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Notice

Proposed Collection; Comment Request

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AGENCY:

Federal Housing Finance Board.

ACTION:

Notice.

SUMMARY:

In accordance with the requirements of the Paperwork Reduction Act of 1995, the Federal Housing Finance Board (Finance Board) is seeking public comments concerning proposed changes to the information collection entitled “Federal Home Loan Bank Acquired Member Assets, Core Mission Activities, Investments and Advances,” which has been assigned control 3069-0058 by the Office of Management and Budget (OMB). The Finance Board intends to submit the entire information collection, with the proposed changes described in this Notice, to OMB for review and approval of a 3 year extension of the control number, which is due to expire on March 31, 2007.

DATES:

Interested persons may submit comments on or before January 3, 2006.

Comments: Submit comments by any of the following methods:

E-mail: comments@fhfb.gov.

Fax: 202-408-2580.

Mail/Hand Delivery: Federal Housing Finance Board, 1625 Eye Street NW., Washington DC 20006, ATTENTION: Public Comments.

Federal eRulemaking Portal: http://www.regulations.gov. Follow the instructions for submitting comments. If you submit your comment to the Federal eRulemaking Portal, please also send it by e-mail to the Finance Board at comments@fhfb.gov to ensure timely receipt by the agency.

Include the following information in the subject line of your submission: Federal Housing Finance Board. Proposed Collection; Comment Request: Federal Home Loan Bank Acquired Member Assets, Core Mission Activities, Investments and Advances. 2005-N-08.

We will post all public comments we receive on this notice without change, including any personal information you provide, such as your name and address, on the Finance Board Web site at http://www.fhfb.gov/​pressroom/​pressroom_​regs.htm.

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FOR FURTHER INFORMATION CONTACT:

David Roderer, Office of Supervision, by telephone at 202-408-2540, by electronic mail at rodererd@fhfb.gov, or by regular mail at the Federal Housing Finance Board, 1625 Eye Street NW., Washington DC 20006.

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SUPPLEMENTARY INFORMATION:

A. Need for and Use of the Information Collection

The Finance Board has authorized the Federal Home Loan Banks (Banks) to acquire mortgage loans and other assets from their members or housing associates under certain circumstances. 12 CFR part 955. The regulation refers to these assets as acquired member assets or AMA. As part of this regulatory authorization, each Bank that acquires residential mortgage loans must provide to the Finance Board certain loan-level data on a quarterly basis. The Finance Board uses this data to monitor the safety and soundness of the Banks and the extent to which the Banks are fulfilling their statutory housing finance mission through their AMA programs. See 12 U.S.C. 1422a(a).

While the Banks provide the AMA data directly to the Finance Board, each Bank initially must collect the information from the private-sector member or housing associate from which the Bank acquires the mortgage loan. Bank members and housing associates already collect the vast majority of the data the Finance Board requires in order to do business with Fannie Mae and Freddie Mac under regulatory requirements issued by the Department of Housing and Urban Development (HUD) and pursuant to the information collection requirements under the Home Mortgage Disclosure Act (HMDA). Thus, the Finance Board's information collection imposes only a minor incremental additional burden on Bank members and housing associates.

The OMB control number for the information collection, which expires on March 31, 2007, is 3069-0058. The likely respondents are institutions that sell AMA assets to Banks.

B. Proposed Changes to the Information Collection

As part of the reorganization of agency reporting requirements, the Finance Board plans to move the AMA information collection from 12 CFR part 955 (specifically, section 955.4 and Appendices A and B) to the Data Reporting Manual (DRM). See 70 FR 9551 (February 28, 2005). In addition to moving the information collection from the AMA rule to the DRM, the Finance Board is proposing to make the following changes to the AMA reporting requirements:

1. Conforming AMA Reporting Requirements to Existing Practice

In consultation with the Banks, the Finance Board already has made non-substantive changes to the AMA reporting requirements including refining the definitions of certain reporting elements [1] and adding new elements to improve database management and enhance monitoring.[2] The Finance Board also requires the Banks to report certain variables for all outstanding AMA residential mortgage loans, not just for those loans acquired during the calendar year, to better track performance, including delinquencies, of each loan.

2. Eliminating Data Elements

Based on analysis of the AMA data collected to date, the Finance Board is proposing to eliminate sparsely populated data fields and data fields the utility of which are unwarranted when balanced against the collection and reporting burden. These fields include the geographic indicator “Place Code” and the mortgage identifiers “Cooperative Unit Mortgage,” “Mortgage Purchased under the Banks” Community Investment Cash Advances (CICA) Programs” (for single-family AMA), and “Bank Real Estate Owned.” The Finance Board also proposes deleting the data field “Acquisition Type” due to the addition of the “Program Type” data element. Start Printed Page 66414

To avoid duplication, the Finance Board is proposing to require reporting of loan-level data on the loan, borrower, and property characteristics only at the end of the calendar quarter in which the loan is acquired. Currently, the Banks must report this data twice—in the loan-level report for the acquisition quarter and the fourth quarter.

3. Reducing Reporting Burden

To reduce the reporting burden, the Finance Board is proposing to require submission of loan-level data, which the Banks already collect and maintain, instead of aggregate data reports. The Finance Board also proposes eliminating data elements the agency collects through the membership database and directly from HUD, specifically the elements that describe the acquiring lender or member selling the AMA to the Bank and that contain census level demographic information related to the property.[3] To facilitate collection through the membership database, the Finance Board is proposing to add one new data element—the “Federal Housing Finance Board Identification (FHFBID) Number.”

To reduce reporting redundancy, the Finance Board proposes a separate pool-level data report instead of reporting pool variables in the loan-level data report. In addition to streamlining pool-level data reporting, the proposed changes would require the Banks to provide a quarterly update on loan pools so the Finance Board can monitor changes in the credit quality of pools and estimated or actual credit enhancements, which are important safety and soundness considerations. The pool-level report would include: “Bank District Flag,” “Pool Number,” 12 variables representing “Participation Percentages” of each of the 12 Banks in the pool, and 4 variables representing information on the pool credit enhancement and credit rating—“Pool Rating,” “Pool Credit Enhancement,” [4] “Recalculated Pool Rating,” and “Recalculated Credit Enhancement.”

4. Adding New Data Elements

The Finance Board is proposing to add several new fields to comply with revised federal data standards for classifying race and ethnicity. See 62 FR 58782 (October 30, 1997). The current data fields, “Borrower Race or National Origin” and “Co-Borrower Race or National Origin,” would be separately collected and reported as “Borrower Ethnicity,” “Co-Borrower Ethnicity,” “Borrower Race,” and “Co-Borrower Race.”

To better track and model prepayment and default rates of AMA, the Finance Board proposes adding new loan-level data elements: “Type of Credit Score;” “Adjustment Frequency;” “Negative Amortization;” “Current Unpaid Principal Balance;” “Current Coupon;” and “Loan Amount” (for multi-family AMA); and redefining “Borrower Credit Score” and “Co-Borrower Credit Score” to include, in addition to the Fair, Isaacs, Co. (FICO) score, the NextGen FICO credit score.

5. List of Data Elements

Both Appendix A, which lists the data elements for single-family residential mortgage loans, and Appendix B, which lists the data elements for multi-family residential mortgage loans, would be divided into three parts: Part I—loan-level data elements for all single-family and multi-family AMA acquired during the calendar quarter; Part II—loan-level data elements for all single-family and multi-family AMA outstanding in the calendar quarter; and Part III—pool-level data elements for pools of single-family and multi-family AMA.

The loan-level data elements in Part I generally reflect characteristics of the loan or the borrower(s) and should not change over the life of the loan. To simplify the current reporting requirements, a Bank would have to report loan-level data specified in Part I only during the calendar quarter in which it acquired the loan.

The loan-level data elements in Part II include data the Bank would have to report for all single-family and multi-family AMA outstanding in a calendar quarter. These data elements are more meaningful when monitored on a continuing basis. The Finance Board would use this information to create and maintain a database for safety and soundness monitoring, particularly of the Bank's risk management.

Part III includes data the Bank would have to report for pools or assets backed by pools. The Finance Board would use this information to monitor the safety and soundness of the Bank's AMA program.

C. Burden Estimate

The Finance Board estimates that the hour burden associated with the AMA collection will remain unchanged. The Finance Board estimates the total annual average number of respondents at 600, with 4 responses per respondent. The estimate for the average hours per response is 24 hours. The estimate for the total annual hour burden is 57,600 hours (600 respondents × 4 responses per respondent × 24 hours).

Bank members could incur additional one-time costs to be able to collect and report the loan-level data elements needed to allow for better tracking and modeling of prepayment and default rates of mortgage portfolios. The Finance Board estimates this additional, one-time cost at $120,000 ($2,000 × 600 members).

D. Comment Request

1. Proposed Changes to the AMA Database

The Finance Board requests comments on the utility and practicality of the proposed data elements, including whether additional elements should be included, deleted, or modified. The Finance Board also seeks comments on whether the data descriptions in Appendices A and B are clear.

2. Paperwork Reduction Act Burden Estimate

The Finance Board requests written comments on the following: (1) Whether the collection of information is necessary for the proper performance of Finance Board functions, including whether the information has practical utility; (2) the accuracy of the Finance Board's estimates of the burdens and costs of the collection of information; (3) ways to enhance the quality, utility, and clarity of the information collected; and (4) ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques or other forms of information technology.

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Dated: October 27, 2005.

By the Federal Housing Finance Board.

John P. Kennedy,

General Counsel.

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Footnotes

1.  The definition of: “County” was changed from the county name to the 3-digit Federal Information Processing Standard (FIPS) code for the county; “PMI Percent” was changed from percent of private mortgage insurance to percent of primary mortgage insurance, including mortgages insured by government agencies; “Credit Enhancement” was changed from the numeric code indicating the type of credit enhancement to the dollar value of the calculated loan-level credit enhancement; “Prepayment Penalty Terms” was changed to “Prepayment Penalty Date” and defined as the date that the application of the prepayment penalty ends; “Default Status” was changed to “Delinquency Status” and represents the delinquency status of the loan at the end of the reporting period; and “Interest Rate” was defined as the note rate on the loan at the time of loan origination.

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2.  “Pool Rating” for the letter credit rating of the loan pool was added to the loan-level data reporting requirement. New variables added for database management purposes ere: “Program Type” and “Pool Number.”

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3.  These elements are: “Acquiring Lender Institution,” “Acquiring Lender City,” “Acquiring Lender State,” “Type of Acquiring Lender Institution,” “Census Tract—Percent Minority,” “Census Tract—Median Income,” “Local Area Median Income,” “Tract Income Ratio,” “Area Median Family Income,” “Borrower Income Ratio,” “Unit—Affordable Category,” “Unit Type XX—Affordability Level” (for multi-family AMA), and “Geographically Targeted Indicator.”

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4.  The new data element “Pool Credit Enhancement” would replace the current data element “Credit Enhancement,” which itself has been redefined since the current rule was adopted. See n.1. The Finance Board has effectively been collecting pool-level credit enhancement values because it aggregates the loan-level credit enhancement values currently collected. Standing alone, however, the loan-level credit enhancement values are not as meaningful as the pool-level values, and the Finance Board, therefore, is proposing to collect the pool-level values directly.

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[FR Doc. 05-21794 Filed 11-1-05; 8:45 am]

BILLING CODE 6725-01-C