Notice of Request for Comments on Information Collection Package

DEPARTMENT OF AGRICULTURE

Rural Housing Service

Notice of Request for Comments on Information Collection Package

AGENCY: Rural Housing Service, USDA.

ACTION: Proposed collection; comments request.

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SUMMARY: In accordance with the Paperwork Reduction Act of 1995, Public

Law 104-13, this Notice announces the Rural Housing Service's (RHS's)

intent to request approval of an Information Collection package in

support of the direct Single Family Housing (SFH) programs of the

Agency.

DATES: Comments must be received no later than close of business

September 16, 1996. Comments received after such date will not be

considered; therefore, the commentor should allow sufficient mailing

and delivery time. RHS encourages the submission of comments within 30

days.

FOR FURTHER INFORMATION CONTACT: For inquiries on the Information

Collection Package, contact Barbara Williams, Information Collection

Coordinator, RHS at (202) 720-9734. For program content, contact David

J. Villano, Special Assistant to the Administrator, RHS at (202) 720-

1628. Comments should be submitted to Ms. Williams at USDA--RHS, 1400

Independence Avenue, SW, Ag Stop 0743, Washington, D.C. 20250-0743.

SUPPLEMENTARY INFORMATION:

Title: Direct Single Family Housing Handbooks Supporting 7 CFR Part

3550.

Type of Request: New information collection.

Abstract: On April 8, 1996, the RHS published a Proposed Rule in

the Federal Register reengineering and reinventing the direct Section

502 and 504 Single Family Housing (SFH) programs (61 FR 15395). That

action proposed the consolidation of 16 separate regulations guiding

the direct SFH programs into one streamlined rule. RHS proposed a

significant 90 percent reduction in CFR coverage. To accomplish this

objective, in part, we removed administrative guidance from the 16

regulations and proposed to provide same in Handbooks which would not

be published in the Federal Register. In our Proposed Rule, we stated

we would publish a Notice in the Federal Register on or about July 1,

[[Page 37441]]

1996, providing a 60-day comment period on the information collection

requirements of the Handbooks. This Notice accomplishes that proposal.

Section 501 of Title V of the Housing Act of 1949, as amended,

authorizes the Secretary of Agriculture to administer such programs and

to prescribe regulations to ensure that these loans and grants made

with Federal Funds are made to eligible applicants for authorized

purposes, and that subsequent servicing and benefits provided to

borrowers are consistent with the authorizing statute.

RHS offers a supervised credit program to extend financial

assistance to construct, improve, alter, repair, replace or

rehabilitate dwellings, which will provide modest, decent, safe, and

sanitary housing to eligible individuals living in rural areas. To

assist individuals in obtaining affordable housing, a borrower's house

payment may be subsidized to an interest rate as low as 1% and under

the deferred mortgage program the subsidy can be reduced further. The

amount of subsidy is based on the borrower's household income. The

information requested by RHS is vital to be able to process

applications for RHS assistance and make prudent credit and program

decisions. It includes borrower financial information such as household

income, assets and liabilities and monthly expenses. Without this

information the Agency is unable to determine if a borrower would

qualify for any services or if assistance has been granted that the

borrower may not have been eligible for. In addition, proper

liquidation and debt settlement decisions are made.

Another integral part of Agency lending requires borrowers to

refinance to other credit when they are able to do so. If a borrower is

unable to find other credit available at reasonable rates and terms,

the Agency will continue to review the borrower for possible

refinancing at periodic intervals. If it is determined that all loan

servicing efforts have failed to produce a successful outcome the

account will be liquidated through voluntary liquidation or

foreclosure. The Agency may also accept a deed in lieu of foreclosure

if it is in the best interest of the Government. The Agency may also

settle debts through charge-off, compromise or adjustment.

The RHS has over 725,000 direct Sections 502 and 504 loans with

approximately 625,000 customers in its portfolio. With our Fiscal Year

(FY) 1996 direct sections 502 and 504 loan appropriation, the Agency

anticipates making 35,000 new direct SFH loans this year. The

accounting system established by RHS's predecessor Agency, the Farmers

Home Administration (FmHA) to maintain its vast farm, housing,

community and business loan programs is severely outdated and not

capable of expansion to keep pace with an ever increasingly automated

society. FmHA was not able to provide the same level of customer

service provided by commercial lenders such as the escrow of real

estate taxes and insurance for its customers and toll free telephone

numbers to contact a servicing representative. These features are

critical for RHS to provide prudent supervised credit to its very-low

and low income customers and assist these families in becoming

successful homeowners.

In May 1995, the RHS awarded a contract to Fiserv, Inc. and its

subsidiary, Data-Link systems for the purchase of a commercial-off-the-

shelf Dedicated Loan Origination and Servicing System (DLOS) which

includes escrow capability. This system will replace the Agency's

current Program Loan Accounting System (PLAS) and the Management

Records System (MRS) and will provide agency personnel with the tools

to deliver high quality customer services to its customers. RHS intends

to adopt processes and techniques currently utilized by the private

sector including centralized servicing and automation of many forms and

processes. The system is being customized to provide the additional

features and servicing benefits available to RHS customers to assist

them in becoming successful homeowners. The Agency intends to begin

implementing this system on October 1, 1996 with two pilot states.

Other states will be phased into the DLOS system through FY 1996 with

full implementation anticipated by September 30, 1997.

The centralized servicing unit will be located in St. Louis,

Missouri, and will assume primary responsibility for the functions

associated with servicing and managing the loan portfolio such as

collection of loan payments, day to day loan servicing, escrowing, and

accounting in a focused effort to monitor and reduce loan defaults

thereby achieving our goal of having successful homeowners that can

eventually refinance to commercial credit. The centralized unit will be

staffed with many existing RHS employees.

RHS has been aggressively analyzing all existing burden imposed

upon the public to obtain and retain SFH program assistance. A Task

Force of RHS and Rural Development employees at the local, state and

national level was established and worked with the DLOS team to

eliminate all unnecessary burden. This significant effort included

input from the private sector manufacturers of the DLOS system. The

system which RHS has already purchased includes many industry standard

forms. Wherever possible, RHS intends to utilize these industry

standard forms, eliminate duplicative FmHA forms and make full use of

our new expanded automation capabilities. For example, most forms which

a current RHS borrower must complete can be system generated and

contain all relevant system information such as the borrower's account

number, address, property description, real estate taxes, insurance,

income data, etc., thereby reducing unnecessary burden imposed on our

customers. This will reduce the time it takes the public to complete

required information, reduce the need to stock forms throughout Rural

Development offices, and result in cost savings to the public. RHS has

reduced the burden in many of its existing information collection

dockets.

While many information collection dockets have been decreased,

through thorough analysis and consolidation of existing regulations,

and the narrower scope in which the Paperwork Burden Act of 1995

defines an information collection ``burden,'' many new areas of burden

have surfaced which now appear in this proposed package. RHS has made

every effort to analyze and reduce such burden to the maximum extent

possible.

The information is collected from applicants, borrowers,

application packagers, contractors, real estate brokers, employers,

etc. In brief, all applicants and borrowers and any person with any

type of a pecuniary interest in that of an applicant or recipient of a

direct SFH loan or grant. The information is collected by RHS and Rural

Development staff. RHS provides forms and guidelines to assist in the

collection and submission of this information.

The information collected is used by the Agency to verify program

eligibility requirements; continued eligibility requirements for

borrower assistance; servicing of loans; eligibility for special

servicing assistance such as: payment subsidies, moratorium (stop) on

payments, delinquency workout agreements; liquidation of loans, and

debt settlement. The information is also used to ensure that the direct

SFH programs are administered in a manner consistent with legislative

and administrative requirements. The information is typically submitted

via hand delivery or the U.S. Postal Service

[[Page 37442]]

to the RHS or Rural Development office. Occasionally, information is

submitted directly to RHS or Rural Development offices.

Public burden for the direct SFH programs is currently approved in

several information collection dockets. These existing information

collection dockets will be handled as follows:

7 CFR Part 1910, Subpart A--Receiving and Processing

Applications. The direct SFH programs have no burden included in the

existing approved information collection docket (0575-0134).

7 CFR Part 1944, Subpart A--Section 502 Rural Housing Loan

Policies, Procedures, and Authorizations. The existing approved

information collection docket (0575-0059) will be deleted at the final

rule stage for Part 3550. The burden under this existing regulation is

included in this proposed information collection docket.

7 CFR Part 1944, Subpart J--Section 504 Rural Housing

Loans and Grants. The existing approved information collection docket

(0575-0062) will be deleted at the final rule stage for 7 CFR Part

3550. The burden under this existing regulation is included in this

proposed information collection docket.

7 CFR Part 1951, Subpart C--Offsets of Federal Payments to

FmHA Borrowers. RHS will make a technical correction to the existing

approved information collection docket (0575-0119) at the final rule

stage of Part 3550 to remove the public burden for the direct Section

502 and 504 loan and grant programs. The burden for the direct SFH

programs in this existing regulation is included in this proposed

information collection docket.

7 CFR Part 1951, Subpart F--Analyzing Credit Needs and

Graduation of Borrowers. RHS will make a technical correction to the

existing approved information collection docket (0575-0093) at the

final rule stage of Part 3550 to remove the public burden for the

direct Section 502 and 504 loan and grant programs. The burden under

this existing regulation for the direct SFH programs is included in

this proposed information collection docket.

7 CFR Part 1951, Subpart G--Borrower Supervision,

Servicing and Collection of Single Family Housing Loan Accounts. The

existing approved information collection docket (0575-0060) will be

deleted at the final rule stage for 7 CFR Part 3550. The burden under

this existing regulation is included in this proposed information

collection docket.

7 CFR Part 1951, Subpart M--Servicing Cases Where

Unauthorized Loan or Other Financial Assistance Was Received--Single

Family Housing. The existing approved information collection docket

(0575-0105) will be deleted at the Final Rule stage for 7 CFR Part

3550. The burden under this existing regulation is included in this

proposed information collection docket.

7 CFR Part 1955, Subpart A--Liquidation of Loans Secured

by Real Estate and Acquisition of Real and Chattel Property. RHS will

make a technical correction to the existing approved information

collection docket (0575-0109) at the final rule stage to delete the

public burden for the direct Section 502 and 504 loan and grant

programs. The burden under this existing regulation for the direct SFH

programs is included in this proposed information collection docket.

7 CFR Part 1955, Subpart B--Management of Property. RHS

will make a technical correction to the existing approved information

collection docket (0575-0110) at the final rule stage to delete the

public burden for the direct Section 502 and 504 loan and grant

programs. The burden under this existing regulation is included in this

proposed information collection docket.

7 CFR Part 1956, Subpart B--Debt Settlement--Farmer

Programs and Housing. RHS will make a technical correction to the

existing approved information collection docket (0575-0118) at the

final rule stage to delete the public burden for the direct Section 502

and 504 loan and grant programs and transfer this regulation and

information collection docket to the Farm Service Agency (FSA). The

burden under this existing regulation for the direct SFH programs is

included in this proposed information collection docket.

Estimate of Burden: Public reporting burden for this collection of

information is estimated to range from 5 minutes to 1.5 hours per

response.

Respondents: Applicants seeking financial assistance through RHS to

purchase adequate housing in rural America, borrowers who have received

such assistance and any person with a pecuniary interest in an

applicant or borrower.

Estimated Number of Respondents: 750,000.

Estimated Number of Responses per Respondent: 3.3.

Estimated Total Annual Burden on Respondents: 839,763.

A complete copy of the Information Collection Package and DRAFT

Handbooks is available from Barbara Williams, Information Collection

Coordinator, RHS at the aforementioned address.

Comments

Comments are invited on: (a) whether the proposed collection of

information is necessary for the proper performance of the functions of

the Agency, including whether the information will have practical

utility; (b) the accuracy of the Agency's estimate of the burden of the

proposed collection of information including the validity of the

methodology and assumptions used; (c) ways to enhance the quality,

utility and clarity of the information to be collected; and (d) ways to

minimize the burden of the collection of information on those who are

to respond, including through the use of appropriate automated,

electronic, mechanical, or other technological collection techniques or

other forms of information technology.

Comments must be received on or before September 16, 1996, to be

assured of consideration. Comments received after such date will not be

considered, therefore; the commentor must allow for sufficient mailing

and delivery time. RHS encourages the submission of comments within 30

days. All responses to this notice will be summarized, included in the

request for OMB approval, and will become a matter of public record.

Comments should be submitted to Barbara Williams, Information

Collection Coordinator, RHS, Regulations and Paperwork Management

Division, U.S. Department of Agriculture, Ag. Stop 0743, Washington, DC

20250-0743. A comment to RHS is best assured of having its full effect

if RHS receives it within 30 days of publication of this notice.

Dated: July 12, 1996.

Maureen Kennedy,

Administrator, Rural Housing Service.

[FR Doc. 96-18192 Filed 7-17-96; 8:45 am]

BILLING CODE 3410-07-P