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Federal Register / Vol. 86, No. 102 / Friday, May 28, 2021 / Rules and Regulations with the rule for a small entity is equal to or exceeds 1 percent of annual revenue. The total upper bound cost to small servicers is 0.18 percent of the average annual revenue to small servicers. This ratio is calculated using the total costs on small servicers, rather than the total annual costs. In subsequent years, absent the rule familiarization costs and with the dispersion of the PRA costs, the average annual cost to small servicers will be even below that level.
VA has also considered whether other economic impacts that are not easily quantifiable would have a significant impact on small servicers.49 Ultimately, VA has determined that this final rule is not expected to have a significant economic impact on small servicers.
The effect of the final rule is to provide servicers the opportunity to resolve COVID19 forbearances through a home retention option that will both 1 help veterans return to making regular monthly mortgage payments to the servicer, and 2 recapitalize the servicer by purchasing veterans total forborne indebtedness from the servicer. As discussed above, VA has adopted several changes to the final rule in response to industry comments regarding burdens associated with VAs proposed rule, including streamlining the process and requirements for requesting a partial claim payment.
Additionally, and consistent with current VA servicing regulations and policies, servicers will not be required to offer the partial claim payment as a home retention option. Therefore, if a small servicer determines that participating in the COVIDVAPCP is not consistent with its business model, the final rule provides flexibility for the servicer to resolve forbearances using one of many existing home retention options.
Regarding the economic impact, that is, the paperwork burden, to servicers associated with this rule, VA notes that the changes adopted in this rule resulted in a 33 percent reduction in the estimated per loan paperwork burden to servicers. VA further notes that the economic costs of paperwork associated with this rule cannot be considered additive. In that regard, under existing VA statute and regulations, servicers are required to consider options to resolve a VA-guaranteed loans delinquency once a veteran exits a COVID19
forbearance. Each home retention and alternative to foreclosure option, as well 49 126 Cong. Rec. S10,94010,942 Aug. 6, 1980
discussing that determining whether an economic impact is significant is not an exact standard and that agencies should not be limited to considering easily quantifiable costs.

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as foreclosure itself, imposes some cost to the servicer that is already contemplated in its current business model. Under this rule, the cost to request a partial claim payment replaces the cost of whichever other option would have been selected absent the COVIDVAPCP.
Notably, one commenter stated that the cost to servicers to execute a partial claim payment under the proposed rule was roughly equivalent to the cost to execute a loan modification. As VA
believes a loan modification would be the home retention option most likely to be used to resolve COVID19
forbearances absent this rule, the net impact of this rule on small servicers is likely to be insignificant for those that choose to participate.
To assess whether the rule can be expected to affect a substantial number of small entities, VA considers a ratio that captures the incidence of small VA
servicers in the potential universe of servicers. Specifically, VA uses the ratio of small VA servicers with guaranteed loans in COVID19 forbearance that are likely to participate in the partial claim program to the total number of VA
servicers with guaranteed loans in COVID19 forbearance that are likely to participate in the partial claim program.
As described above, 36 VA servicers out of the 127 servicers with sufficient data available are small 28.35 percent.
Therefore, the final rule is expected to affect a substantial number of small entities.
While the final rule is expected to affect a substantial number of small entities, the impact will not be economically significant. On this basis, the Secretary certifies that the adoption of this final rule will not have a significant economic impact on a substantial number of small entities as they are defined in the Regulatory Flexibility Act. Therefore, pursuant to 5
U.S.C. 605b, the initial and final regulatory flexibility analysis requirements of 5 U.S.C. 603 and 604 do not apply.
Unfunded Mandates The Unfunded Mandates Reform Act of 1995 requires, at 2 U.S.C. 1532, that agencies prepare an assessment of anticipated costs and benefits before issuing any rule that may result in the expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $100 million or more adjusted annually for inflation in any one year. This final rule will have no such effect on State, local, and tribal governments, or on the private sector.

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Paperwork Reduction Act The Paperwork Reduction Act of 1995
44 U.S.C. 35013521 requires that VA
consider the impact of paperwork and other information collection burdens imposed on the public. Under 44 U.S.C.
3507a, an agency may not collect or sponsor the collection of information, nor may it impose an information collection requirement unless it displays a currently valid OMB control number.50
This final rule contains provisions that constitute a revised collection of information under 38 CFR 36.4333, which is currently approved under OMB control number 29000515. This rule also contains provisions that constitute a new collection of information under 38 CFR 36.4336 and 38 CFR 36.4810, which will be added under OMB control number 29000515.
This rule also contains provisions that constitute a new collection of information under 38 CFR 36.4807, which will be added under existing OMB control number 29000021.
Finally, this rule contains provisions that constitute a new collection of information under 38 CFR 36.4803, 36.4805, 36.4806, and 36.4807.
As required by 44 U.S.C. 3507d, VA
has submitted to OMB for its review and approval the information collections both new and as amended that have not yet been approved. VA will publish in the Federal Register a notice when OMB approves these information collections. In the interim, VA has retained the placeholder control numbers that appeared in the proposed rule. If OMB does not approve the collections of information as requested, VA will immediately remove the provisions containing a collection of information or take such other action as is directed by the OMB.
Catalog of Federal Domestic Assistance The Catalog of Federal Domestic Assistance number and title for the program affected by this document is 64.114, Veterans HousingGuaranteed and Insured Loans.
Congressional Review Act The Office of Information and Regulatory Affairs has determined that this regulatory action is a major rule under Subtitle E of the Small Business Regulatory Enforcement Fairness Act of 1996 known as the Congressional Review Act, 5 U.S.C. 801808, because it is likely to result in an annual effect on the economy of $100 million or more. In accordance with 5 U.S.C.
801a1, VA will submit to the 50 See
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also 5 CFR 1320.8b3vi.

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