HUD Removes HOPE for Homeowners Program Regulations

Targeted News Service

WASHINGTON, July 16 -- The U.S. Department of Housing & Urban Development published the following rule in the Federal Register:

Removal of HOPE for Homeowners Program Regulations

A Rule by the Housing and Urban Development Department on 07/16/2014

Publication Date: Wednesday, July 16, 2014

Agency: Department of Housing and Urban Development

Entry Type: Rule

Action: Final rule.

Document Citation: 79 FR 41422

Page: 41422 -41424 (3 pages)

CFR: 24 CFR 200

24 CFR 257

24 CFR 4000

24 CFR 4001

Agency/Docket Number: Docket No. FR-5790-F-01

RIN: 2501-AD68

Document Number: 2014-16613

Shorter URL: https://federalregister.gov/a/2014-16613

Action

Final Rule.

Summary

Through this rule, HUD removes regulations for the HOPE for Homeowners Program. The statutory authority for this program expired September 30, 2011. Because these regulations are no longer operative, they are being removed by this final rule. To the extent that local programs are still ongoing under the following repealed parts, the removal of these regulations does not affect the requirements for transactions entered into when the regulations were in effect. Loans made under the HOPE for Homeowners Program that are presently insured will continue to be governed by the regulations that existed immediately before the effective date of this final rule.

DATES:

Effective date: August 15, 2014.

FOR FURTHER INFORMATION CONTACT:

Camille E. Acevedo, Associate General Counsel for Legislation and Regulations, Office of General Counsel, Department of Housing and Urban Development, 451 7th Street SW., Room 10276, Washington, DC 20410; telephone number 202-708-1793 (this is not a toll-free number). Persons with hearing or speech impairments may access this number through TTY by calling the Federal Relay Service, toll-free at 800-877-8389.

SUPPLEMENTARY INFORMATION:

I. Background

The HOPE for Homeowners Act of 2008 (title IV of Division A of the Housing and Economic Recovery Act of 2008 (HERA) (Pub. L. 110-289, 122 Stat. 2654, approved July 30, 2008) added a new section 257 to the National Housing Act (NHA) (12 U.S.C. 1701z-22) that established a temporary program within HUD's Federal Housing Administration (FHA) that offered homeowners and mortgage loan holders (or servicers acting on their behalf) insurance on the refinancing of distressed mortgagors to support long-term sustainable homeownership and avoid foreclosure. Section 257 authorized FHA to refinance eligible mortgages commencing no earlier than October 1, 2008, and such authority to refinance expired on September 30, 2011. The fundamental principle behind the HOPE for Homeowners Act and the HOPE for Homeowners Program was that providing new equity for distressed homeowners may be an effective way to help homeowners avoid foreclosure.

The HOPE for Homeowners Act also established a Board of Directors to administer the program. The Board is composed of the Secretary of HUD, the Secretary of the Treasury, the Chairman of the Board of Governors of the Federal Reserve System, and the Chairperson of the Board of Directors of the Federal Deposit Insurance Corporation or their respective designees. Section 257(c)(1) of the NHA requires the Board to establish program requirements and standards for the HOPE for Homeowners Program and prescribe such regulations and provide such guidance as may be necessary or appropriate to implement such requirements and standards. Under the administration of the Board, the HOPE for Homeowners Program regulations were promulgated on October 6, 2008, at 73 FR 58418, and codified at 24 CFR part 4001. [1] By rule published on February 20, 2009, at 74 FR 7812, the Board of Directors adopted regulations that would govern access to records of the Board under the Freedom of Information Act. These regulations were codified at 24 CFR part 4000. [2]

The Emergency Economic Stabilization Act of 2008 (Pub. L. 110-343, 122 Stat. 3765, approved October 3, 2008) (EESA), specifically section 124 of EESA, amended section 257 of the NHA to provide additional flexibility and options to lenders participating in the HOPE for Homeowners Program. Among other things, section 124 of EESA authorizes upfront payments to a holder of an existing subordinate mortgage in lieu of providing the subordinate lien holder with a portion of HUD's 50 percent interest in the future appreciation of the value of the property. On January 7, 2009, at 74 FR 617, the Board published a rule to implement the changes made by EESA.

On May 20, 2009, the President signed into law the Helping Families Save Their Homes Act of 2009 (Division A of Pub. L. 111-22, 123 Stat. 1632, approved May 20, 2009) (Helping Families Act). Section 202 of the Helping Families Act makes several amendments to section 257 of the NHA to enhance operation of the HOPE for Homeowners Program and to provide additional flexibility to participants. In addition, the Helping Families Act transferred responsibility, including rulemaking authority, for the HOPE for Homeowners Program from the Board of Directors to the Secretary of HUD. The Board of Directors would assist the program in an advisory capacity to the Secretary of HUD. With the transfer of responsibility for administration of the program from the Board of Directors to HUD, HUD promulgated new regulations for the HOPE for Homeowners Program that incorporated the changes made by EESA and the Helping Families Act. The regulations were published on January 12, 2010, at 75 FR 1686, and codified at 24 CFR part 257.

This Final Rule

Although changes were made to the HOPE for Homeowners Program by EESA and the Helping Families Act, the expiration of the program was not altered and the authority for the HOPE for Homeowners Program expired on September 30, 2011. Accordingly, this final rule removes the regulations for the HOPE for Homeowners Program, codified in 24 CFR parts 257, 4000 and 4001. On June 10, 2011, FHA issued a mortgagee letter entitled "Termination of the HOPE for Homeowners (H4H) Program" that provided instructions to FHA-approved mortgagees on how to process cases during the phasing out of the HOPE for Homeowners Program. The mortgagee letter stated that to ensure close-out of the program by September 30, 2011, the date of expiration of the statutory authority for this program, FHA would not issue any case numbers for this program after July 29, 2011, and advised that eligible mortgages would not be insured after September 30, 2011. [3]

Mortgages presently insured under the program will continue to be governed by the regulations in effect August 15, 2014, and the contracts of mortgage insurance will not be affected by the removal of these regulations. Accordingly, this rule amends section 200.1301 (Expiring Programs--Savings Clause) of 24 CFR part 200, subpart W (Administrative Matters) to add a new paragraph (e) to section 200.1301, which lists the parts associated with the HOPE for Homeowners Program regulations and states that any existing loan assistance, ongoing participation, or insured loans under these parts will continue to be governed by the regulations in effect as they existed immediately before August 15, 2014. In addition to this amendment, HUD amends 24 CFR part 200, subpart W, to consolidate other expired regulations with savings clauses into a single section, section 200.1301. Accordingly, HUD removes section 200.1302, which listed additional expired programs.

[*Federal RegisterVJ 2014-07-16]

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