[Federal Register Volume 72, Number 165 (Monday, August 27, 2007)]
[Rules and Regulations]
[Pages 49124-49125]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-16890]
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Part IV
Department of Housing and Urban Development
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24 CFR Parts 320 and 350
Government National Mortgage Association: Mortgage-Backed Securities
(MBS) Program--Payments to Securityholders; Book-Entry Procedures; and
Financial Reporting; Final Rule
Federal Register / Vol. 72 , No. 165 / Monday, August 27, 2007 /
Rules and Regulations
[[Page 49124]]
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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
24 CFR Parts 320 and 350
[Docket No. FR-5063-F-02]
RIN 2503-AA19
Government National Mortgage Association: Mortgage-Backed
Securities (MBS) Program--Payments to Securityholders; Book-Entry
Procedures; and Financial Reporting
AGENCY: Government National Mortgage Association, HUD.
ACTION: Final rule.
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SUMMARY: On May 7, 2007, the Government National Mortgage Association
(Ginnie Mae) published a proposed rule that would restrict the issuance
of physical certificates representing Ginnie Mae mortgage-backed
securities (MBS) and clarify that book-entry securities may be
withdrawn from the Federal Reserve book-entry system after Ginnie Mae
has approved a request for physical certificates, also known as
definitive securities, in the same amount. The rule also proposed to
eliminate the requirement for a classified balance sheet. Ginnie Mae
did not receive any public comments on this rule. Ginnie Mae is
adopting, at this final rule stage, the proposed rule without change.
DATES: Effective Date: September 26, 2007.
FOR FURTHER INFORMATION CONTACT: Thomas R. Weakland, Senior Vice
President, Office of Program Operations, Government National Mortgage
Association, Department of Housing and Urban Development, 451 Seventh
Street, SW., Room B-133, Washington, DC 20410; telephone number (202)
475-4915 (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 Information Relay Service at (800) 877-8339.
SUPPLEMENTARY INFORMATION:
I. Background and the May 7, 2007, Proposed Rule
Ginnie Mae guarantees privately issued securities backed by trusts
or pools of mortgage loans that are insured or guaranteed by the
Federal Housing Administration, the Rural Housing Service, the
Department of Veterans Affairs, and the Department of Housing and Urban
Development (HUD). Ginnie Mae is a government corporation within HUD,
authorized by the National Housing Act (12 U.S.C. 1716 et seq.). The
regulations governing Ginnie Mae are located at 24 CFR part 300.
Ginnie Mae-guaranteed securities are issued in book-entry form.
Under current Ginnie Mae regulations, a securityholder may request that
the book-entry security be converted into certificated form after
initial issuance. Certificates are physical documentation of the
ownership of the security. On May 7, 2007 (72 FR 25925), Ginnie Mae
published a rule that proposed to revise its regulations to state that
for all securities issued after particular issue dates, physical
certificates may only be issued as approved by Ginnie Mae. Also, in the
proposed rule, Ginnie Mae proposed to clarify that book-entry
securities may be withdrawn after Ginnie Mae has approved a request for
definitive Ginnie Mae securities. Additionally, in order to conform to
industry practice, Ginnie Mae proposed to revise the financial
reporting rule for issuers participating in its MBS programs, by
removing the requirement that issuers submit classified balance sheets.
II. This Final Rule
At this final rule stage, Ginnie Mae is adopting the proposed rule
without change. The public comment period for the May 7, 2007, proposed
rule closed on July 6, 2007, and Ginnie Mae did not receive any
comments on the proposed rule. The revised regulations, which are
promulgated by this final rule, restrict the issuance of physical
certificates representing Ginnie Mae MBS and clarify that book-entry
securities may be withdrawn from the Federal Reserve book-entry system
after Ginnie Mae has approved a request for physical certificates, also
known as definitive securities, in the same amount. This rule also
eliminates the requirement for a classified balance sheet.
III. Findings and Certifications
Unfunded Mandates Reform Act
Title II of the Unfunded Mandates Reform Act of 1995 (2 U.S.C.
1531-1538) (UMRA) establishes requirements for federal agencies to
assess the effects of their regulatory actions on State, local, and
tribal governments, and the private sector. This rule does not impose
any Federal mandate on any State, local, or tribal government, or the
private sector within the meaning of UMRA.
Environmental Impact
This rule does not direct, provide for assistance or loan and
mortgage insurance for, or otherwise govern or regulate, real property
acquisition, disposition, leasing, rehabilitation, alteration,
demolition, or new construction, or establish, revise, or provide for
standards for construction or construction materials, manufactured
housing, or occupancy. Accordingly, under 24 CFR 50.19(c)(1), this rule
is categorically excluded from environmental review under the National
Environmental Policy Act of 1969 (42 U.S.C. 4321).
Regulatory Flexibility Act
The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) generally
requires an agency to conduct a regulatory flexibility analysis of any
rule subject to notice and comment rulemaking requirements, unless the
agency certifies that the rule will not have a significant economic
impact on a substantial number of small entities. This rule introduces
a streamlining amendment to the financial reporting regulations and a
change in the maintenance of Ginnie Mae book-entry and certificated
securities. Small entities will not be adversely affected by the more
streamlined financial reporting requirement or the book-entry
requirement; in fact, a more streamlined financial reporting
requirement may alleviate some burden. Furthermore, all such issuers,
regardless of size, are subject to the new requirements proposed by the
rule. Therefore, the undersigned certifies that this rule will not have
a significant economic impact on a substantial number of small
entities.
Executive Order 13132, Federalism
Executive Order 13132 (entitled ``Federalism'') prohibits an agency
from publishing any rule that has federalism implications if the rule
either imposes substantial direct compliance costs on State and local
governments and is not required by statute, or the rule preempts State
law, unless the agency meets the consultation and funding requirements
of section 6 of the order. This rule will not have federalism
implications and would not impose substantial direct compliance costs
on State and local governments or preempt State law within the meaning
of the order.
Paperwork Reduction Act
The information collection requirements contained in this rule are
currently approved by the Office of Management and Budget (OMB) under
section 3504(h) of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-
3520) and assigned OMB control number 2503-0033. An agency may not
conduct or sponsor, and a person is not required to respond to, a
collection of
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information, unless the collection displays a currently valid control
number.
List of Subjects in 24 CFR Parts 320 and 350
Mortgages, Securities.
0
Accordingly, for the reasons described in the preamble, HUD amends 24
CFR parts 320 and 350, as follows:
PART 320--GUARANTY OF MORTGAGE-BACKED SECURITIES
0
1. The authority citation for 24 CFR part 320 continues to read as
follows:
Authority: 12 U.S.C. 1721(g) and 1723a(a); and 42 U.S.C.
3535(d).
0
2. Revise Sec. 320.5(e) to read as follows:
Sec. 320.5 Securities.
* * * * *
(e) Issue Date. Securities backed by single-family mortgages with
issue dates of October 1, 1998, or before, serial notes with issue
dates of July 1, 2002, or before, and securities backed by multifamily
mortgages with issue dates of February 1, 2002, or before, have been
issued in certificated form. Securities issued after these dates will
be issued in book-entry form. The Association may approve the issuance
of certificated securities for good cause.
* * * * *
0
3. Revise Sec. 320.10 to read as follows:
Sec. 320.10 Financial reporting.
Issuers shall submit to the Association audited annual financial
statements within 90 days of their fiscal year end. All financial
statements shall include a balance sheet and a statement of operations
and cash flows. The audit shall be conducted in accordance with the
standards for financial audits of the U.S. Government Accountability
Office's Government Auditing Standards, issued by the Comptroller
General of the United States.
PART 350--BOOK-ENTRY PROCEDURES
0
4. The authority citation for 24 CFR part 350 continues to read as
follows:
Authority: 12 U.S.C. 1721(g) and 1723a(a); and 42 U.S.C.
3535(d).
0
5. Revise Sec. 350.8(a) to read as follows:
Sec. 350.8(a) Withdrawal of eligible book-entry Ginnie Mae securities
for conversion to definitive form.
(a) Eligible book-entry Ginnie Mae securities may be withdrawn from
the book-entry system after Ginnie Mae has approved a request for the
delivery of definitive Ginnie Mae securities in the same amount.
* * * * *
Dated: August 17, 2007.
Roy A. Bernardi,
Deputy Secretary.
[FR Doc. E7-16890 Filed 8-24-07; 8:45 am]
BILLING CODE 4210-67-P