MIRS Supp Statements A and B

MONTHLY SURVEY OF RATES
AND TERMS ON
CONVENTIONAL
1-FAMILY NONFARM MORTGAGE LOANS (MIRS)
OMB NUMBER 2590-0004
SUPPORTING STATEMENT
Introduction
The Federal Housing Finance Agency (FHFA) MIRS collection of information is in
transition as the result of the enactment of the Housing and Economic Reform Act of 2008
(HERA), which amended the Federal Housing Safety and Soundness Act of 1992 (Safety
and Soundness Act) (12 U.S.C. 4501 et seq.) and the Federal Home Loan Bank Act (12
U.S.C. 1421 et seq.) to establish FFHA as an independent agency of the Federal
government.1
Because FHFA has no authority to compel the reporting of data, the number of respondents
to MIRS has been decreasing and the sample size has become deficient. In December
2006, 121 institutions reported 217,422 loans; in December 2009, 76 institutions reported
82,517 loans. The most recent news release on MIRS in December 2010, indicated that 34
institutions reported 3,943 loans. The decline in the number of participants reflects, in part,
the consolidation within the mortgage lending industry, while the decline in the number of
loans reflects that and lower volumes of new originations, generally. The news release
noted that FHFA’s report on interest rates contains no data on adjustable-rate mortgages due
to insufficient sample size, only partly reflecting the current unpopularity of such loans.
See http://www.fhfa.gov/webfiles/19615/Dec_MIRS_Dec_2010_final.pdf.
In light of the deficient sample size, the current survey has many limitations. FHFA is
actively seeking a method to obtain from other sources the necessary information to assess
the national average one-family house price for use for adjusting the conforming loan
limitations of Freddie Mac and Fannie Mae. FHFA intends to retire the MIRS after such
method is found and implemented.
A.

Justification

1.

Circumstances Necessitating Collection of Information

The MIRS collection of information began with one of FHFA’s predecessor agencies, the
former Federal Housing Finance Board (Finance Board). MIRS, is a monthly survey of
major lenders that are asked to report the terms and conditions on all conventional, single1

See Division A, titled the “Federal Housing Finance Regulatory Reform Act of 2008,” tit. I, section 1101 of
HERA.

family, fully amortized, purchase-money loans closed the last five working days of the
month. MIRS excludes FHA-insured and VA-guaranteed loans, multifamily loans, mobile
home loans, and loans created by refinancing another mortgage. Respondents are requested
to submit the information on a monthly basis. MIRS is described in 12 CFR 906.5.
FHFA considers MIRS, among other indexes or measures FHFA determines are appropriate,
in establishing and maintaining a method to assess the national average one-family house
price for use for adjusting the conforming loan limitations of Freddie Mac and Fannie Mae.
12 U.S.C. 4542.
Statutory references of the MIRS include the following:


In 1989, Congress required the Chairperson of the Finance Board to take necessary
actions to ensure that indices used to calculate the interest rate on adjustable-rate
mortgages (ARMs) remain available. See the Financial Institutions Reform,
Recovery and Enforcement Act of 1989(FIRREA), tit. IV, section 402, paragraphs
(e)(3)-(4), 103 Stat. 183, codified at 12 U.S.C. 1437 note. At least one ARM index,
known as the National Average Contract Mortgage Rate for the Purchase of
Previously Occupied Homes by Combined Lenders, is derived from the MIRS data.
The statute permits FHFA to substitute a different ARM index after notice and
comment only if the new ARM index is based upon data substantially similar to that
of the original ARM index and substitution of the new ARM index will result in an
interest rate substantially similar to the rate in effect at the time the new ARM index
replaces the existing ARM index. See 12 U.S.C. 1437 note. For a period in 1980
and 1981, an ARM index derived from MIRS was the only ARM index that federally
chartered savings institutions could use. Few, if any, loans from that 1980-1981
period remain. Subsequent to 1981, an unknown but likely very small proportion of
new ARMs used this index. There was no reference in FIRREA to the continuation
of the MIRS survey of housing prices.



Statutes in several states and U.S. territories, including California, Michigan,
Minnesota, New Jersey, Wisconsin, and the Virgin Islands, refer to, or rely upon, the
MIRS. See, e.g., Cal. Civ. Code §§ 1916.7 and 1916.8 (mortgage rates); Mich.
Comp. Laws § 445.1621(d) (mortgage index rates); Minn. Stat. § 92.06 (payments
for state land sales); N.J. Rev. Stat. 31:1-1 (interest rates); Wis. Stat. § 138.056
(variable loan rates); V.I. Code Ann. tit. 11, § 951 (legal rate of interest).

2.

Use of the Data

The information collection is used for the purposes described in the answer to Item 1. In
addition, FHFA uses the information collection to produce the MIRS and for general
statistical purposes. The MIRS provides monthly information on interest rates, loan terms,
and house prices by property type (all, new, previously occupied) and by lender type
(savings associations, mortgage companies, commercial banks, and savings banks), as well
as information on 15-year and 30-year fixed-rate loans. In addition, the MIRS provides

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quarterly information on conventional loans by major metropolitan area and by Federal
Home Loan Bank district.
Mortgage lenders report voluntarily the terms and conditions on all single-family, fully
amortized, purchase-money, non-farm loans that they close during the last five business
days of the month. The MIRS excludes FHA-insured and VA-guaranteed loans,
multifamily loans, mobile home loans, and loans created by refinancing another mortgage.
Respondents are requested to submit the information on a monthly basis.
Economic policy makers have used the MIRS data to determine trends in the mortgage
markets, including interest rates, down payments, terms to maturity, terms on ARMs, and
initial fees and charges on mortgage loans. Other federal banking agencies, such as the
Board of Governors of the Federal Reserve System and the Council of Economic Advisors,
have used the MIRS results for research purposes.
3.

Use of Improved Information Technology to Reduce Burden

Most (90%) of the respondents submit the requested information electronically using the
MIRS software in a format similar to FHFA Form #075 (supersedes FHFB Form 10–91).
Some respondents elect to complete FHFA Form #075 and submit it by facsimile.
4.

Efforts to Identify Duplication

The information collected generally is not available from any other source and MIRS is
unique in that in spans a long period of time, and it provides information on both fixed and
adjustable rates combined.
5.

Methods to Minimize Burden on Small Businesses or Other Small Entities

The collection of information does not affect small businesses or other small entities.
6.

Consequences of Less Frequent Collection on Federal Programs or Policy
Activities

Pursuant to the statutory requirements described in the answer to Item 1, FHFA conducts the
information collection on a monthly basis. In addition, a few remaining ARM contracts
linked to the MIRS rely upon the data provided monthly.
7.

Explanation of any Special Circumstances

FHFA will collect information under this clearance in a manner that complies with 5 CFR
1320.5(d) (2). FHFA also contemplates that there are no special circumstances that require
FHFA to conduct the information collection in a manner inconsistent with the guidelines in
Item 7 of the Certification Requirements for Paperwork Reduction Act.

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8.

Notice and Comments & Consultation with those whose information will be
obtained on Availability of Data, Frequency of Collection, Clarity of
Instructions and Forms, and Data Elements

FHFA published a 60-day notice in the Federal Register on May 12, 2010 (75 FR 26756), as
required by 5 CFR 1320.8(d) soliciting comments on the information collection prior to
submission to OMB. FHFA received comments from three organizations, which are posted
on its web site at
http://www.fhfa.gov/Default.aspx?Page=89&ListNumber=5&ListID=14707&ListYear=201
0&SortBy=#14707. The commenters support continuation of the MIRS. One commenter
suggested enhancing the utility of the MIRS by including mortgages that are backed by FHA
or the Department of Veterans Affairs. Another commenter suggested a new sampling
frame using Home Mortgage Disclosure Act data to enhance the utility of the MIRS data.
FHFA also published a 30-day notice in the Federal Register on August 27, 2010 (75 FR
52747), as required by 5 CFR 1320.8. One comment was received, which is posted on its
web site at http://www.fhfa.gov/webfiles/16595/75_FR_52747_08-27-2010.pdf. That
commenter also supported the continuation of MIRS.
Although the commenters support the continuation of MIRS, because of the continuing issue
of insufficient sample size, FHFA is seeking alternative sources of data rather than
enhancing MIRS
9.

Explanation of Decision to Provide any Payment or Gift to Respondents

No payments or gifts will be made to respondents.
10.

Description of Assurance of Confidentiality to Respondents

FHFA will not provide any assurance of confidentiality to respondents. However, when
FHFA responds to requests for individual loan data, which is similar to information
contained in public land records, it does not disclose the identity of the lender or any loan
identification number. The MIRS report contains no borrower identifier more specific than
a ZIP code.
11.

Justification of Sensitive Questions

The MIRS will not ask questions or collect data of a sensitive nature, such as sexual
behavior and attitudes, religious beliefs, and other matters that are commonly considered
private.

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12.

Estimates of Respondents Burden

The estimated annualized hour burden is 200 hours. FHFA based these estimates on the
following calculations:
Clerical staff completes and submits FHFA Form #075 (supersedes FHFB Form 10–91) or
provides information through the MIRS software.
Review/processing time: 0.33 hours
Total forms: 608 (76 respondents x 8 monthly reports)
Total hours: 200
13.

Estimated Total Annual Cost Burden to Respondents

The estimated annualized cost to respondents of the information collection is $7,000.
estimate is based on the following calculations:

This

Clerical staff completes and submits FHFA Form #075 (supersedes FHFB Form 10–91) or
provides information through the MIRS software.
Review/processing time: 0.33 hours
Total forms: 608 (76 respondents x 8 monthly reports)
Total hours: 200
Hourly rate: $35 (includes salary, benefits, and overhead)
Total cost: $7,000
14.

Estimated Total Annual Cost Burden to the Federal Government

The estimated annualized cost to FHFA of the information collection is $80,125. The
estimated annualized hour burden is 1,144 hours. FHFA based these estimates on the
following:
$80,125 for FHFA staff salaries and benefits, which includes 40 percent of the time of the
principal analyst, 10 percent of the time of a senior information technology specialist, 5
percent of the time of the program supervisor, and a 25 percent allowance for benefits.
15.

Reasons for Program Changes or Adjustments Reported on the Burden
Worksheet.

In 2006, 121 institutions reported 217,422 loans. In 2009, 76 institutions reported 82,517
loans. There was a lower burden to the institutions because fewer institutions were
reporting fewer loans.

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16.
For collections of information whose results will be published, outline plans for
tabulation and publication. Address any complex analytical techniques that will be
used. Provide the time schedule for the entire project, including beginning and
ending dates of the collection of information, completion of report, publication dates,
and other actions.
Information concerning the MIRS is published regularly on the FHFA web site,
http://www.fhfa.gov, in FHFA press releases, in the popular and trade press, in tabular form
including a monthly 1-page ARM index release, a monthly 8- or 12-page release with
mortgage rate and term data, and an annual summary, all available via FHFA’s web site.
Information is also available in publications of other Federal agencies, including The
Economic Report of the President and Statistical Abstract of the United States. FHFA
publishes on its web site the phone number for an automated telephone answering system
that provides callers a recorded message about the ARM index and other MIRS information.
FHFA does not use any complex analytical techniques.
17.

Explanation if Seeking Approval to not Display the OMB Expiration Date

FHFA is not seeking such approval.
18.

Exceptions to the Certification Statement

No exception to the certification statement is being requested.
B.

Collections of Information Employing Statistical Methods

1.

Describe (including a numerical estimate) the potential respondent universe and
any sampling or other respondent selection methods to be used. Data on the
number of entities (e.g., establishments, State and local government units,
households, or persons) in the universe covered by the collection and in the
corresponding sample are to be provided in tabular form for the universe as a
whole and for each of the strata in the proposed sample. Indicate expected
response rates for the collection as a whole. If the collection had been
conducted previously, include the actual response rate achieved during the last
collection.

In 2009, FHFA collected information from 76 respondents on 82,517 loans:


A sample of 105 of approximately 1,074 savings associations. In 2009, 46 savings
associations responded to the information collection. [FHFA has a longstanding
good relationship with savings banks, because FHFA is descended from the Federal
Home Loan Bank Board. Because of this, more savings banks agree to participate
in the survey and continue to submit monthly data.]



A sample of 45 of approximately 3,480 commercial banks and savings banks with
(a) total assets greater than $1 billion with mortgage-related assets of 10 percent, or

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(b) total assets less than $1 billion with mortgage-related assets of 20 percent. In
2009, 24 commercial banks responded to the information collection.


A sample of mortgage companies. Since mortgage companies are not subject to
uniform regulation or registration and are not subject to geographic restrictions on
their operation, the total universe and target sample are difficult to quantify. FHFA
has severe difficulties getting any mortgage companies to participate in the survey.
FHFA would describe the selection of mortgage companies as “every single one that
agreed to participate.” In 2009, 6 mortgage companies responded to the information
collection, including several very large mortgage companies that operate in multiple
states.

The samples have become convenience samples and no further requests for samples will be
undertaken.
2.

Describe the procedures for the collection of information including: statistical
methodology for stratification and sample selection, estimation procedure,
degree of accuracy needed for the purpose described in the justification,
unusual problems requiring specialized sampling procedures, and, any use of
periodic (less frequent than annual) data collection cycles to reduce burden.

Not applicable because sample size has become deficient.
3.

Describe methods to maximize response rates and to deal with issues of nonresponse. The accuracy and reliability of information collected must be shown
to be adequate for intended uses. For collections based on sampling, a special
justification must be provided for any collection that will not yield "reliable"
data that can be generalized to the universe studied.

Not applicable because sample size has become deficient and FHFA has no authority to
compel a response.
4.

Describe any tests of procedures or methods to be undertaken.
Not applicable.

5.

Provide the name and telephone number of individuals consulted on statistical
aspects of the design and the name of the agency unit, contractor(s), grantee(s),
or other person(s) who will actually collect and/or analyze the information for
the agency.
Not applicable.

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