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Agencies offer relief following Hurricane Florence
On September 19, the SEC announced regulatory relief to publicly traded companies, investment companies, accountants, transfer agents, municipal advisors, and others impacted by Hurricane Florence. The SEC order conditionally exempts affected persons not able to meet a filing deadline due to the weather event and its aftermath from certain reporting and filing requirements of the federal securities laws, for the period from and including September 14 to October 26, with all reports, schedules or forms to be filed on or before October 29. Additionally, the SEC adopted interim final temporary rules that extend the filing deadlines for certain reports and forms that companies must file under Regulation Crowdfunding and Regulation A.
On September 18, the Department of Veterans Affairs issued Circular 26-18-18, requesting relief for homeowners impacted by Hurricane Florence. Among other things, the Circular encourages loan holders to (i) extend forbearance to borrowers in distress because of the storms; (ii) establish a 90-day moratorium from the date of the disaster on initiating new foreclosures on affected loans; and (iii) waive late charges on affected loans. The Circular is effective until October 1, 2019.
Find continuing InfoBytes coverage on disaster relief here.
Agencies issue guidance to institutions affected by storms in Gulf Coast and Hurricane Lane in Hawaii
On September 5, the OCC issued a proclamation permitting OCC-regulated institutions to close their offices affected by Tropical Storm Gordon in the Gulf Coast Region. OCC Bulletin 2012-28 provides further guidance on natural disasters and other emergency conditions.
On August 30, the Department of Veterans Affairs issued Circular 26-18-17, requesting relief for homeowners impacted by Hurricane Lane in Hawaii. Among other things, the Circular (i) encourages loan holders to extend forbearance to borrowers in distress because of the storms; (ii) requests that loan holders establish a 90-day moratorium on initiating new foreclosures on loans affected by the major disaster; and (iii) waives late charges on affected loans. The Circular is effective until October 1, 2019.
Find continuing InfoBytes coverage on disaster relief here.
OCC provides guidance to institutions affected by Hurricane Lane; Fannie Mae, Freddie Mac offer forbearance relief to impacted homeowners
On August 24, the OCC issued a proclamation permitting OCC-regulated institutions to close their offices affected by Hurricane Lane in Hawaii. OCC Bulletin 2012-28 provides further guidance on natural disasters and other emergency conditions.
On August 23, Fannie Mae also reminded servicers of mortgage assistance options for homeowners impacted by the hurricane. Specifically, qualifying homeowners are eligible to stop making mortgage payments for up to 12 months, during which time late fees will not be incurred nor delinquencies reported to the credit bureaus. Additionally, servicers may immediately suspend or reduce mortgage payments for up to 90 days without any contact with homeowners believed to have been affected by the hurricane. Further, foreclosures and other legal proceedings must be suspended for impacted homeowners.
The same day, Freddie Mac confirmed its disaster relief options are available to borrowers with homes or places of employment impacted by the hurricane, emphasizing that borrowers in FEMA-declared disaster areas have access to federal individual assistance programs. The relief suspends foreclosures by providing forbearance for up to 12 months. Penalties and late fees will also be waived, and servicers should not report forbearance or delinquencies caused by the disaster to credit bureaus. Moreover, Freddie Mac also reminded servicers to consider borrowers who live and work in affected areas but have homes outside the eligible disaster area for standard relief policies.
Find continuing InfoBytes coverage on disaster relief here.
Fannie Mae, Freddie Mac issue forbearance relief to homeowners affected by California wildfires
On August 8, Freddie Mac extended its disaster relief options to homeowners affected by ongoing California wildfires who have access to federal individual assistance programs in FEMA-declared disaster areas. The relief suspends foreclosures by providing forbearance for up to 12 months. Penalties and late fees will also be waived. Freddie Mac also reminded servicers to consider borrowers who work in eligible disaster areas but have homes outside the affected area for standard relief policies. Moreover, servicers may leverage Freddie Mac forbearance programs to provide immediate mortgage relief to those affected by the wildfires in areas where FEMA has not made individual assistance available.
On August 7, Fannie Mae issued a notice to mortgage servicers reminding them that homeowners impacted by the California wildfires are eligible to stop making mortgage payments for up to 12 months, during which time late fees will not be incurred nor delinquencies reported to the credit bureaus. Furthermore, servicers may immediately suspend or reduce mortgage payments for up to 90 days without any contact with homeowners believed to have been affected by the wildfires. Additionally, foreclosures and other legal proceedings must be suspended for impacted homeowners.
Find continuing InfoBytes coverage on disaster relief here.
Fannie Mae and Freddie Mac issue disaster relief policy reminders and updates
On July 18, Fannie Mae, in Lender Letter LL-2018-04, and Freddie Mac, in an industry letter released the same day, reminded servicers of requirements that continue to be in effect for servicing mortgages impacted by eligible disasters. Specifically, Fannie Mae provides information on (i) reimbursements related to insured loss repair inspection costs; (ii) disaster-impacted inspections; (iii) the Extend Modification for Disaster Relief policy—developed in conjunction with Freddie Mac for post-disaster forbearance mortgage loan modifications; and (iv) the disbursement of hazard loss draft proceeds. Freddie Mac also reminds servicers of property inspection reimbursement requirements and changes to insurance loss settlement distributions.
Find continuing InfoBytes coverage on disaster relief here.
Fannie Mae updates borrower-initiated mortgage insurance termination requirements
On July 18, Fannie Mae released Lender Letter LL-2018-03 (Letter) to provide updates to requirements for single-family servicers related to borrower-initiated conventional mortgage insurance (MI) termination requests. The Letter covers requirements for borrower-initiated MI terminations and outlines various processes for verifying current property values. Among other things, the Letter also incorporates into the Servicing Guide changes previously announced in LL-2017-09 (see previous InfoBytes coverage here), which allows for temporary forbearance mortgage loan modification for servicers with mortgage loans affected by recent disasters. Fannie Mae encourages servicers to implement the new requirements on January 1, 2019, but will not require them to do so until March 1, 2019, unless otherwise noted.
11th Circuit: No FCRA violation for reporting as delinquent during forbearance plan
On June 27, the U.S. Court of Appeals for the 11th Circuit affirmed summary judgment for a mortgage servicer, concluding that reporting the consumer as delinquent to credit bureaus during a forbearance plan is neither inaccurate nor materially misleading under the Fair Credit Reporting Act (FCRA). According to the opinion, a borrower enrolled in a forbearance plan with her mortgage servicer, which allowed for a “monthly forbearance plan payment” of $25 while the remaining payment balance accrued and became due at the end of the plan. Before the borrower agreed to the plan, a representative for the servicer explained to the borrower that because she was not paying the actual contractual payment under the note, the monthly payments would still be considered late. The mortgage servicer reported the borrower past due for the duration of the plan, and the borrower subsequently filed suit alleging violations of the FCRA. In affirming the lower court’s decision, the appeals court found that while the borrower made timely payments under the forbearance plan, the payments were not the ones she was contractually bound to make under the mortgage note. Additionally, the appeals court found that the borrower did not establish that the forbearance plan legally modified the original note and, therefore, the information the servicer reported to the credit bureaus was not inaccurate and was also not materially misleading “particularly in light of [the servicer’s] additional affirmative statement that [the borrower] was paying under a partial payment agreement.”
Agencies issue disaster relief guidance for volcanic activity in Hawaii and severe storm in Maine
On June 19, the FDIC issued Financial Institution Letter FIL-33-2018 to provide regulatory relief to financial institutions and facilitate recovery in areas of Hawaii affected by volcanic eruption and earthquakes. The FDIC is encouraging institutions to consider, among other things, extending repayment terms and restructuring existing loans that may be affected by the natural disasters. Additionally, the FDIC notes that institutions may receive favorable Community Reinvestment Act (CRA) consideration for certain development loans, investments, and services in support of disaster recovery.
On June 14, the Department of Veterans Affairs issued Circular 26-18-16, requesting relief for veterans impacted by Maine’s severe storm and flooding. Among other things, the Circular (i) encourages loan holders to extend forbearance to borrowers in distress because of the storms; (ii) requests that loan holders establish a 90-day moratorium on initiating new foreclosures on loans affected by the major disaster; and (iii) waives late charges on affected loans. The Circular is effective until July 1, 2019.
Find more InfoBytes disaster relief coverage here.
Freddie Mac and Fannie Mae release updates to servicing guides
On June 13, Freddie Mac released Guide Bulletin 2018-9, which among other things, updates servicer requirements for short-term, long-term, and unemployment forbearance plans and consolidates the offerings into a single plan. Effective December 1, the streamlined plan will allow servicers to approve forbearance plans lasting up to six months without requiring eligible borrowers to submit a Borrower Response Package. Servicers may also offer consecutive forbearance plans that do not exceed 12 months in total to qualifying borrowers. Separately, the Bulletin includes the introduction of Freddie Mac’s NextJob re-employment services company designed to serve high-needs areas and provide job search skills and training for unemployed or underemployed borrowers who have requested loss mitigation assistance.
On the same day, Fannie Mae updated its Servicing Guide to consolidate and simplify its forbearance policies into a single plan, and encouraged servicers to implement the changes immediately, but no later than December 1. Fannie Mae clarified, however, that forbearance plans “entered into prior to the servicer’s implementation would adhere to existing policy until the expiration of such forbearance plan.” Additional changes to the Servicing Guide include: (i) clarifications to the escrow advances reimbursement policy for real estate taxes and flood/property insurance premiums; and (ii) updates to be implemented by August 1 for when servicers are required to notify Fannie Mae that a mortgage loan has been placed under military indulgence.
Federal agencies issue disaster relief guidance for North Carolina, Indiana, and Hawaii
Department of Veterans Affairs (VA)
On May 16, the Department of Veterans affairs released Circular 26-18-10, requesting relief for veterans impacted by Hawaii’s volcanic eruptions and earthquakes. Among other things, the Circular (i) encourages loan holders to extend forbearance to borrowers in distress because of the storms; (ii) requests that loan holders establish a 90-day moratorium on initiating new foreclosures on loans affected by the major disaster; and (iii) waives late charges on affected loans. Previously on May 14, the VA released Circular 26-18-08 and Circular 26-18-09, which provide for similar relief in areas affected by severe storms and flooding in Hawaii and North Carolina.
FDIC
On May 16, the FDIC issued FIL-28-2018 to provide regulatory relief to financial institutions and facilitate recovery in areas of Indiana affected by severe storms and flooding from February 14 through March 4. The FDIC is encouraging institutions to consider, among other things, extending repayment terms and restructuring existing loans that may be affected by the natural disasters. Additionally, the FDIC notes that institutions may receive favorable Community Reinvestment Act (CRA) consideration for certain development loans, investments, and services in support of disaster recovery. The FDIC also issued FIL-29-2018, which provides similar guidance for financial institutions for areas of North Carolina affected by tornadoes and severe storms on April 15.
Find more InfoBytes disaster relief coverage here.