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Department of Housing and Urban Development Monday, May 3, 2004 Part II Department of Housing and Urban Development 24 CFR Part 81 HUD’s Proposed Housing Goals for the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac) for the Years 2005–2008 and Amendments to HUD’s Regulation of Fannie Mae and Freddie Mac; Proposed Rule VerDate jul<14>2003 02:21 May 01, 2004 Jkt 203001 PO 00000 Frm 00001 Fmt 4717 Sfmt 4717 E:\FR\FM\03MYP2.SGM 03MYP2 24228 Federal Register / Vol. 69, No. 85 / Monday, May 3, 2004 / Proposed Rules DEPARTMENT OF HOUSING AND HUD; codifying a process for handling General Counsel for Government URBAN DEVELOPMENT errors, omissions or discrepancies in a Sponsored Enterprises/RESPA, Office of GSE’s current year-end data the General Counsel, Room 9262, 24 CFR Part 81 submissions; clarifying that HUD may telephone 202–708–3137. The address [Docket No. FR–4790–P–01] exercise its goal counting authority by for all of these persons is Department of adjusting a GSE’s housing goals Housing and Urban Development, 451 RIN 2501–AC92 performance for a current year by Seventh Street, SW., Washington, DC, deducting miscredits from a previous 20410. Persons with hearing and speech HUD’s Proposed Housing Goals for the year caused by errors, omissions or impairments may access the phone Federal National Mortgage Association discrepancies in a GSE’s prior year data numbers via TTY by calling the Federal (Fannie Mae) and the Federal Home submissions (including the AHAR); and Information Relay Service at (800) 877– Loan Mortgage Corporation (Freddie clarifying that HUD may take 8399. Mac) for the Years 2005–2008 and enforcement action against the GSEs, as SUPPLEMENTARY INFORMATION: Amendments to HUD’s Regulation of authorized by FHEFSSA and as Fannie Mae and Freddie Mac implemented by HUD’s regulations at 24 I. General AGENCY: Office of the Assistant CFR part 81, subpart G, for the A. Statutory and Regulatory Background Secretary for Housing—Federal Housing submission of non-current, inaccurate or In 1968, at the time Fannie Mae was Commissioner, HUD. incomplete report(s), data or chartered in its current form as a information. ACTION: government sponsored enterprise (GSE), Proposed rule. In addition, HUD is proposing in this Congress assigned the Department of rulemaking to amend the definitions of SUMMARY: Through this proposed rule, Housing and Urban Development ‘‘Underserved area’’, ‘‘Metropolitan the Department of Housing and Urban (‘‘HUD’’ or ‘‘the Department’’) area’’ and ‘‘Minority’’, and to add a new Development is proposing new housing regulatory authority over Fannie Mae definition of the term ‘‘Home Purchase goal levels for the Federal National pursuant to section 802(ee) of the Mortgage’. Mortgage Association (Fannie Mae) and Housing and Urban Development Act of the Federal Home Loan Mortgage The rulemaking also invites comments on whether HUD should have 1968 (Pub. L. 90–448, approved August Corporation (Freddie Mac) (collectively, 1, 1968, 82 Stat. 476, 541) (HUD Act of the Government Sponsored Enterprises, a standard econometrically based method for imputing the distribution of 1968). In 1989, Congress granted the or GSEs) for calendar years 2005 Department essentially identical through 2008. The new housing goal GSE-purchased mortgages that lack income data, and whether HUD should authority over another GSE, Freddie levels are proposed in accordance with Mac, pursuant to section 731 of the the Federal Housing Enterprises revise its definitions or other rules (including the counting rules) to ensure Financial Institutions Reform, Recovery, Financial Safety and Soundness Act of and Enforcement Act of 1989 (FIRREA) 1992 (FHEFSSA) and govern the that only those large scale GSE transactions that are consistent with the (Pub. L. 101–73, approved August 9, purchase by Fannie Mae and Freddie 1989), which amended the Federal Mac of mortgages financing low- and statute and its purposes qualify under the goals. Home Loan Mortgage Corporation moderate-income housing, special Charter Act, Pub. L. 91–351, approved DATES: Comments must be submitted on affordable housing, and housing in July 24, 1970 (the ‘‘Freddie Mac Charter or before: July 2, 2004. central cities, rural areas and other Act’’). underserved areas. ADDRESSES: Interested persons are Under section 802(ee) of the HUD Act To increase homeownership invited to submit written comments of 1968, HUD was authorized to require opportunities for families targeted by regarding this proposed rule to the that a ‘‘reasonable portion’’ of Fannie the three housing goals, this rule also Regulations Division, Office of General Mae’s mortgage purchases be related to would establish new subgoals for the Counsel, Room 10276, Department of the national goal of providing adequate GSEs’ acquisitions of home purchase Housing and Urban Development, 451 housing for low- and moderate-income loans that qualify for each of the Seventh Street, SW., Washington, DC families. Accordingly, in 1978, the housing goals. Under the proposed rule, 20410. All communications should refer Department established by regulation performance under these subgoals to the above docket number and title. two housing goals for Fannie Mae: a would be calculated as percentages of Facsimile (FAX) comments and e-mail goal for mortgages on low- and the GSEs’ total acquisitions of home comments are not acceptable. A copy of moderate-income housing and a goal for purchase mortgages for single-family, each communication submitted will be mortgages on housing located in central owner-occupied properties located in available for public inspection and cities (see 24 CFR 81.16(d) and 81.17 of metropolitan areas meeting each of the copying between 8 a.m. and 5 p.m. HUD’s former rules at 43 FR 39203, three housing goals. weekdays at the above address. published August 15, 1978). HUD The Department also proposes to FOR FURTHER INFORMATION CONTACT: established each goal at the level of 30 revise the existing rule to provide Sandra Fostek, Director, Office of percent of Fannie Mae’s conventional enhanced requirements to ensure GSE Government Sponsored Enterprises, mortgage purchases. data integrity by: codifying the existing Office of Housing, Room 3150, Similar housing goals for Freddie Mac authority that authorizes HUD to telephone 202–708–2224. For questions were proposed by the Department in independently verify the accuracy and on data or methodology, contact John L. 1991 (at 56 FR 41022, published August completeness of data, information and Gardner, Director, Financial Institutions 16, 1991) but were not finalized prior to reports provided by the GSEs; Regulation Division, Office of Policy October 1992, when Congress enacted establishing certification requirements Development and Research, Room 8212, FHEFSSA and revised the Department’s for the submission of the GSEs’ Annual telephone (202) 708–1464. For legal GSE regulatory authorities, including Housing Activities Report (AHAR) and questions, contact Kenneth A. Markison, establishing new requirements for the for such other report(s), data Assistant General Counsel for housing goals. submission(s) or information for which Government Sponsored Enterprises/ Specifically, FHEFSSA established certification is requested in writing by RESPA or Paul S. Ceja, Deputy Assistant the Office of Federal Housing Enterprise VerDate jul<14>2003 02:21 May 01, 2004 Jkt 203001 PO 00000 Frm 00002 Fmt 4701 Sfmt 4702 E:\FR\FM\03MYP2.SGM 03MYP2 Federal Register / Vol. 69, No. 85 / Monday, May 3, 2004 / Proposed Rules 24229 Oversight (OFHEO) as the GSEs’ safety GSEs through 1995 while the thereafter, the annual Housing Goals for and soundness regulator and affirmed, Department completed its development each of those years were to be clarified and expanded the Secretary of of post-transition Housing Goals (see 59 established at 50 percent, 31 percent, Housing and Urban Development’s GSE FR 61504). and 20 percent, respectively; regulatory authority. FHEFSSA also In 1995, the Department issued a (2) Made temporary bonus points provided that, except for certain proposed rule (60 FR 9154, published available for the GSEs’ purchases of exclusive authorities of the Director of February 16, 1995) and, several months mortgages for small multifamily OFHEO, and all other matters relating to later, a final rule (60 FR 61846, properties with 5 to 50 units, and, above the GSEs’ safety and soundness, the published December 1, 1995) (the a threshold, for single-family 2- to 4-unit Secretary had general regulatory power ‘‘Housing Goals 1995 final rule’’) owner-occupied rental properties, for over the GSEs. (See section 1321 of establishing the Housing Goals for the calendar years 2001 through 2003 (but FHEFSSA, 12 U.S.C. 4541.) years 1996 through 1999, along with not for subsequent years, unless Further, FHEFSSA detailed and regulations implementing FHEFSSA. determined by HUD); expanded the Department’s The Housing Goals 1995 final rule (3) Established a temporary responsibilities to establish, monitor, provided that the Housing Goals for adjustment factor (‘‘TAF’’) for Freddie and enforce housing goals for the GSEs’ 1999 would continue beyond 1999 if the Mac’s purchases of mortgages on large purchases of mortgages that finance Department elected not to change the multifamily properties (over 50 units) housing for low- and moderate-income Housing Goals, and that HUD could for calendar years 2001 through 2003; families (the ‘‘Low- and Moderate- change the level of the Housing Goals (4) Prohibited high-cost
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