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August 27, 2007

Part IV

Department of
Housing and Urban
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
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49124 Federal Register / Vol. 72, No. 165 / Monday, August 27, 2007 / Rules and Regulations

DEPARTMENT OF HOUSING AND The regulations governing Ginnie Mae disposition, leasing, rehabilitation,
URBAN DEVELOPMENT are located at 24 CFR part 300. alteration, demolition, or new
Ginnie Mae-guaranteed securities are construction, or establish, revise, or
24 CFR Parts 320 and 350 issued in book-entry form. Under provide for standards for construction or
current Ginnie Mae regulations, a construction materials, manufactured
[Docket No. FR–5063–F–02]
securityholder may request that the housing, or occupancy. Accordingly,
RIN 2503–AA19 book-entry security be converted into under 24 CFR 50.19(c)(1), this rule is
certificated form after initial issuance. categorically excluded from
Government National Mortgage Certificates are physical documentation environmental review under the
Association: Mortgage-Backed of the ownership of the security. On National Environmental Policy Act of
Securities (MBS) Program—Payments May 7, 2007 (72 FR 25925), Ginnie Mae 1969 (42 U.S.C. 4321).
to Securityholders; Book-Entry published a rule that proposed to revise Regulatory Flexibility Act
Procedures; and Financial Reporting its regulations to state that for all
securities issued after particular issue The Regulatory Flexibility Act (5
AGENCY: Government National Mortgage dates, physical certificates may only be U.S.C. 601 et seq.) generally requires an
Association, HUD. issued as approved by Ginnie Mae. agency to conduct a regulatory
ACTION: Final rule. Also, in the proposed rule, Ginnie Mae flexibility analysis of any rule subject to
proposed to clarify that book-entry notice and comment rulemaking
SUMMARY: On May 7, 2007, the requirements, unless the agency certifies
securities may be withdrawn after
Government National Mortgage that the rule will not have a significant
Ginnie Mae has approved a request for
Association (Ginnie Mae) published a economic impact on a substantial
definitive Ginnie Mae securities.
proposed rule that would restrict the number of small entities. This rule
Additionally, in order to conform to
issuance of physical certificates introduces a streamlining amendment to
industry practice, Ginnie Mae proposed
representing Ginnie Mae mortgage- the financial reporting regulations and a
to revise the financial reporting rule for
backed securities (MBS) and clarify that change in the maintenance of Ginnie
issuers participating in its MBS
book-entry securities may be withdrawn Mae book-entry and certificated
programs, by removing the requirement
from the Federal Reserve book-entry securities. Small entities will not be
that issuers submit classified balance
system after Ginnie Mae has approved a adversely affected by the more
request for physical certificates, also streamlined financial reporting
known as definitive securities, in the II. This Final Rule requirement or the book-entry
same amount. The rule also proposed to At this final rule stage, Ginnie Mae is requirement; in fact, a more streamlined
eliminate the requirement for a adopting the proposed rule without financial reporting requirement may
classified balance sheet. Ginnie Mae did change. The public comment period for alleviate some burden. Furthermore, all
not receive any public comments on this the May 7, 2007, proposed rule closed such issuers, regardless of size, are
rule. Ginnie Mae is adopting, at this on July 6, 2007, and Ginnie Mae did not subject to the new requirements
final rule stage, the proposed rule receive any comments on the proposed proposed by the rule. Therefore, the
without change. rule. The revised regulations, which are undersigned certifies that this rule will
DATES: Effective Date: September 26, promulgated by this final rule, restrict not have a significant economic impact
2007. the issuance of physical certificates on a substantial number of small
representing Ginnie Mae MBS and entities.
Thomas R. Weakland, Senior Vice clarify that book-entry securities may be Executive Order 13132, Federalism
President, Office of Program Operations, withdrawn from the Federal Reserve
Executive Order 13132 (entitled
Government National Mortgage book-entry system after Ginnie Mae has
‘‘Federalism’’) prohibits an agency from
Association, Department of Housing and approved a request for physical
publishing any rule that has federalism
Urban Development, 451 Seventh Street, certificates, also known as definitive
implications if the rule either imposes
SW., Room B–133, Washington, DC securities, in the same amount. This
substantial direct compliance costs on
20410; telephone number (202) 475– rule also eliminates the requirement for
State and local governments and is not
4915 (this is not a toll-free number). a classified balance sheet.
required by statute, or the rule preempts
Persons with hearing or speech III. Findings and Certifications State law, unless the agency meets the
impairments may access this number consultation and funding requirements
through TTY by calling the toll-free Unfunded Mandates Reform Act
of section 6 of the order. This rule will
Federal Information Relay Service at Title II of the Unfunded Mandates not have federalism implications and
(800) 877–8339. Reform Act of 1995 (2 U.S.C. 1531– would not impose substantial direct
SUPPLEMENTARY INFORMATION: 1538) (UMRA) establishes requirements compliance costs on State and local
for federal agencies to assess the effects governments or preempt State law
I. Background and the May 7, 2007,
of their regulatory actions on State, within the meaning of the order.
Proposed Rule
local, and tribal governments, and the
Ginnie Mae guarantees privately private sector. This rule does not Paperwork Reduction Act
issued securities backed by trusts or impose any Federal mandate on any The information collection
pools of mortgage loans that are insured State, local, or tribal government, or the requirements contained in this rule are
or guaranteed by the Federal Housing private sector within the meaning of currently approved by the Office of
Administration, the Rural Housing UMRA. Management and Budget (OMB) under
Service, the Department of Veterans section 3504(h) of the Paperwork
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Affairs, and the Department of Housing Environmental Impact Reduction Act of 1995 (44 U.S.C. 3501–
and Urban Development (HUD). Ginnie This rule does not direct, provide for 3520) and assigned OMB control
Mae is a government corporation within assistance or loan and mortgage number 2503–0033. An agency may not
HUD, authorized by the National insurance for, or otherwise govern or conduct or sponsor, and a person is not
Housing Act (12 U.S.C. 1716 et seq.). regulate, real property acquisition, required to respond to, a collection of

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Federal Register / Vol. 72, No. 165 / Monday, August 27, 2007 / Rules and Regulations 49125

information, unless the collection or before, and securities backed by PART 350—BOOK-ENTRY
displays a currently valid control multifamily mortgages with issue dates PROCEDURES
number. of February 1, 2002, or before, have been
List of Subjects in 24 CFR Parts 320 and issued in certificated form. Securities ■ 4. The authority citation for 24 CFR
350 issued after these dates will be issued in part 350 continues to read as follows:
book-entry form. The Association may Authority: 12 U.S.C. 1721(g) and 1723a(a);
Mortgages, Securities. approve the issuance of certificated and 42 U.S.C. 3535(d).
■ Accordingly, for the reasons described securities for good cause.
in the preamble, HUD amends 24 CFR ■ 5. Revise § 350.8(a) to read as follows:
* * * * *
parts 320 and 350, as follows:
§ 350.8(a) Withdrawal of eligible book-
PART 320—GUARANTY OF ■ 3. Revise § 320.10 to read as follows: entry Ginnie Mae securities for conversion
§ 320.10 Financial reporting.
(a) Eligible book-entry Ginnie Mae
■ 1. The authority citation for 24 CFR Issuers shall submit to the Association securities may be withdrawn from the
part 320 continues to read as follows: audited annual financial statements book-entry system after Ginnie Mae has
Authority: 12 U.S.C. 1721(g) and 1723a(a); within 90 days of their fiscal year end. approved a request for the delivery of
and 42 U.S.C. 3535(d). All financial statements shall include a definitive Ginnie Mae securities in the
■ 2. Revise § 320.5(e) to read as follows: balance sheet and a statement of same amount.
operations and cash flows. The audit * * * * *
§ 320.5 Securities. shall be conducted in accordance with
the standards for financial audits of the Dated: August 17, 2007.
* * * * *
(e) Issue Date. Securities backed by U.S. Government Accountability Roy A. Bernardi,
single-family mortgages with issue dates Office’s Government Auditing Deputy Secretary.
of October 1, 1998, or before, serial Standards, issued by the Comptroller [FR Doc. E7–16890 Filed 8–24–07; 8:45 am]
notes with issue dates of July 1, 2002, General of the United States. BILLING CODE 4210–67–P
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