Single Family Mortgage Insurance; Informed Consumer Choice Disclosure Notice: Technical Correction

[Federal Register Volume 64, Number 125 (Wednesday, June 30, 1999)]
[Rules and Regulations]
[Pages 34983-34984]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-16612]


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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

24 CFR Part 203

[Docket No. FR-4411-F-03]
RIN 2502-AH30


Single Family Mortgage Insurance; Informed Consumer Choice 
Disclosure Notice: Technical Correction

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

ACTION: Final rule; technical correction.

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SUMMARY: This rule makes a technical correction to HUD's rule on 
Informed Consumer Choice Disclosure Notice, published on June 2, 1999, 
to provide for a compliance date of September 2, 1999 for mortgagees 
subject to the requirements of this rule.

DATES: Effective Date: July 2, 1999.

FOR FURTHER INFORMATION CONTACT: Vance T. Morris, Director, Home

[[Page 34984]]

Mortgage Insurance Division, Office of Insured Single Family Housing, 
Room 9270, U.S. Department of Housing and Urban Development, 451 
Seventh Street, SW, Washington, DC 20410-8000; telephone (202) 708-2700 
(this is not a toll-free number). Hearing or speech-impaired 
individuals may access this number via TTY by calling the toll-free 
Federal Information Relay Service at (800) 877-8339.

SUPPLEMENTARY INFORMATION: On June 2, 1999 (64 FR 29758), HUD published 
a final rule to implement a recent statutory amendment to HUD's Federal 
Housing Administration (FHA) Single Family Mortgage Insurance Program. 
The statutory amendment requires an original lender to provide certain 
information, in the form of a disclosure notice, to prospective 
borrowers who have applied for an FHA-insured home mortgage; and that 
HUD develop this disclosure notice. Specifically, through the 
disclosure notice, the lender must provide the prospective FHA borrower 
with an analysis comparing the mortgage costs of the FHA-insured 
mortgage with the mortgage costs of other similar conventional mortgage 
products that the lender offers and that the borrower may qualify for. 
The disclosure notice must also provide information about when the 
requirement to pay FHA mortgage insurance premiums terminates. This 
final rule takes effect on July 2, 1999.
    In developing the Informed Consumer Choice Disclosure Notice final 
rule, HUD intended to provide mortgagees with sufficient time to 
prepare their own disclosure notices, based on HUD's model notice, once 
HUD issued its rule that provides the model notice. While HUD believed 
that it could not delay the effective date of the rule, as requested by 
some commenters, in view of the statutory requirement imposed on HUD to 
promptly develop the disclosure notice through rulemaking, HUD believes 
that it is not inconsistent with statutory intent to allow mortgagees 
the requisite time to design and develop their disclosure notices based 
on HUD's model notice. The June 2, 1999 inadvertently failed to include 
this additional time.
    Accordingly, this final rule makes a technical correction to the 
June 2, 1999 final rule to provide that the requirements of new 
Sec. 203.10 are applicable to any application for mortgage insurance 
authorized under section 203(b) of the National Housing Act (12 U.S.C. 
1709) that the mortgagee receives on or after September 2, 1999 (see 
Sec. 203.10(e)).

Other Matters

Justification for Final Rulemaking

    In general, the Department publishes a rule for public comment 
before issuing a rule for effect, in accordance with its own 
regulations on rulemaking at 24 CFR part 10. Part 10, however, does 
provide for exceptions from that general rule where the Department 
finds good cause to omit advance notice and public participation. The 
good cause requirement is satisfied when the prior public procedure is 
``impracticable, unnecessary, or contrary to the public interest'' (24 
CFR 10.1). The Department finds that good cause exists to publish this 
final rule for effect without first soliciting public comment, in that 
prior public procedure is unnecessary. Public procedure is unnecessary 
because this final rule simply makes a technical correction to its 
HUD's Informed Consumer Choice regulation to provide covered lenders 
with the necessary time to prepare their disclosure notices, based on 
HUD's model notice.

Regulatory Flexibility Act

    The Secretary, in accordance with the Regulatory Flexibility Act (5 
U.S.C. 605(b)), has reviewed and approved this final rule, and in so 
doing certifies that this rule will not have a significant economic 
impact on a substantial number of small entities. This rule only makes 
a technical correction to HUD's Informed Consumer Choice rule to 
provide for a compliance date of September 2, 1999 for covered lenders.

Environmental Impact

    This final rule is exempt from the environmental review procedures 
under HUD regulations in 24 CFR part 50 that implement section 
102(2)(C) of the National Environmental Policy Act of 1969 (42 U.S.C. 
4332) because of the exemption under Sec. 50.19(c)(1). This final rule 
only makes a technical correction to an existing regulation.

Executive Order 12612, Federalism

    The General Counsel, as the Designated Official under section 6(a) 
of Executive Order 12612, Federalism, has determined that this rule 
will not have substantial direct effects on States or their political 
subdivisions, or the relationship between the Federal Government and 
the States, or on the distribution of power and responsibilities among 
the various levels of government. No programmatic or policy changes 
will result from this rule that would affect the relationship between 
the Federal Government and State and local governments.

List of Subjects in 24 CFR Part 203

    Hawaiian Natives, Home improvement, Indians--lands, Loan programs--
housing and community development, Mortgage insurance, Reporting and 
recordkeeping requirements, Solar energy.

    For the reasons discussed in the preamble, HUD amends 24 CFR part 
203 as follows:

PART 203--SINGLE FAMILY MORTGAGE INSURANCE

    1. The authority citation for 24 CFR part 203 continues to read as 
follows:

    Authority: 12 U.S.C. 1709, 1710, 1715b, and 1715u; 42 U.S.C. 
3535(d).

    2. Paragraph (e) of Sec. 203.10 is revised to read as follows:


Sec. 203.10  Informed consumer choice for prospective FHA mortgagors.

* * * * *
    (e) Applicability. This section applies to any application for 
mortgage insurance authorized under section 203(b) of the National 
Housing Act (12 U.S.C. 1709) that the mortgagee receives on or after 
September 2, 1999.
* * * * *
    Dated: June 25, 1999.
William C. Apgar,
Assistant Secretary for Housing-Federal Housing Commissioner.
[FR Doc. 99-16612 Filed 6-25-99; 2:10 pm]
BILLING CODE 4210-27-P