Office of the Assistant Secretary for Housing—Federal Housing Commissioner, HUD.
Notice; announcement of meeting.
This notice responds to recent inquiries to the Department about the status of HUD's update of a comprehensive set of closing forms and documents for use in the Federal Housing Administration (FHA) multifamily rental project and health care facility (excluding hospitals) mortgage insurance programs. On August 2, 2004, HUD issued for review and public comment 36 proposed revised closing forms. The public comment period closed on October 1, 2004, and HUD received submissions from 25 commenters. This notice advises the housing industry and interested members of the public that these documents remain in development and are not ready for issuance.
Although the closing documents remain in development, HUD understands the interest and concern of industry and other interested members of the public regarding the timetable for release of these documents in final form by HUD and the effective date of such forms. To address the interest and concerns regarding the status of development, this notice describes policy decisions that have been made on the closing documents, and the processes, which these documents must still undergo before final issuance. In addition to this notice, HUD will conduct a meeting, on Thursday, September 21, 2006, at HUD Headquarters, to address questions about the decisions that have been made and the processes that these documents must undergo before final issuance. HUD is inviting to this meeting, the 25 commenters, and, subject to room capacity limitations, other interested members of the public. HUD also will make phone lines available to expand the capacity of the members of the public that may participate in this meeting.
The purpose of this meeting is not for the purpose of reopening the public comment period on the closing documents. HUD will not accept new comments at the meeting, either orally or in writing, nor will HUD engage in a discussion of issues still under consideration. The purpose of the meeting is solely to brief the commenters and interested members of the public on the status of development of the revised closing forms. HUD believes that a briefing on the process of development of the forms will assist all interested parties in understanding the stages of review these forms must undergo prior to issuance. HUD intends to finalize and then implement the revised closing forms in calendar year 2007.
HUD will conduct the Closing Documents meeting on September 21, 2006.
The Closing Documents meeting will be held at 2 p.m. (Eastern time) on September 21, 2006, at HUD Headquarters for which the address is the Department of Housing and Urban Development, 451 Seventh Street, SW., Washington, DC.
Members of the public who are interested in attending this meeting in person or participating by phone should submit a request to HUD at the following e-mail address: FHAClosingDocsMeeting@hud.gov.
HUD will strive to honor requests on a first-come first-serve basis. However, HUD is also interested in ensuring that participation in this meeting, whether in person or by phone, reflects fair representation of the various sectors of the industry that will be affected by these closing documents. HUD therefore asks that parties submitting requests to participate in this meeting identify the basis for their interest in these closing documents.
Those who are confirmed to participate in this meeting, either in person or by phone, will receive additional information from HUD on how to participate in the meeting. Visitors attending the meeting will need to adhere to the security procedures of the HUD building.Start Further Info
FOR FURTHER INFORMATION CONTACT:
Charles H. (“Hank”) Williams, Office of Housing, Deputy Assistant Secretary for Multifamily Housing Programs, Department of Housing and Urban Development, 451 Seventh Street, SW., Room 6106, Washington, DC 20410-0500; telephone (202) 708-2495 (this is not a toll-free number); John J. Daly, Associate General Counsel for Insured Housing, Office of the General Counsel, Department of Housing and Urban Development, 451 Seventh Street, SW., Room 9226, Washington, DC 20410-0500; telephone (202) 708-1274 (this is not a toll-free number). Persons with hearing or speech disabilities may access this number through TTY by calling the toll-free Federal Information Relay Service at (800) 877-8339.
To Request Participation in the Meeting: A request to participate in the Start Printed Page 51843meeting must be submitted to the following e-mail address: FHAClosingDocsMeeting@hud.gov.End Further Info End Preamble Start Supplemental Information
On August 2, 2004, HUD published in the Federal Register (69 FR 42614) a notice that advised that, consistent with the Paperwork Reduction Act of 1995, HUD was publishing for public comment a comprehensive set of revised closing forms and documents for use in the FHA multifamily rental project and health care facility (excluding hospitals) programs. In addition to meeting the requirements of the Paperwork Reduction Act, HUD advised that it was seeking public comment for the purpose of receiving input from the lending industry and other interested parties in HUD's development and adoption of a set of instruments that offer the requisite protection to all parties in these FHA-insured mortgage programs while also being consistent with modern real estate practice and mortgage lending laws and procedures. The August 2, 2004, notice advised that HUD's closing forms were significantly outdated and needed a thorough review and update to reflect current HUD policies as well as current practices in real estate and mortgage financing transactions.
The August 2, 2004, notice followed an earlier informal solicitation of public comment on proposed revisions to the closing documents that were posted on HUD's Web site in March 2000. In response to the many comments received from the 2000 solicitation of public comment, significant revisions were made to the proposed closing documents and these revised documents were published in the Federal Register on August 2, 2004, for review and public comment.
Recent inquiries to HUD have asked whether issuance of these closing documents in final form is imminent, whether the revised documents will be required to be utilized upon 30 days following issuance in final form, and if so, that there would be sufficient time for industry to prepare for using the new closing documents.
Status of Update of Closing Documents
In response to the August 2, 2004, notice, HUD received 25 timely public comments. Although that is not a high number of public comments, the comments were very lengthy and detailed, and presented many individual comments and issues for HUD to consider in its revision of the closing documents, which had not been significantly revised in approximately 20 years. Several commenters offered their own edited versions of the closing documents with alternative language for HUD to consider. Additionally, changes suggested by commenters for certain documents would require changes to be made to other documents, and therefore a careful review of several documents was needed at times when a change was recommended only to one document.
The issuance of the closing documents in final form is not imminent. Although all comments submitted to HUD have been reviewed very carefully, the closing documents must still be reviewed by appropriate offices within HUD and then submitted to the Office of Management and Budget (OMB) for review. HUD recognizes the importance of these procedural safeguards and is committed to ensuring that the industry has sufficient time to make the transition to the new closing documents once they are issued in final.
In response to public comments on the proposed documents, the policy decisions that have been made include:
1. Health Care Facility (e.g., nursing homes) documents will be published again for public comment (e.g., on issues such as treatment of accounts receivable financing) as proposed documents;
2. Revised documents other than health care facilities (e.g., rental projects) will be published as final documents without further comment;
3. All revised documents will be updated periodically (e.g., very three (3) years to coincide with renewal of OMB numbers under the Paperwork Reductions Act);
4. Updates to revised documents, which are needed more frequently than periodic updates, will be made on a case-by-case basis;
5. Recourse liability for Key Principals will not be a HUD requirement, as proposed in the documents in the August 2, 2004, Federal Register notice;
6. A clear definition of “HUD Directives” will be provided; and
7. The effective date for the revised documents will provide time for processing pending FHA mortgage insurance applications as well as for training on the revised documents.
HUD has received requests that before issuing the final versions of the closing documents, HUD allow the industry and interested members of the public to review and comment on the documents a second time. Except for health care facility documents, HUD presently has no plans for a second round of comments (or a third round, considering the solicitation of comments in March 2000). Other inquirers have asked that, if there were no further opportunity for public comment, would HUD provide a briefing and respond to questions on the revised documents before they are required to be used. HUD has provided briefings on other rules or policies of widespread interest or significant impact before proceeding to implementation, and believes that a briefing may be appropriate for these closing documents.
September 21, 2006, Meeting
In consideration of the widespread interest about the revised closing documents as well as substantial concern about the changes that HUD may make in the final documents, HUD has decided it will hold a briefing on the status of revisions to the closing documents, primarily to outline the procedural steps remaining in the development process. HUD has given serious consideration to the many comments received on the proposed revised documents issued in August 2004. As an expression of its appreciation to all those who took the time to submit careful and thoughtful comments, HUD invites the 25 commenters to the September 21, 2006, meeting. The names of the commenters are attached as an appendix to this notice.
HUD reiterates that the purpose of this meeting is not to solicit or accept new and/or additional public comments of the closing documents, generally, or the specific policy decisions listed above.
HUD is conscientious in its effort to keep the industry apprised of its progress and included in it deliberative process. In addition to the invitation to the commenters to attend the meeting on the closing documents, the meeting will be open to interested members of the public as described in the ADDRESSES section of this notice above. The names of all participants in the September 21, 2006, meeting will be posted to the HUD Web site, following the meeting, and HUD also will post a summary of this meeting.Start Signature
Dated: August 24, 2006.
Brian D. Montgomery,
Assistant Secretary for Housing—Federal Housing Commissioner.
Appendix—List of Commenters
1. Hirschler Fleischer, PC, Richmond, VA.
2. Fenigstein & Kaufman, PC, Los Angeles, CA.
3. Capital Funding Group, Inc., Baltimore, MD.
4. Berkshire Mortgage Finance, Bethesda, MD.
5. CW Capital, Needham, MA.Start Printed Page 51844
6. Alan D. Ross, Law Corporation, Encino, CA.
7. Kantor, Taylor, McCarthy, PC, Seattle, WA.
8. CNA Surety, Sioux Falls, SD.
9. PNC Multifamily Capital, San Francisco, CA.
10. National Association of Home Builders, Washington, DC.
11. Vorys, Sater, Seymour and Pease, LLP, Cincinnati, OH.
12. National Leased Housing Association, Washington, DC.
13. The Surety Association of America, Washington, DC.
14. Goulston & Storrs, Counsellors at Law, Washington, DC.
15. Nixon Peabody LLP, Washington, DC.
16. Coan & Lyons, Washington, DC.
17. AGM Financial Services, Inc., Baltimore, MD.
18. Boston Capital, Boston, MA.
19. Highland Mortgage Company, Raleigh, NC.
20. Guardian Management, Portland, OR.
21. American Arbitration Association, New York, NY.
22. P/R Mortgage & Investment Corp., Carmel, IN.
23. Committee on Healthcare Financing, Washington, DC.
24. Mortgage Bankers Association, Washington, DC.
25. M&T Realty Capital Corporation, Baltimore, MD.End Supplemental Information
[FR Doc. 06-7267 Filed 8-30-06; 8:45 am]
BILLING CODE 4210-67-M