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58 99 2 F e d e r a l R e g i s t e r / V ol . 77, No. 186 / Tu es d ay, Sep tem be r 25, 2012 / Noti ces

up f r ont f ee it se lf . Dividin g th e up f r ont f ee by f ive p r ov id es an app r ox im ati on of th e p otenti a l im p ac t on th e int e r es t r ate.To ill u s t r a te, a 15 ba sis p oin t up f r on t f ee, if f ull y p asse d th r ou gh by th elend e r , wou ld be r ou gh ly equ ivalen t toan in c r ea se in th e a nnu al int e r es t r ate o f th r ee bas is p oint s. Und e r FHFA sp lann ed app r oac h , a h om eo w n e r in an aff ec ted state ob tainin g a 30 -yea r , f ixe d - r ate m o r tgage of $200,000 cou ld see an in c r ease o f app r ox ima tely $3.50 to $7.00in hi s o r h e r m onthl y m o r tgage p ay m en t , r ef lec ti n g a r an ge o f up f r on t f ee a d ju s tme nt s o f 15 to 30 bas is p oint s.

Th e me th od ology u se d by th e agen cyto d eve lop th e pl ann ed app r oac h add r esses o nl y di ff e r en ces in th eex p ec ted co st of d ef au lt s ass oc iated w ith s in gle-f am il y mo r tgages th at w ill be ac qu i r ed by th e En te r p r ises in th e f utu r e a nd a r e und e r w r itt en acco r din g to cu rr ent s tand a r d s. If FHFA h ad d eve lop ed an app r oac h u s in g in f o r m a ti on on th e r ea li ze d d ef au lt losses on loan s th e En te r p r ises ac qu i r ed in th e p as t d eca d e, w hi ch we r eo r igin ated und e r less st r in gent und e r w r iti n g gu id eli n es , th e in c r eases in up f r ont f ees in th e s tates a ff ec ted would be signi f ica ntl y gr ea te r , beca u se

r ece ntl y acq ui r ed mo r tgages a r eex p ec ted to d ef ault at lowe r r ates du e tost r en gth en ed und e r w r itin g s tand a r d s.

M e t h o d o lo g y Th e me th od ology u se d to d eve lop th e

pl ann ed app r oac h to s tate-leve l g-f eep r icin g r eli es o n th r ee key f ac to r s. Th ef i r s t is th e ex p ec ted nu mbe r of d ays th a t it takes a n Ent e r p r ise to f o r ec lose a nd

ob ta in ma r ke tab le titl e to th e co ll ate r al back in g a mo r tgage in a p a r ti cul a r sta te.Th e seco nd is th e ave r age p e r -d ayca rr yin g cos t th at th e Ent e r p r ises in cu r in th at s tate. Th e thi r d is th e ex p ec ted n ati on al ave r age d ef ault r a te o n s in gle- f am il y m o r tgages acq u i r ed by th eEn te r p r ises. To e s ti m ate th e m agn it ud eof th e state-leve l d iff e r en ce s in ave r agetotal ca rr yin g co st , th e e sti m a ti on ass u m es th a t loa n s o r igin ated in eac h state w ill d ef au lt at th e n ati on al ave r age d ef au lt r ate.

Th e tab le be low , titl ed Esti ma ted T ime to Obtain Ma r ke tab le T itl e a nd Cost p e r Day Rela ti ve to th e Nati on a l Ave r age, p r ov id es in f o r ma ti on on th e ti me p e r iod s a nd cos ts u se d to d eve lop th e p r op osed f ee s. Th e co lu m n titl ed Fo r ec losu r e T ime li n e in Days sh ow s,f o r eac h state, th e ta r get nu mbe r of d aysaf te r th e las t p aid in sta ll m en t on a

mo r tgage f o r a loa n se r vice r to com pl eteth e f o r ec losu r e sa les p r ocess . Th ose ti m elin es a r e pu bli sh ed in eac h Ent e r p r ise s se r vic in g guid e a nd a r er ev iewed and upd ated as n ece ss a r yeve r y s ix mo nth s. Th e ti me lin es s h ow n in th e colu m n we r e pu bli sh ed in Jun e 2012 a t h tt p s : // www .e f a nn ie m a e .c o m / sf / g u id e s / ss g / r el a t e d se r v ici n g in f o / pd f / f o r eclo su r e t im e f r a m e s . pd f and h tt p : // www .f r e dd ie m a c.co m / le a r n / pd f s / se r v ice / ex h ibi t 83. pd f .

Th e ti m e lin es a r e p e r iod s w ithin w hi ch Ent e r p r ise se r vice r s a r e ex p ec ted to co m p lete th e f o r ec losu r e p r oce ss f o r mo r tgages th at did n ot qu ali f y f o r loa n m od if ica ti on o r oth e r loss m iti ga ti on alt e r n ati ves. Th e ti me lin es a r e d e r ive d f r om an an a lys is of th e Ent e r p r ises ac tu al ex p e r ien ce w it h f o r ec losu r ep r ocess in g in eac h s tate, a d ju s ted f o r exis ti n g statu to r y r equ i r eme n ts and ce r tain ch an ges in law o r p r ac ti cedu r in g th e h is to r ica l p e r iod . Th epu bli sh ed ti me lin es also tak e int oacco unt th e e ff ec ts th a t f o r ec los u r em o r ato r iu ms o r oth e r ex tenu a ti n g ci r cu ms tan ces and lend e r -sp ec if ic d e lays o ut sid e th e ex p ec ted n o r ms f o r th at sta te m ay h ave h ad on ac tu al f o r ec losu r e ti me li n es .

ESTIMATED TIME TO OBTAIN MARKETABLE TITLE AND COST PER DAY RELATIVE TO THE NATIONAL AVERAGE

State 1 Foreclosuretimeline in

days 2

Estimatedaverage

unable-to-market

time in days

Total timeto obtain

marketabletitle in days

Cost perday relative

to thenational

average 3 (%)

Rank (totaltime * cost) 4

AK ........................................................................................ 300 0 300 93 11

AL ......................................................................................... 270 0 270 93 2AR ........................................................................................ 280 0 280 102 13AZ ......................................................................................... 300 0 300 84 3CA ........................................................................................ 300 0 300 90 7CO ........................................................................................ 330 0 330 85 12CT ........................................................................................ 690 0 690 109 52DC ........................................................................................ 300 0 300 86 5DE ........................................................................................ 480 0 480 83 27FL ......................................................................................... 660 0 660 111 51GA ........................................................................................ 270 0 270 101 9GU ........................................................................................ 500 0 500 100 38HI .......................................................................................... 500 90 590 79 35IA .......................................................................................... 480 0 480 110 42ID .......................................................................................... 440 0 440 88 26IL .......................................................................................... 480 60 540 118 50IN .......................................................................................... 480 0 480 107 40KS ........................................................................................ 330 90 420 108 33

KY ........................................................................................ 420 30 450 97 32LA ......................................................................................... 390 0 390 106 29MA ........................................................................................ 350 0 350 97 22MD ........................................................................................ 485 120 605 97 49ME ........................................................................................ 570 0 570 95 44MI ......................................................................................... 270 180 450 118 43MN ........................................................................................ 270 180 450 96 30MO ....................................................................................... 270 0 270 109 17MS ........................................................................................ 270 0 270 107 14MT ........................................................................................ 360 0 360 88 20NC ........................................................................................ 300 0 300 91 10ND ........................................................................................ 405 60 465 109 39NE ........................................................................................ 330 0 330 114 25NH ........................................................................................ 270 0 270 110 18

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58 993F e d e r a l R e g i s t e r / V ol . 77, No. 186 / Tu es d ay, Sep tem be r 25, 2012 / Noti ces

ESTIMATED TIME TO OBTAIN MARKETABLE TITLE AND COST PER DAY RELATIVE TO THE NATIONAL AVERAGE Continued

State 1 Foreclosuretimeline in

days 2

Estimatedaverage

unable-to-market

time in days

Total timeto obtain

marketabletitle in days

Cost perday relative

to thenational

average 3 (%)

Rank (totaltime * cost) 4

NJ ......................................................................................... 750 0 750 113 53NM ........................................................................................ 450 60 510 91 34NV ........................................................................................ 360 0 360 83 19

NY ........................................................................................ 820 0 820 112 54OH ........................................................................................ 450 30 480 114 45OK ........................................................................................ 420 0 420 104 31OR ........................................................................................ 330 0 330 88 16PA ........................................................................................ 480 0 480 108 41PR ........................................................................................ 720 0 720 68 37RI .......................................................................................... 330 0 330 107 23SC ........................................................................................ 420 0 420 95 28SD ........................................................................................ 360 180 540 105 46TN ........................................................................................ 270 0 270 96 6TX ......................................................................................... 270 0 270 132 24UT ........................................................................................ 330 0 330 82 8VA ........................................................................................ 270 0 270 87 1VI .......................................................................................... 510 0 510 93 36VT ......................................................................................... 510 30 540 105 47WA ....................................................................................... 330 0 330 88 15WI ......................................................................................... 480 30 510 113 48

WV ....................................................................................... 290 0 290 87 4WY ....................................................................................... 270 120 390 86 21National Average (UPB Weighted) . .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. . 396 17 413 100

1 Includes the District of Columbia and certain U.S. territories. The Enterprises do not currently acquire loans in the Northern Mariana Islandsor American Samoa.

2 Foreclosure time frames are available online at: https://www.efanniemae.com/sf/guides/ssg/relatedservicinginfo/pdf/foreclosuretimeframes.pdf and http://www.freddiemac.com/learn/pdfs/service/exhibit83.pdf.

3 Cost per day is expressed as an index relative to the UPB-weighted national average, where 100% represents the average cost. It excludesHARP loans.

4 Rank is a function of the total time to obtain marketable title multiplied by the indexed cost. The product for each state is indicative of the rel-ative total carrying cost upon which FHFA would base its adjustments to upfront fees. 1 represents the lowest-cost area and 54 the highest-cost area.

Th e co lu m n titl ed Es ti ma ted Ave r ageUn ab le-to-Ma r ke t T ime in Days sh ow s Ent e r p r ise es ti ma tes of th e

add iti on al ti me af te r th e f o r ec losu r e sa le d ate in ce r tain s tates be f o r e a n En te r p r ise ca n be gin to m a r ke t and se ll th e p r op e r ty. Th ese a dditi on al p e r iod sof ti me a r e o f ten du e to a s tatut o r il y se t p os t-f o r ec los u r e r ed em pti on p e r iod th at all ow s a bo rr owe r to r ed eem o r r ec ov e r th e p r op e r ty by p ayin g off th e d ef au lt ed loa n , o r a r e du e to o th e r co u r t- m and ated p r oce du r es th at oth e r w isep r eve nt an Ent e r p r ise f r om ma r ke tin g and se llin g th e f o r ec lose d p r op e r ty.Th ese ti me es ti ma tes we r e base d on r ece nt Ent e r p r ise exp e r ien ce and state law .

Th e co lu m n titl ed Total T im e toObtain Ma r ke tab le T itl e in Days p r ov id es th e s u m o f th e nu mbe r of d ayssh ow n in th e two p r ece din g co lu m n s,w hi ch equ a ls th e es ti ma ted ave r age len gth of ti me f r om th e d ate of th e las t m o r tgage p ay m en t to th e d ate o n w h ich th e f o r ec losed p r op e r ty is eli gible to bema r ke ted f o r sa le. A lth ou gh th ese ti mesa r e base d on r ece nt d ata, th ey d o n ot r ef lec t ch an ges to s tate law s th at h ave n ot bee n in eff ec t lon g en ou gh to

in f lu en ce th e f o r ec losu r e ti me li n es pu bli sh ed by th e Ent e r p r ises.

Th e seco nd f ac to r u se d in th e

esti m ati on is th e p e r -d ay ca rr yin g co st in cu rr ed by th e En te r p r ises on n on - p e r f o r m in g loa n s, w hi ch va r ies ac r ossth e s tates. Th at cos t in clud es p r op e r tytaxe s, legal ex p en ses, h aza r d in su r an ce,cos ts r e lated to ma int en an ce a nd p r op e r ty r ep ai r s, a nd th e Ent e r p r ises co sts of f in an cin g a n on -p e r f o r m in g m o r tgage. Th ese cos ts w e r e es ti ma ted u sin g r ece nt d ata. State a nd loca l gove r n m en t d ec ision s ca n s ign i f ica n tl yaff ec t th e ca rr yin g cos t p e r d ay,es p ec iall y w ith r es p ec t to p r op e r tytaxe s.

Th e co lu m n titl ed Cos t p e r DayRelati ve to th e Nati on al Ave r age sh ow s a s ta te-by -state ind ex o f es ti ma ted p e r - d ay ca rr yin g co sts p e r d oll a r of unp aid p r in c ip al ba lan ce , w h e r e th e n ati on al ave r age eq u als 100 p e r ce nt . Th ose ind exva lu es we r e d e r ive d f r om se p a r ateesti m ates f r om eac h En te r p r ise, w h ich FHFA weight ed on th e bas is o f th eEnt e r p r ises r es p ec ti ve ma r ke t sh a r es in r ece n t yea r s.

Th e colu m n titl ed Ran k sh ow s th e total ti me to ob tain ma r ke tab le titl em ultipli ed by th e ind exe d p e r -d ay

ca rr yin g cost . Fo r eac h s tate, thi s p r odu ct is indi ca ti ve o f th e r elati ve total ca rr yin g cos ts up on w hi ch th e a gen cy

would base it s a d ju s tme nt s to up f r ont f ees und e r th e pl ann ed app r oac h . Th esta tes, Dist r ict of Colu mb ia, a nd te rr it o r ies a r e r an ke d , w ith 1 r ep r esen ti n g th e low est-co s t a r ea a nd 54 th e h igh es t-cost a r ea .

Th e f i r s t two f ac to r sd ays to ob tain ma r ke tab le titl e a nd p e r -d ay ca rr yin g co stsp r ov id e e s ti m ates of th e total ca rr yin g cos t of a d ef ault ed mo r tgage, bysta te. Th e thi r d f ac to r u se d in th em eth od ology is th e ex p ec ted n ati on al ave r age d ef ault r ate on s in gle-f am il ymo r tgages acq ui r ed by th e Ent e r p r ises.Th is w as es ti m ated u sin g th e n a ti on al book o f bu sin ess ac qui r ed by Fanni e Mae a nd F r eddi e Mac in th e f i r st h alf of 2012. Sin ce th e n ati on al ave r age d ef au lt r ate is u se d in th e es ti ma ti on , th e up f r ont f ees th at th e Ent e r p r ises would im p ose o n loa n s o r igin a ted in ce r ta in sta tes , und e r FHFA s p lann ed app r oac h ,a r e n ot aff ec ted by a n y va r iati on th a t m ay ex is t at th e s tate leve l in th e c r edit qu alit y o f loan s ac qu i r ed by th e Ent e r p r ises, ex p ec ted f utu r e h ou se p r icemoveme nt s, o r oth e r f ac to r s th at mayaff ec t th e li ke li h oo d of loa n d ef au lt .

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