83i 2502-0005 Revised 10-21-09

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 A/S for Housing-Federal Housing Commissioner		2. OMB Control Number: a. 2502-0005	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 November 9, 2009 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 from approval date b. Other (specify)      

7. Title: FHA Lender Approval, Annual Renewal, Periodic Updates and Required Reports from FHA Approved Lenders

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

HUD-92001-A, HUD-92001-B, HUD-92001-C, HUD-92001-D, HUD-92001-E, HUD-92001-F and HUD-92001-LC

9. Keywords:

Housing, FHA Lender or Mortgagee Approvals; Branch Application; Change of Address; Application Fee; Voluntary Termination; Noncompliance Reports, Annual Financial Statements, Credit Watch Termination Reinstatement

10. Abstract:

This information is required for: (1) FHA lender approval, (2) Annual renewal of each FHA lender’s approval, (3) Updates to a FHA lender’s approval and (4) Various reports from FHA lenders.

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. X Not-for-profit institutions g. X 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 16,400 b. Total annual responses 66,520 Percentage of these responses collected electronically 84% c. Total annual hours requested 45,015 d. Current OMB inventory 43,547 e. Difference (+,-) +1,468 f. Explanation of difference: 1. Program change: +1,468 2. Adjustment:		14. Annual reporting and recordkeeping cost burden: (in thousands of dollars) Do not include costs based on the hours in item 13. a. Total annualized capital/startup costs $0.00 b. Total annual costs (O&M) $0.00 c. Total annualized cost requested $0.00 d. Total annual cost requested $0.00 e. Current OMB inventory $0.00 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.   Audit		16. Frequency of recordkeeping or reporting: (check all that apply) a. Recordkeeping b. Third party disclosure c. Reporting: 1. On occasion 2. Weekly 3. Monthly 4. Quarterly 5. Semi-annually 6. Annually 7. Biennially 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: Maurice Gulledge Phone: 202-402-8242

19. Certification for Paperwork Reduction Act Submissions

On behalf of the U.S. Department of Housing and Urban Development, 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) appears 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);

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

2. 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: Michael Winiarski, Deputy Director, Organizational Policy, Planning and Analysis Division, HROA

Date:

Supporting Statement for Paperwork Reduction Act Submissions

FHA Lender Approval, Annual Renewal, Periodic Updates and Required Reports

By FHA Approved Lenders

OMB Control Number 2502-0005

(Forms HUD-92001-A, HUD-92001-B, HUD-92001-C, HUD-92001-D, HUD-92001-E, HUD-92001-F and HUD-92001-LC)

A. Justification

1. This information collection clearance package seeks to an emergency revision of OMB clearance approval of 2502-0005 that expires 5/31/2012. The Federal Housing Administration (FHA) of the Department of Housing and Urban Development approves entities to participate as Title I and/or Title II lenders. Specific information must be obtained and reviewed to determine if an entity meets the criteria to obtain the requested approval. In addition, this submission covers subsequent information required by FHA in order for entities to renew and maintain their approval, make periodic updates to their approval, submit required reports to FHA and submit requests to voluntarily terminate their FHA approval. There are no regulatory changes associated with this request. However, this request does include changes associated with recent statutory changes as detailed in the third paragraph of this Justification.

Title II of the National Housing Act, as amended, 12 U.S.C. 1703, 1709, and 1715b and 42 U.S.C. 3535(d), authorizes the Secretary of the Department of Housing and Urban Development to prescribe terms and conditions with respect to mortgage insurance under the above act. Criteria for approval to become a Title I and/or Title II lender mortgagee are specified in 24 CFR 202. Once approved, FHA lenders must provide additional information to maintain their approval as specified in 24 CFR 202 and supplemental guidance in Title I Lender Approval Handbook 4700.02 and the Title II Mortgagee Approval Handbook 1060.1. In addition, Title I letters and Mortgagee Letters have been issued to clarify various issues including the information required to be submitted on business changes and electronic submission of some information.

Approval of an emergency revision is being requested to implement statutory changes related to FHA approved lenders contained in Section 203 of the “Helping Families Save Their Homes Act of 2009” (Public Law 111-22) (the HFSH Act). The HFSH Act establishes: (1) additional ineligibility criteria for FHA-approved lenders and mortgagees including any officer, partner, director, principal, manager, supervisor, loan processor, loan underwriter, or loan originator of the applicant seeking FHA lender approval or any currently approved FHA lender; (2) new reporting requirements if individual employees of the lender are subject to any sanction or any other administrative action, including if there is a revocation of a State-issued mortgage loan originator license issued pursuant to the S.A.F.E. Act; and (3) a new requirement that FHA lenders must use their business name as registered with FHA in all of their marketing materials.

2. a. Application for FHA Lender Approval: Form HUD-92001-A. This form and its attachments (see instructions on form) are used for applicants seeking approval as a FHA lender. The previous version of this form was used by all applicants applying for any type of FHA lender approval and by existing FHA lender who wanted to convert their approval type. FHA has determined that is less confusing to applicants to create three different application forms. The revised HUD 92001-A will be used to apply for approval as a FHA approved lender (supervised lender, nonsupervised lender, government lender and investing lender). The newly created HUD-92201-LC will be used to apply for approval as a loan correspondent (nonsupervised loan correspondent and supervised loan correspondent). The newly created HUD 92001-C will be used to apply for conversion of an existing FHA lender’s approval type.

The specific changes to this form are:

(1) Additional certifications to verify compliance with the HFSH Act’s expanded the list of ineligible participants (both applicants themselves as well as their owners, director, officers and certain staff) as summarized in the last paragraph of Item 1 above.

(2) Require applicants for supervised lender approval to include a copy of their most recent audited financial statements. These applicants are currently required by 24 CFR 202 to have a minimum net worth of $250,000, but were not required to submit documentation of their compliance with their application for approval. Due to the critical need to review the financial soundness of these applicants, FHA has determined it needs to review each applicants audited financial statements prior to approval. Supervised applicants are banks, savings and loans and credit unions and already have to provide with supervisory agency with their audited financial statements so the additional burden of providing FHA with a copy is minimal.

(3) Included several additional questions that applicants must answer with regard to being a woman or minority owned entity and if the applicant is affiliated with a home builder company. The question about being a woman or minority owned entity was deleted from the previous version of this form in error and needs to be restored. The information of being affiliated with a home builder is needed to assist FHA in its monitoring of such lenders to ensure compliance with all loan program and RESPA disclosure requirements when affiliated entities are involved in the purchase of new homes.

(4) Redesigned the form and its instructions to reduce the time it takes to fill it out.

b. Online Application for Lender Approval: Development is underway to replace the paper HUD-92001-A and its attachments with an electronic submission. Draft Screen shots of this system are attached to the submission.

c. Application for FHA Loan Correspondent Approval: Form HUD 92001-LC: This form and its attachments (see instructions on form) are used for applicants seeking approval as a FHA loan correspondent. This form also includes the additional certifications added to the 92001-A discussed above and was created to reduce the confusion of using one application form for all types of approvals. In addition, FHA is proposing to revise its regulations to eliminate the approval of loan correspondents and when that change is made, this form will no longer be required.

d. Application for Conversion of Existing FHA Lender Approval Type: For HUD 92001-C: This form is used by existing FHA approved lenders and loan correspondents who wish to change their existing approval type. Previous use of the 92001-A for this purpose required lenders to provide information that was already on file with FHA. This newly created form eliminates duplicate collection. In addition, FHA is proposing to revise its regulations to eliminate the approval of loan correspondents and when that change is made, this form will no longer be required because conversion requests are between lender and loan correspondent approval types.

e. Non-online Branch Registration: Form HUD-92001-B has two uses. Paper submissions are made by FHA lenders to add a Branch to its operation when the lender can’t add the branch electronically via of their FHA Connection Account. This includes nonsupervised loan correspondents who don’t have on file with FHA documentation they have the required net worth to add a branch. The second use of the paper version is when any FHA lender seeks approval for a direct lending branch.

f. Online Branch Registration: The information on Form HUD 92001-B is submitted electronically via FHA Connections by FHA lenders to register branches except those described in 2e above.

g. Non-online reporting of Title I Loan Noncompliances: Form HUD 92001-D (formally numbered as HUD 92001-C) Reporting Noncompliances for FHA Insured Title I Loans. This form is used by Title I lenders to report noncompliance information identified by the lenders themselves pursuant to Quality Control Plan reviews. Title I Lenders are required by Title 1 Letter 447, Reporting Noncompliances for FHA Insured Title I Loans, to promptly report to HUD the discovery of any material misstatements of fact, borrower misuse of loan proceeds, dealer noncompliance or other significant violations in the Title I Program.

h. Online Reporting of Title II Loan Noncompliances: Electronic submission via of the FHA Connection account of each Title II lender to report noncompliance information identified by the lenders themselves pursuant to Quality Control Plan reviews. This is commonly referred to as “self reporting.” In order to reduce duplication of information already on file with FHA, the automated system automatically populates loan information on file with FHA for each loan number the lender enters into the system. The lender only needs to comment on this automatic data if is in error. The lender then fills in the remaining boxes with specific information about the non-compliance identified in their Quality Control Review.

i. Non-online Application Fee Payment: Paper submission of Form HUD-92001-E and form HUD-92001-F for Title I and Title II lender approval or conversion fee payments. The information on the forms is needed to ensure that payments are credited to the correct account. There is a slight difference between the two forms to reflect the P.O. Box number of each lock box.

j. Online Application Fee Payment: Electronic payment of Application Fee for Title I or Title II Lender Approval or Conversion using pay.gov is currently under development.

k. Non-online Branch Fee Payment: Paper submission of Form HUD-92001-E and form HUD-92001-F for Title I and Title II lender branch registration fee payments when the lender cannot register the branch online in the FHA Connections. The information on the forms is needed to ensure that payments are credited to the correct account. There is a slight difference between the two forms to reflect the P.O. Box number of each lock box.

l. Online Branch Fee Payment: Electronic payment of Branch registration fee via the FHA Connection is used when a lender adds a branch themselves.

m. Online Annual Certification Reports: Electronic submission of annual Certification Report via of each lender’s FHA Connection account was implemented September 1, 2009, and replaced the previous paper versions (HUD-92001-G, Title I Lender Annual Verification Report, and HUD-92001-H, Title II Mortgagee Annual Verification Report) of these reports. This was the last part of the annual renewal requirements to converted to an online submission

n. Online Annual Audited Financial Statements: Electronic Submission of Annual Financial Statements using the Lender Assessment SubSystem via FHA Connection by: (1) nonsupervised Title I and Title lenders; (2) nonsupervised Title I and Title II non supervised loan correspondents; and (3) Title I and Title II supervised lenders. The audits are prepared by CPA in compliance with HUD IG Consolidated Audit Guide for Audits of HUD Programs (HB 2000.04) and the GAO Auditing Standards (The Yellow Book). The requirement for electronic submission of the audit is pursuant to 24 CFR 5.801. This reporting requirement has been expanded to also include Title I and Title II supervised lenders because they are now required to provide a copy of their most recent audit as discussed in item 2.a(2) above.

o. Online Payment of Annual Renewal Fee: Electronic payment of annual renewal fee of each lender’s FHA approval using via of their FHA Connection account.

p. Online Termination of a Branch: The information collected electronically to allow all Title I and Title II lenders, mortgagees, and loan correspondents to terminate a branch is needed to ensure the Department knows the effective date of the termination and who took the action. The information collected is the branch’s FHA ID number and termination date. Since each employee of a lender or mortgage must have an individual user ID for the FHA Connection, the Department knows who made the termination action.

q. Online Business Changes of a Lender: Title I lenders and Title II mortgagees can make some business changes online via of their FHA Connection account. These include changes and updates to the address, phone number, Fax number, email address and dba (doing business as) name of their home office or any registered branches. If an update is not accepted in the online system, the lender must submit the request to FHA for manual review and updating...

r. Non-online Business Changes of a Lender: Lenders are required to report certain business changes to FHA. These change include: (1) any changes to its owners and officers; (2) any restructuring, mergers or acquisitions; (3) change in name; (4) change in fiscal year end date; (5) loss of fidelity bond and/or errors and omissions insurance; (6) termination or change in supervisory agency; (7) net worth deficiency, liquid assets deficiency and operating loss; (8) bankruptcy or liquidation; (9) requests to voluntarily withdraw its FHA approval; and (10) any allowable online business change that was rejected; and (11) other business changes effecting its ability to be a FHA approved lender. These changes are reported by letter and the actual documents that must be submitted will vary. Details instructions on what must be submitted with each request and deadlines for submissions are in the Title I Lender Approval Handbook 4700.2, the Title II Mortgagee Approval Handbook 4060.1 and subsequent Mortgagee Letters and Title I letters. For example, if the company has been re-structured, amendments to the articles of incorporation or organization must be provided. In the case of mergers and acquisitions, copies of the documents reflecting the change are required.

In addition, lenders are require to report (1) if individual employees of the lender are subject to any sanction or any other administrative action, including if there is a revocation of a State-issued mortgage loan originator license issued pursuant to the S.A.F.E. Act and (2) if the lender or any officer, partner, director, principal, manager, supervisor, loan processor, loan underwriter, or loan originator is no longer eligible to participate pursuant to the expanded list of ineligible participants in Section 203 of the “Helping Families Save Their Homes Act of 2009” (Public Law 111-22)

s. Non-online Credit Watch Termination Reinstatement Requests: A Title II lender who lost part of the geographic area of its approval to originate Title II loans via HUD’s Credit Watch Termination Initiative may request reinstatement of the lost area. Details instructions on what must be submitted are in Mortgagee Letter 00-17.

3. 56,600 (85%) of the annual 66,250 responses is currently done online. Development is currently underway to make an additional 5,300 annual responses be online (the application for approval and payment of the application fees online) which will increase electronic submissions to 93%.

4. The information is not available from other sources.

5. The burden associated with the approval process is the minimum required to achieve program objectives. Consideration for small business is not a factor. The same applies to the additional information required after approval to participate as a FHA lender or loan correspondent

6. The information collected is required to achieve program objectives. It is used to determine whether an applicant is qualified for participation in the program for which it is applying. The application approval process is the first line of risk evaluation and prevention by the Department for its insured lending programs. Without collecting this information for the Department to review prior to making a decision regarding approval, the programs would be subject to widespread abuse. The information collected after approval is critical to monitor each lender and mortgagee’s activities.

7. The information collection frequency is the minimum consistent with program objectives. The frequency cannot be changed because it applies when a lender requests initial approval, additional branches, and changes in personnel, addresses, business structure, and annual renewal of their approval.

8. In accordance with 5 CFR 1320.8(d), the agency’s notice soliciting public comments was announced in the Federal Register on October 1, 2009. No comments were received.

9. There have been no payments or gifts to respondents.

10. Names and Social Security Numbers are requested in order for the Department to obtain positive identification of the applicant’s officers, directors, stockholders and employees who have authority to obligate the applicant. The information is used to determine the eligibility of the individuals to participate in the Department’s mortgage insurance programs. The Department is authorized to request this information by Executive Order 9397 and it will not be disclosed outside the Department without prior consent except as required or permitted by law.

11. There are no questions of a sensitive nature.

12. The following table shows the estimated burden for each collection effort. Most of the information requested will already have been collected in order to comply with State requirements to be licensed to operate as loan correspondents (commonly known as mortgage brokers), non-supervised mortgagees and lenders (commonly known as mortgage bankers), and supervised depository institutions. The estimated burden is to fill out specific forms or to duplicate documents that need to be attached.

Information Collection Burden
Item No.	Information Collection	No. of Respond-ents	Total Annual Res- ponses	Hours Per Res- ponse	Total Annual Hours	Cost per Hour	Total Annual Cost
A	Non-online submission of HUD-92001-A Application for FHA Lender Approval	400	400	2.00	800	$47	$37,600
B	Online submission of HUD-92001-A Application for FHA Lender Approval (Currently under development)			.50		$47
C	Non-online submission of HUD-92001-LC Application for FHA Loan Correspondent Approval	1,800	1,800	2.00	3,600	$47	$169,200
D	Non-online submission of HUD-92001-C Application for Conversion of Existing FHA Lender Approval Type	200	200	2.00	400	$47	$18,800
E	Non-online Submission of HUD-92100-B Application for Registration of New Branch (including attachments)		500	.50	250	$47	$11,750
F	Online Registration of New Branches via FHA Connection		2,000	.10	200	$47	$9,400
G	Non-online Submission of HUD-92001-D Reporting of Title I Loan Non-Compliance		100	1.00	100	$47	$4,700
H	Online Submission of Reporting of Title II Loan Non-Compliance		4,800	.15	720	$47	$38,840
I	Non-online submission of HUD-92001-E and 92001-F Cover Sheets for Title I and Title II Lender Approval Applications or Conversion Fee Payment		2,400	.05	120	$47	$5,640
J	Online Application Fee Payment for Title I or Title II Lender Approval or Conversion (currently under development)			,05
K	Non-online submission of HUD 92001-E and 92001-F Cover Sheets for Title I and Title II Branch Fee Payment		500	.05	25	$47	$1,175
L	Online Branch Registration Fee for Title I or Title II Branches		2,000	.05	100	$47	$4,700
M	Online Annual Certification Report for all Title I and Title II approved lenders and loan correspondents	14,000	14,000	.10	1,400	$47	$65,800
N	Online Submission of Annual Audited Financial Statements using the Lender Assessment SubSystem via FHA Connection by Title I and Title II Nonsupervised Lenders, Supervised Lenders and Nonsupervised Loan Correspondents		11,000	3.00	33,000	$47	$1,510,000
O	Online payment of annual renewal fee by all FHA Lenders except Government Lenders		13,800	.05	690	$47	$32,430
P	Online Termination of Existing Branch by all lenders		4,000	.05	200	$47	$9,400
Q.	Online Business Changes of a Lender		5,000	.25	1250	$47	$58,750
R	Non- Online Business Changes of a Lender		4,000	.50	2,000	$47	$94,000
S	Non-online Credit Watch Termination Reinstatement Requests		20	8.00	160	$47	$7,520
Totals			66,520		45,015	$47	$2,115,705

The estimated cost for the burden hours is computed at $47 per hour. Most of the information submissions are prepared by staff and are subsequently reviewed by management prior to submission.

13. There are no additional costs to the respondents.

14. Estimate of total cost to the Federal government is estimated to be $705,000 computed at $47 per hour (GS13) for approximately 15,000 hours of review and processing.

15. This is an emergency revision of a currently approved collection. The adjustments reported in item 13 are based on the explanations it item 1 and 2 above.

16. Only summary information will be forwarded to other Departmental offices for statistical purposes and possible 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

This information collection does not employ statistical methods.