Loan guaranty: Correction,

[Federal Register: May 26, 1999 (Volume 64, Number 101)]

[Rules and Regulations]

[Page 28363]

From the Federal Register Online via GPO Access [wais.access.gpo.gov]

[DOCID:fr26my99-8]

DEPARTMENT OF VETERANS AFFAIRS

38 CFR Part 36

RIN 2900-AI92

Loan Guaranty: Requirements for Interest Rate Reduction Refinancing Loans

AGENCY: Department of Veterans Affairs.

ACTION: Final rule; correction and delay of effective date.

SUMMARY: This document makes a correction to a final rule amending our loan guaranty regulations concerning the requirements for Interest Rate Reduction Refinancing Loans (IRRRLs). This document also delays for 14 days the effective date of the final rule. Under the final rule, generally to obtain an IRRRL the veteran's monthly mortgage payment must decrease. Also, the final rule provides that the loan being refinanced must not be delinquent or the veteran seeking the loan must meet certain credit standard provisions. The new effective date is June 7, 1999. These actions are needed because of a lawsuit concerning the final rule.

DATES: The final rule published in the Federal Register on April 23, 1999 (64 FR 19906), with changes made by this document, is effective June 7, 1999.

FOR FURTHER INFORMATION CONTACT: R.D. Finneran, Acting Assistant Director for Loan Policy and Valuation (262), Loan Guaranty Service, Veterans Benefits Administration, Department of Veterans Affairs, 810 Vermont Avenue, NW, Washington, DC 20420, (202) 273-7368.

SUPPLEMENTARY INFORMATION: Under the authority of 38 U.S.C. chapter 37, VA guarantees loans made by lenders to eligible veterans to purchase, construct, improve, or refinance their homes (the term veteran as used in this document includes any individual defined as a veteran under 38 U.S.C. 101 and 3701 for the purpose of housing loans). This document amends VA's loan guaranty regulations by revising the requirements for VA-guaranteed IRRRLs.

The IRRRL program was established by Public Law No. 96-385, October 7, 1980. IRRRLs are designed to assist veterans by allowing them to refinance an outstanding VA-guaranteed loan with a new loan at a lower rate. The provisions of 38 U.S.C. 3703(c)(3) and 3710(e)(1)(C) allow the veteran to do so without having to pay any out-of-pocket expenses. The veteran may include in the new loan the outstanding balance of the old loan plus reasonable closing costs, including up to two discount points.

We published a final rule in the Federal Register on April 23, 1999 (64 FR 19906), to amend the loan guaranty regulations concerning the requirements for IRRRLs. Under the final rule, generally to obtain an IRRRL the veteran's monthly mortgage payment must decrease. Also, the final rule provides that the loan being refinanced must not be delinquent or the veteran seeking the loan must meet certain credit standard provisions.

We are changing 38 CFR 36.4306a(a)(6) in the final rule to reflect statutory provisions at 38 U.S.C. 3710(e)(1)(D) which state that the dollar amount of guaranty on IRRRLs may not exceed the greater of the original guaranty amount of the loan being refinanced or 25 percent of the loan. Since this change merely restates statutory provisions there is a basis for dispensing with notice-and-comment and delayed effective date provisions of 5 U.S.C. 553.

We are also changing the effective date of the final rule. The effective date for the final rule was scheduled to be May 24, 1999. This document changes the effective date to June 7, 1999.

These actions are needed because of a lawsuit concerning the final rule.

Accordingly, in FR Doc. 99-10146 published on April 23, 1999 (64 FR 19906) make the following correction. On page 19910, in Sec. 36.4306a, paragraph (a)(6) is corrected to read as follows:

Sec. 36.4306a Interest rate reduction refinancing loan.

(a) * * *

(6) The dollar amount of guaranty on the 38 U.S.C. 3710(a)(8) or (a)(9)(B)(i) loan may not exceed the greater of the original guaranty amount of the loan being refinanced or 25 percent of the loan; and * * * * *

Approved: May 21, 1999. Togo D. West, Jr., Secretary of Veterans Affairs.

[FR Doc. 99-13396Filed5-21-99; 3:38 pm]

BILLING CODE 8320-01-P