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FDIC warns of scams
On March 18, the FDIC issued a press release reminding Americans that FDIC-insured banks “remain the safest place to keep their money.” The FDIC also warned of scams where imposters are pretending to be agency representatives to perpetrate fraudulent schemes.
FinCEN issues guidance on BSA reports
On March 16, the Financial Crimes Enforcement Network (FinCEN) issued a release reminding financial institutions affected by Covid-19 to contact the agency and their functional regulator as soon as practicable if they anticipate delays in filing their Bank Secrecy Act reports. Financial institutions were also advised to be on alert for malicious or fraudulent transactions connected to Covid-19, particularly with respect to emerging trends such as imposter scams, investment scams, product scams, and insider trading. Financial institutions were also directed to review FinCEN advisory FIN-2017-A007—which discusses other relevant typologies, including benefits fraud, charities fraud, and cyber-related fraud—and encouraged to review guidance from their functional regulators as available.
DOJ adopts changes to merger investigation process
On March 17, the DOJ announced it would adopt a series of temporary changes to its civil merger investigation processes, which will remain in place during the pendency of Covid-19. For example, for mergers currently pending or that may be proposed, the Antitrust Division is requesting from merging parties an additional 30 days to timing agreements to complete its review of transactions after the parties have complied with document requests. Additionally, all scheduled depositions will be temporarily postponed and will be rescheduled using secure videoconferencing capabilities.
AARMR urges waiving of certain fees and charges
On March 17, the American Association of Residential Mortgage Regulators (AARMR) issued a statement encouraging mortgage lenders and servicers to take steps to “mitigate the impact to consumers of actions taken in response to Covid-19.” For lenders, the AARMR suggests steps such as waiving rate lock extension fees if an application is delayed for reasons beyond an applicant’s control, or refraining from closing an application due to incompleteness if an applicant is having difficulty gathering required documents. For servicers, the AARMR suggested waiving certain late charges (if permitted), offering forbearance plans or other deferment options, and generally ensuring that all staff are aware of available options and are proactive in assisting borrowers with potential delinquent payments. The AARMR also encourages member agencies to consider the impact of Covid-19 in their dealings with brokers, lenders, servicers, and MLOs.
HUD implements foreclosure and eviction moratorium
On March 18, HUD announced that it would implement an immediate foreclosure and eviction moratorium for single family homeowners with FHA-insured mortgages for the next 60 days and issued Mortgagee Letter 2020-04. The guidance applies to homeowners with FHA-insured Title II Single Family forward and Home Equity Conversion (reverse) Mortgages, and directs mortgage servicers to: (i) halt all new foreclosure actions and suspend all foreclosure actions currently in process; and (ii) cease all evictions of persons from FHA-insured single-family properties.
FHFA directs Fannie and Freddie to suspend foreclosures and evictions due to Covid-19
On March 18, the FHFA announced that it has directed Fannie Mae and Freddie Mac to suspend foreclosures and evictions for at least 60 days due to the Covid-19 national emergency. The foreclosure and eviction suspension applies to homeowners with an Enterprise-backed single-family mortgage.
Fannie Mae addresses Covid-19 impact
On March 16, Fannie Mae (FNMA) published a statement on its website addressing its internal business continuity and the procedures it has established to deal with the effects of Covid-19. The statement mentions that FNMA maintains an infectious disease plan and a crisis management team. It also provides assurances that FNMA is observing business continuity plans and following guidance from the Centers for Disease Control and Prevention, as well as taking measures to protect employees, including through remote work and social distancing. Additionally, FNMA sets forth a number of procedures established to deal with the impacts of Covid-19, including “[c]ommunicating with Single-Family lender customers about existing policies that outline options for potentially impacted borrowers.”
VA issues Covid-19 guidance
On March 16, the Department of Veterans Affairs (VA) released Circular 26-20-7, “Special Relief for those Potentially Impacted by COVID-19,” which provides guidance for veterans, lenders, servicers, and appraisers on the VA Home Loan Program in connection with the spread of Covid-19. Veterans are encouraged to call ahead for any in-person appointments with VA staff or with a lender, appraiser, or servicer regarding a home loan if the veteran may present a Covid-19 transmission risk. Additionally, the VA will permit lenders and servicers to offer relief to veterans impacted by the virus through (i) forbearance on guaranteed loan payments; (ii) waiver of late charges; and (iii) suspending credit bureau reporting. Appraisers are encouraged to continue business in accordance with Chapter 10 of the M26-7 Lender’s Handbook. As with the guidance for veterans, appraisers are also encouraged to determine if they present a Covid-19 transmission risk prior to face-to-face appointments, and then, as appropriate, to reschedule appointments or transfer the assignment to another appraiser. The announcement also urges appraisers to follow the Centers for Disease Control and Prevention’s recommendations to prevent the spread of Covid-19 when performing appraisals. The circular notes that the VA “is continuing with normal program operations” and will update information on the VA Home Loan Program as it is available.
FINRA posts FAQs related to regulatory relief during the Covid-19 pandemic
Since March 18, FINRA has been maintaining and updating FAQs related to regulatory relief due to the Covid-19 pandemic. The FAQs discuss questions concerning, among other things, advertising regulation, anti-money laundering, best execution for buying and selling securities, broker-dealer registration, business continuity planning, and filing extensions for certain reports.
GSEs provide Covid-19 guidance
FHFA and Freddie Mac have issued reminders that borrowers impacted by Covid-19 meet forbearance hardship requirements for Fannie Mae and Freddie Mac loans, and servicers must work with impacted borrowers unable to make mortgage payments and be responsive to potential requests for assistance.
Freddie Mac also reiterated a requirement for sellers/servicers to maintain a business continuity plan as set forth in Section 1302.3 of the Freddie Mac Guide.