Icr 2502-0349

Paperwork Reduction Act Submission

Please read the instruction before completing this form. For additional forms or assistance in completing this forms, contact your agency’s Paperwork Reduction Officer. Send two copies of this form, the collection instrument to be reviewed, the Supporting Statement, and any additional documentation to: Office of Information and Regulatory Affairs, Office of Management and Budget, Docket Library, Room 10102, 725 Seventeenth St. NW, Washington, DC 20503.

1. Agency/Subagency Originating Request: U.S. Department of Housing and Urban Development Housing, Office of Single Family Housing, Single Family Servicing Division		2. OMB Control Number: a. 2502-0349	b. None      
3. Type of information collection: (check one) New Collection Revision of a currently approved collection Extension of a currently approved collection Reinstatement, without change, of previously approved collection for which approval has expired Reinstatement, with change, of previously approved collection for which approval has expired Existing collection in use without an OMB control number For b-f, note item A2 of Supporting Statement instructions.	4. Type of review requested: (check one) Regular Emergency - Approval requested by       Delegated 5. Small entities: Will this information collection have a significant economic impact on a substantial number of small entities? Yes No 6. Requested expiration date: a. Three years form approval date b. Other (specify)      

7. Title:

Certified Eligibility for Adjustments for Damage or Neglect

8. Agency form number(s): (if applicable)

None

9. Keywords:

Housing, Mortgage Insurance

10. Abstract:

One-time certification by mortgages to show that they have acquired hazard insurance acceptable to HUD at a reasonable rate and that the mortgagee may convey fire damaged properties without a surcharge to the claim.

11. Affected public: (mark primary with “P” and all others that apply with “X”) a.   Individuals or households e.   Farms b. P Business or other for-profit f.   Federal Government c.   Not-for-profit institutions g.   State, Local or Tribal Government		12. Obligation to respond: (mark primary with “P” and all others that apply with “X”) a.   Voluntary b. P Required to obtain or retain benefits c.   Mandatory
13. Annual reporting and recordkeeping hour burden: a. Number of respondents 275 b. Total annual responses 50 Percentage of these responses collected electronically 0% c. Total annual hours requested 25 d. Current OMB inventory 125 e. Difference (+,-) -100 f. Explanation of difference: 1. Program change:       2. Adjustment: -100		14. Annual reporting and recordkeeping cost burden: (in thousands of dollars) a. Total annualized capital/startup costs       b. Total annual costs (O&M)       c. Total annualized cost requested       d. Total annual cost requested       e. Current OMB inventory       f. Explanation of difference: 1. Program change:       2. Adjustment:      
15. Purpose of Information collection: (mark primary with “P” and all others that apply with “X”) a. P Application for benefits e.   Program planning or management b.   Program evaluation f.   Research c.   General purpose statistics g. X Regulatory or compliance d. X Audit		16. Frequency of recordkeeping or reporting: (check all that apply) a. Recordkeeping b. Third party disclosure b. Reporting: 1. On occasion 2. Weekly 3. Monthly 4. Quarterly 5. Semi-annually 6. Annually 7. Biannually 8. Other (describe)      
17. Statistical methods: Does this information collection employ statistical methods? Yes No	18. Agency contact: (person who can best answer questions regarding the content of this submission) Name: Robert Juenger Phone: (202) 708-1672, extension 4966

19. Certification for Paperwork Reduction Act Submissions

On behalf of this Federal Agency, I certify that the collection of information encompassed by this request complies with 5 CFR 1320.9.

Note: The text of 5 CFR 1320.9, and the related provisions of 5 CFR 1320/8(b)(3). Appear at the end of the instructions. The certification is to be made with reference to those regulatory provisions as set forth in the instructions.

The following is a summary of the topics, regarding the proposed collections of information, that the certification covers:

1. It is necessary for the proper performance of agency functions;

2. It avoids unnecessary duplication;

3. It reduces burden on small entities;

4. It uses plain, coherent, and unambiguous terminology that is understandable to respondents;

5. Its implementation will be consistent and compatible with current reporting and recordkeeping practices;

6. It indicates the retention periods for recordkeeping requirements;

7. It informs respondents of the information called for under 5 CFR 1320.8(b)(3):

1. Why the information is being collected;

2. Use of the information;

3. Burden estimate;

4. Nature of response (voluntary, required for a benefit, or mandatory);

5. Nature and extent of confidentiality; and

6. Need to display currently valid OMB control number;

8. It was developed by an office that has planned and allocated resources for the efficient and effective management and use of the information to collected (see note in item 19 of the instructions);

9. It uses effective and efficient statistical survey methodology; and

10. It makes appropriate use of information technology.

If you are unable to certify compliance with any of these provisions, identify the item below and explain the reason in item 18 of the Supporting Statement.

     

Signature of Program Official: X Kevin B. Perkins, Director, Organizational Policy, Planning and Analysis Division, HROA	Date:
Signature of Senior Officer or Designee: X Lillian Deitzer, Departmental Reports Management Officer Office of Investment Strategies, Policy, and Management, Office of the Chief Information Officer	Date:

Supporting Statement for Paperwork Reduction Act Submissions

Certified Eligibility for Adjustments for Damage or Neglect

OMB Control Number 2502-0349

A. Justification

1. Section 8 paragraph (f) of the National Housing Act (P.L. 479, 48 Stat., 12 U.S.C. 1701 (et seq.)), authorizes the payment of benefits to mortgagees insured under the National Housing Act. Section 204(a) (1) of the same act limits such payment to properties which “meet the requirements of rules and regulations of the Secretary of the Department of Housing and Urban Development in force at the time the mortgage was insured . . .” These rules and regulations are codified at 24 CFR 203 and more specifically at 24 CFR 203.377 through 203.379 (copies attached for reference).

The various programs authorized by the National Housing Act have always based the condition of insurance and insurance benefits on factors of eligibility and on terms as prescribed by the Secretary of HUD. The regulations at 24 CFR 203.379 set forth the conditions for adjustment to insurance benefits in cases of damages or neglect. Subparagraph (c) of 203.379 regulations contains the information collection for which this collection is being submitted. This request is for approval of the lender’s certification of continued hazard protection.

2. This request involves an approximate 275 respondents who service FHA-insured loans. These servicers, for audit purposes, must have documentation in their files to support their certification that they are entitled to file a claim and to convey a fire-damaged property without penalty where fire insurance was not available. The burden estimates, therefore, are submitted for an explanation of the activity involved in those cases where hazard insurance cannot be obtained. The only entity that would ever be responsible for this certification would be a mortgagee that had a property that suffered fire damage prior to conveyance to HUD. If the situation surrounding the inability of the mortgagee to have the property fully insured met all the criteria in 24 CFR 203.379(a)(2), then the mortgagee’s reduction for the damage would be limited to the amount of insurance. The mortgagee would certify pursuant to 24 CFR 203.379(a)(2). This happens very rarely. As OMB wants to ensure that all probable collections are identified, the Department estimates that at the most, 50 cases may require such a certification per year.

Mortgagees would maintain such records in their offices for a period of 3 years after submission of a claim for benefits (See HUD Handbook 4330.1, Rev-5). The documents need never be produced except for random audit purpose when a mortgagee might be requested to show that he/she did not falsely certify in order to obtain FHA insurance benefits.

3. The information is recorded by the lender but not submitted to HUD, and the information will not reside in an automated system. This certification is only required for those few cases that meet this criteria. As very few cases require such a certification, this process will not automated. This certification is not submitted with the claim, but is maintained by the mortgagee in the individual claim review file with all other documentation that supports the claim. The information collection reduces the reporting and recordkeeping to an absolute minimum while maintaining some means of detecting mortgagee fraud or misrepresentation.

4. There is no duplication of information. The certification is only required at the time a claim for insurance benefits is filed.

5. There are no small businesses involved.

6. Without this certification there is no source of this information available to the Department. Mortgagees who do not file this certification with their claim will experience financial losses when they receive claim reimbursements reduced by the amount necessary to repair the property.

7. There are no special circumstances associated with this information collection. This information cannot be collected less frequently than one certification at a time of claim.

8. In accordance with 5 CFR 1320.8(d), the agency’s notice soliciting public comments was announced in the Federal Register July 25, 2006 (Volume 71, Number 142), page 42110. No comments were received.

The Department consults with the industry on a continuing basis on matters regarding adjustments for damage claims. The comments received have been favorable.

9. There are no gifts or payments of any kind given to respondents.

10. There is no promise of confidentiality given and none is asked for by program participants.

11. No questions of a sensitive nature apply.

12. Estimated burden hours and costs to respondents. All 275 FHA loan servicers are covered by this requirement. HUD estimates 50 responses from these respondents, based on the National Servicing Center’s (NSC) experience with this type of activity. These adjustment requests are rare exceptions and are forwarded directly to the NSC for approval. Since the number is low, NSC tracks the individual requests.

Information Collection	Number of Respondents	Frequency of Response	Responses Per Annum	Burden Hour Per Response	Annual Burden Hours	Hourly Cost Per Response	Annual Cost
Certification	275	varies	50	.50	25	$15.00	$375.00

The hourly cost is based on an estimated $30,000 as the annual salary for servicer clerical personnel.

13. There are no additional costs to respondents.

14. Estimated burden and costs to the Federal government:

Information Collection	Responses Per Annum	Burden Hour Per Response	Annual Burden Hours	Hourly Cost Per Response	Annual Cost
Certification	50	.50	25	$33.00	$825.00

The hourly cost is based on the average annual salary of a grade 12 for review of the documents.

15. This is an extension of a previously approved collection. The National Servicing Center reported during the period of July 2005 to June 2006 that of the 53,879 claims filed, 18 actual claims involved damaged property conveyances. The estimated number of cases decreased from 250 to 18 from the last time this PRA was approved. We are estimating 50 cases per year to adjust for the recent natural disasters of 2005. This will be a decrease of 100 burden hours. The number of respondents increased from 250 to 275 to include all loan servicers to whom this collection of information applies and not just those who actually certify.

16. The results of this information collection are not for publication.

17. HUD is not seeking approval to avoid displaying the OMB expiration date.

18. There are no exceptions to the “Certification Statement” identified in Item 19 of the OMB 83-I.

B. Collections of Information Employing Statistical Methods

There are no statistical methods employed in the collection of this information.

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OMB 83-I 10/95