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CFR Citation: 12 CFR Part 1750

RIN ID: RIN 2550-AA38

NOTICE: RULES

SUBJECT CATEGORY: Risk-Based Capital Regulation--Loss Severity Amendments

DOCUMENT SUMMARY: Correction

In rule document E813378 beginning on page 35893 in the issue of Wednesday, June 25, 2008 make the following corrections:

1. On page 35893, in the third column, the last paragraph and its accompanying footnotes should read as follows:

Title XIII of the Housing and Community Development Act of 1992, Public Law 102550, titled the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (Act) (12 U.S.C. 4501 et seq.), established OFHEO as an independent office within the Department of Housing and Urban Development to ensure that Fannie Mae and Freddie Mac (collectively the Enterprises) are adequately capitalized, operate safely and soundly, and comply with applicable laws, rules and regulations. The Act provides that the Director of OFHEO (Director) is authorized to make such determinations and take such actions as the Director determines necessary with respect to the issuance of regulations regarding, among other things, the required capital levels for the Enterprises.\1\ The Act further provides that the Director shall issue regulations establishing the riskbased capital test (Risk Based Capital Regulation) and that the RiskBased Capital Regulation, subject to certain confidentiality provisions, shall be sufficiently specific to permit an individual other than the Director to apply the riskbased capital test in the same manner as the Director.\2\ \1\ 12 U.S.C. 4513(a), (b)(1), (b)(3).

\2\ 12 U.S.C. 1361(e)(1), (e)(3).

2. On page 35894, in the first column, the first full paragraph and its accompanying footnotes should read as follows:

Pursuant to the Act, OFHEO published a final regulation setting forth a riskbased capital test which forms the basis for determining the riskbased capital requirement for each Enterprise.\3\ The Risk Based Capital Regulation has been amended to incorporate corrective and technical amendments that enhance the transparency sensitivity to risk and accuracy of the calculation of the riskbased capital
requirement.\4\
\3\ RiskBased Capital, 66 FR 47730 (September 13, 2001), 12 CFR part 1750.
\4\ RiskBased Capital, 66 FR 47730 (September 13, 2001), 12 CFR part 1750, as amended, 67 FR 11850 (March 15, 2002), 67 FR 19321 (April 19, 2002), 67 FR 66533 (November 1, 2002), 68 FR 7309 (February 13, 2003), 71 FR 75085 (December 14, 2006).

3. On the same page, in the second column, the first full paragraph and its accompanying footnote should read as follows:

Consistent with the Act and OFHEO's commitment to review, update and enhance the RiskBased Capital Regulation in order to ensure an accurate risk sensitive and transparent calculation of the riskbased capital requirement, OFHEO published a notice of proposed rulemaking (NPRM) to incorporate amendments to the RiskBased Capital
Regulation.\5\ Specifically, OFHEO proposed two changes to the Risk Based Capital Regulation. The first change was proposed because certain loss severity equations resulted in the Enterprises recording profits instead of losses on foreclosed mortgages during the calculation of the riskbased capital requirement. The current loss severity equations overestimate Enterprise recoveries for defaulted government guaranteed and low loantovalue loans. The results generated by the current loss severity equations are not consistent with the RiskBased Capital Regulation and result in significant reductions in the riskbased capital requirements for the Enterprises. The second change relates to the treatment of Federal Housing Administration insurance associated with singlefamily loans with a loantovalue ratio below 78%. OFHEO proposed changes related to these loans that would make the RiskBased Capital Regulation consistent with current law.
\5\ RiskBased CapitalLoss Severity Amendments, 72 FR 68656 (December 5, 2007).
[FR Doc. Z813378 Filed 71408; 8:45 am]
BILLING CODE 150501D

SUMMARY: Risk-Based Capital Regulation; Loss Severity Amendments; Correction,

DOCUMENT BODY 2: Correction

In rule document E813378 beginning on page 35893 in the issue of Wednesday, June 25, 2008 make the following corrections:

1. On page 35893, in the third column, the last paragraph and its accompanying footnotes should read as follows:

Title XIII of the Housing and Community Development Act of 1992, Public Law 102550, titled the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (Act) (12 U.S.C. 4501 et seq.), established OFHEO as an independent office within the Department of Housing and Urban Development to ensure that Fannie Mae and Freddie Mac (collectively the Enterprises) are adequately capitalized, operate safely and soundly, and comply with applicable laws, rules and regulations. The Act provides that the Director of OFHEO (Director) is authorized to make such determinations and take such actions as the Director determines necessary with respect to the issuance of regulations regarding, among other things, the required capital levels for the Enterprises.\1\ The Act further provides that the Director shall issue regulations establishing the riskbased capital test (Risk Based Capital Regulation) and that the RiskBased Capital Regulation, subject to certain confidentiality provisions, shall be sufficiently specific to permit an individual other than the Director to apply the riskbased capital test in the same manner as the Director.\2\ \1\ 12 U.S.C. 4513(a), (b)(1), (b)(3).

\2\ 12 U.S.C. 1361(e)(1), (e)(3).

2. On page 35894, in the first column, the first full paragraph and its accompanying footnotes should read as follows:

Pursuant to the Act, OFHEO published a final regulation setting forth a riskbased capital test which forms the basis for determining the riskbased capital requirement for each Enterprise.\3\ The Risk Based Capital Regulation has been amended to incorporate corrective and technical amendments that enhance the transparency sensitivity to risk and accuracy of the calculation of the riskbased capital
requirement.\4\
\3\ RiskBased Capital, 66 FR 47730 (September 13, 2001), 12 CFR part 1750.
\4\ RiskBased Capital, 66 FR 47730 (September 13, 2001), 12 CFR part 1750, as amended, 67 FR 11850 (March 15, 2002), 67 FR 19321 (April 19, 2002), 67 FR 66533 (November 1, 2002), 68 FR 7309 (February 13, 2003), 71 FR 75085 (December 14, 2006).

3. On the same page, in the second column, the first full paragraph and its accompanying footnote should read as follows:

Consistent with the Act and OFHEO's commitment to review, update and enhance the RiskBased Capital Regulation in order to ensure an accurate risk sensitive and transparent calculation of the riskbased capital requirement, OFHEO published a notice of proposed rulemaking (NPRM) to incorporate amendments to the RiskBased Capital
Regulation.\5\ Specifically, OFHEO proposed two changes to the Risk Based Capital Regulation. The first change was proposed because certain loss severity equations resulted in the Enterprises recording profits instead of losses on foreclosed mortgages during the calculation of the riskbased capital requirement. The current loss severity equations overestimate Enterprise recoveries for defaulted government guaranteed and low loantovalue loans. The results generated by the current loss severity equations are not consistent with the RiskBased Capital Regulation and result in significant reductions in the riskbased capital requirements for the Enterprises. The second change relates to the treatment of Federal Housing Administration insurance associated with singlefamily loans with a loantovalue ratio below 78%. OFHEO proposed changes related to these loans that would make the RiskBased Capital Regulation consistent with current law.
\5\ RiskBased CapitalLoss Severity Amendments, 72 FR 68656 (December 5, 2007).
[FR Doc. Z813378 Filed 71408; 8:45 am]
BILLING CODE 150501D