
Type of Request: Approval of a new The Department is also proposing a
collection of information. other for-profit.
revision to Section 20, which generally Estimated Number of Respondents:
Form Number: N/A. provides that the borrower is not a 2,535.
Description of the need for the third-party beneficiary to the contract of Estimated Number of Responses:
information and proposed use: mortgage insurance between the lender 164,447.
This notice advises of FHA’s review and FHA. Legally, FHA borrowers have Frequency of Response: On Occasion.
and proposed revisions to the Single never been deemed third-party Average Hours per Response: .05.
Family Model Forward Mortgage beneficiaries of the mortgage insurance Total Estimated Burdens: 822 hours.
document. The majority of the proposed contract between FHA and the
changes are conforming or technical in mortgagee, and therefore, have had no B. Solicitation of Public Comment
nature (e.g., correction of internal authority to enforce any provisions This notice is soliciting comments
references and typographical errors). thereof. However, as reflected in the from members of the public and affected
Included in this category is the proposed changes to Sections 22, the parties concerning the collection of
proposed change to Section 19. As borrower and lender will enjoy information described in Section A on
provided in FHA’s Instructions for contractual rights and obligations under the following:
Model Mortgages (located at http:// the private mortgage contract that (1) Whether the proposed collection
portal.hud.gov/hudportal/HUD?src=/ happen to mirror elements of the of information is necessary for the
program_offices/housing/sfh/model_ mortgage insurance contract because proper performance of the functions of
documents) the FHA Model Forward they both separately rely on HUD’s the agency, including whether the
Mortgage document is based largely on regulations. By asserting rights under information will have practical utility;
the Federal Home Loan Mortgage the private mortgage contract, even (2) The accuracy of the agency’s
Corporation and Federal National those that incorporate elements of the estimate of the burden of the proposed
Mortgage Association (the ‘‘Government regulations forming the mortgage collection of information; (3) Ways to
mstockstill on DSK3G9T082PROD with NOTICES

Sponsored Enterprises’’ or ‘‘GSEs’’) insurance contract, borrowers would not enhance the quality, utility, and clarity
security instrument covenants, with be enforcing the contract of mortgage of the information to be collected; and
certain FHA-specific revisions. When insurance and FHA regulations as such, (4) Ways to minimize the burden of the
incorporating the GSE covenants into but rather enforcing the private collection of information on those who
the Model Forward Mortgage document, contractual terms incorporated into the are to respond; including through the
the second paragraph of Section 19 was mortgage contract that mirror those use of appropriate automated collection
unintentionally omitted, but reference regulations. techniques or other forms of information

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84610 Federal Register / Vol. 81, No. 226 / Wednesday, November 23, 2016 / Notices

technology, e.g., permitting electronic Consulting, Inc.: Verdi Consulting, Inc., Mortgage Loan Sale Policy
submission of responses. 8400 Westpark Drive, 4th Floor, HUD reserves the right to remove
HUD encourages interested parties to McLean, VA 22102, Attention: HUD mortgage loans from HVLS 2017–1 at
submit comment in response to these SFLS Loan Sale Coordinator, Fax: 1– any time prior to the Award Date. HUD
questions. 703–584–7790. also reserves the right to reject any and
Authority: Section 3507 of the Paperwork FOR FURTHER INFORMATION CONTACT: John all bids, in whole or in part, and include
Reduction Act of 1995, 44 U.S.C. Chapter 35. Lucey, Director, Asset Sales Office, any reverse mortgage loans in a later
Dated: November 17, 2016. Room 3136, Department of Housing and sale. Deliveries of mortgage loans will
Janet M. Golrick, Urban Development, 451 Seventh Street occur in conjunction with settlement
Associate General Deputy Assistant Secretary
SW., Washington, DC 20410–8000; and servicing transfer, approximately 30
for Housing Associate Deputy Federal telephone 202–708–2625, extension to 45 days after the Award Date.
Housing Commissioner. 3927. Hearing- or speech-impaired The HVLS 2017–1 reverse mortgage
[FR Doc. 2016–28245 Filed 11–22–16; 8:45 am] individuals may call 202–708–4594 loans were insured by and were
BILLING CODE 4210–67–P
(TTY). These are not toll-free numbers. assigned to HUD pursuant to section
SUPPLEMENTARY INFORMATION: 255 of the National Housing Act, as
HUD announces its intention to sell in amended. The sale of the reverse
DEPARTMENT OF HOUSING AND HVLS 2017–1 due and payable mortgage loans is pursuant to section
URBAN DEVELOPMENT Secretary-held reverse mortgage loans. 204(g) of the National Housing Act.
The loans consist of first liens secured
[Docket No. FR–5993–N–01] Mortgage Loan Sale Procedure
by single family, vacant residential
Notice of HUD Vacant Loan Sales properties, where all borrowers are HUD selected an open competitive
(HVLS 2017–1) deceased and no borrower is survived whole-loan sale as the method to sell
by a non-borrowing spouse. the mortgage loans for this specific sale
AGENCY: Office of the Assistant A listing of the mortgage loans is transaction. For HVLS 2017–1, HUD has
Secretary for Housing—Federal Housing included in the due diligence materials determined that this method of sale
Commissioner, HUD. made available to qualified bidders. The optimizes HUD’s return on the sale of
ACTION: Notice of sales of reverse mortgage loans will be sold without these loans, affords the greatest
mortgage loans. FHA insurance and with servicing opportunity for all qualified bidders to
released. HUD will offer qualified bid on the mortgage loans, and provides
SUMMARY: This notice announces HUD’s bidders an opportunity to bid the quickest and most efficient vehicle
intention to competitively offer multiple competitively on the mortgage loans. for HUD to dispose of the mortgage
residential reverse mortgage pools The loans are expected to be offered in loans.
consisting of approximately 1,700 five regional pools.
reverse mortgage notes secured by Bidder Ineligibility
properties with an aggregate broker The Bidding Process In order to bid in HVLS 2017–1 as a
price opinion of approximately $220 The BIP describes in detail the qualified bidder, a prospective bidder
million. The sale will consist of due and procedure for bidding in HVLS 2017–1. must complete, execute and submit both
payable Secretary-held reverse mortgage The BIP also includes a standardized a Confidentiality Agreement and a
loans. The mortgage loans consist of non-negotiable Conveyance, Assignment Qualification Statement acceptable to
first liens secured by single family, and Assumption Agreement for HVLS HUD. In the Qualification Statement,
vacant residential properties, where all 2017–1 (CAA). Qualified bidders will be the prospective bidder must provide
borrowers are deceased and no borrower required to submit a deposit with their certain representations and warranties
is survived by a non-borrowing spouse. bid. Deposits are calculated based upon regarding the prospective bidder,
This notice also generally describes each qualified bidder’s aggregate bid including but not limited to (i) the
the bidding process for the sale and price. prospective bidder’s board of directors,
certain persons who are ineligible to HUD will evaluate the bids submitted (ii) the prospective bidder’s direct
bid. This is the first sale offering of its and determine the successful bid, in parent, (iii) the prospective bidder’s
type and the sale will be held on terms of the best value to HUD, in its subsidiaries, (iv) any related entity with
November 30, 2016. sole and absolute discretion. If a which the prospective bidder shares a
DATES: For this sale action, the Bidder’s qualified bidder is successful, the common officer, director, subcontractor
Information Package (BIP) is expected to qualified bidder’s deposit will be non- or sub-contractor who has access to
be made available to qualified bidders refundable and will be applied toward Confidential Information as defined in
on or about October 28, 2016. Bids for the purchase price. Deposits will be the Confidentiality Agreement or is
the HVLS 2017–1 sale will be accepted returned to unsuccessful bidders. involved in the formation of a bid
on the Bid Date of November 30, 2016 This notice provides some of the basic transaction (collectively the ‘‘Related
(Bid Date). HUD anticipates that terms of sale. The CAA, which is Entities’’), and (v) the prospective
award(s) will be made on or about included in the BIP, provides bidder’s repurchase lenders. The
December 1, 2016 (the Award Date). comprehensive contractual terms and prospective bidder is ineligible to bid on
ADDRESSES: To become a qualified conditions. To ensure a competitive any of the reverse mortgage loans
bidder and receive the BIP, prospective bidding process, the terms of the included in HVLS 2017–1 if the
bidders must complete, execute, and prospective bidder, its Related Entities
mstockstill on DSK3G9T082PROD with NOTICES

bidding process and the CAA are not
submit a Confidentiality Agreement and subject to negotiation. or its repurchase lenders, is any of the
a Qualification Statement acceptable to following, unless other exceptions apply
HUD. Both documents are available via Due Diligence Review as provided for the in Qualification
the HUD Web site at: http:// The BIP describes how qualified Statement.
www.hud.gov/sfloansales or via: http:// bidders may access the due diligence 1. An individual or entity that is
www.verdiassetsales.com. Please mail materials remotely via a high-speed currently debarred, suspended, or
and fax executed documents to Verdi Internet connection. excluded from doing business with

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Document Created: 2016-11-23 05:30:32
Document Modified: 2016-11-23 05:30:32

Category		Regulatory Information
Collection		Federal Register
sudoc Class		AE 2.7: GS 4.107: AE 2.106:
Publisher		Office of the Federal Register, National Archives and Records Administration
Section		Notices
Action		Notice.
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.
FR Citation		81 FR 84608