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  • Fannie and Freddie Extend Foreclosure Suspension for Puerto Rico and U.S. Virgin Islands

    Federal Issues

    On December 20, Fannie Mae, in Lender Letter LL-2017-11, and Freddie Mac, in Guide Bulletin 2017-29, extended the suspension of foreclosure sales through March 31, 2018 of mortgaged properties in FEMA-declared disaster areas in Puerto Rico and the U.S. Virgin Islands due to Hurricanes Irma and Maria. The extension does not apply to any other jurisdictions similarly designated.

    Find continuing InfoBytes coverage on Disaster Relief here.

    Federal Issues Disaster Relief Fannie Mae Freddie Mac Mortgages Foreclosure

  • Freddie Mac Issues New Guidance on Borrowers Qualifying Income

    Lending

    On December 14, Freddie Mac issued Guide Bulletin 2017-28, providing updates and reminders to sellers regarding income used for qualifying borrowers and other matters. The bulletin expands the options for sellers when qualifying a borrower with income that starts after the date of the mortgage note, including increasing the allowable gap from 60 days to 90 days between the note date and the commencement of income, allowing for a “no-cash-out” refinance as a potential transaction type, and permitting fully approved future salary increases from a current employer as income. It also relaxes certain requirements in the event the income commences prior to the delivery date. In addressing other topics, the bulletin allows for relief from the enforcement of selling representations and warranties for mortgages that are subject to a disaster-related forbearance plan. The relief extends through the later of the applicable payment history period end date or the date the mortgage transitions out of the disaster-related forbearance plan and is brought current. Among other issues, the updates and reminders cover the eligibility of Land Trust Mortgages and “Texas Equity Mortgages” for sale to Freddie Mac, and incorporation of the new 2018 FHFA base conforming and super conforming loan limits (previously covered by InfoBytes here).

    Lending Freddie Mac Mortgages Disaster Relief

  • Financial Regulators Issue Joint Supervisory Guidance for Disaster Areas; VA Announces Wildfire Relief

    Federal Issues

    On December 15, the FDIC, Fed, OCC, and NCUA issued Interagency Supervisory Examiner Guidance for Institutions Affect by a Major Disaster (Guidance). The Guidance provides information on assessing the financial condition of institutions affected by a “major disaster with individual assistance” as declared by the President. The Guidance also encourages institutions affected by such disasters to discuss relevant issues with their examiners and notes that the supervisory agencies will consider extending report filing deadlines and rescheduling exams. Additionally, the Guidance states that examiners should consider factors related to the disaster, such as asset losses and staffing issues, when assessing capital adequacy and management capability requirements. And when considering the supervisory response to an institution that receives a lower component or composite rating, the Guidance provides that examiners should recognize the extent to which any weaknesses are related to the major disaster.

    The Department of Veterans Affairs (VA), on December 12, announced additional special relief following the California wildfires in Circular 26-17-42. The Circular encourages VA loan holders to extend forbearance to borrowers affected by the wildfires and VA loan servicers to continue solicitation of the VA Disaster Loan Modification program (as previously covered by InfoBytes here). Additionally, for affected borrowers and loans, the Circular suggests that loan holders follow the 90-day foreclosure moratorium and that servicers consider waiving late charges and suspending credit reporting. The Circular is effective until January 1, 2019.

    Find continuing InfoBytes coverage on Disaster Relief here.

    Federal Issues Disaster Relief Department of Veterans Affairs FDIC OCC NCUA Federal Reserve Mortgages

  • OCC Allows Closure of Certain Financial Institutions Affected by Wildfires in California

    Federal Issues

    The OCC issued a proclamation on December 7 allowing national banks and federal savings associations affected by wildfires in California to close. The OCC encouraged the affected offices to make every effort to reopen as quickly as possible and to consult OCC Bulletin 2012-28 for guidance on certain actions the institutions should consider implementing for customers in affected disaster areas, previously covered by InfoBytes here

    Federal Issues OCC Disaster Relief Consumer Finance

  • VA Releases New Disaster Loan Modification Option

    Federal Issues

    On November 27, the Department of Veterans Affairs (VA) announced a new Disaster Loan Modification option via circular 26-17-39. In addition to the existing VA Disaster Loan Modification process, which allows servicers to extend permanent payment relief to disaster-impacted borrowers without a completed application, the VA will now allow servicers the option to waive the three-month trial period payment (TPP) requirement. According to the circular, servicers will be able to waive the TPP requirement to extend the term of the new loan by the number of months the borrower is delinquent, and must waive any accrued delinquent interest. Additionally, the loan must have been current at the time of the disaster and the VA must approve any term extensions greater than 12 months.

    Find more InfoBytes disaster relief coverage here.

    Federal Issues Disaster Relief Department of Veterans Affairs Mortgages Mortgage Modification

  • House Passes Flood Insurance Bill Reforming and Reauthorizing National Flood Insurance Program

    Federal Issues

    On November 14, the House voted 237-189 to pass legislation reforming and reauthorizing the National Flood Insurance Program (NFIP) for five years before it expires next month. As previously covered in InfoBytes, President Trump signed a three-month extension to the NFIP at the beginning of September in order to provide Congress additional time to establish a long-term financial solution for the program. The 21st Century Flood Reform Act (H.R. 2874) is designed to better facilitate compliance and clarify guidance for lenders and borrowers, and will, among other things, (i) change annual limits on premium increases for insurance obtained through the NFIP; (ii) require FEMA to consider the differences in flood risk between coastal and inland flood hazards when establishing premium rates; (iii) require FEMA to clearly communicate to policyholders the full flood risk to, and flood claims history of their property, and the effect of filing any additional claims; (iv) allow private insurers to continue selling policies on behalf of the NFIP, while also being allowed to sell their own private flood coverage; (v) revise federal flood mapping requirements, establish premium rates based on applicable flood insurance rate maps, and revise and clarify aspects of the appeals process; (vi) amend the Biggert-Waters Flood Insurance Reform Act of 2012 to clarify the time periods within which communities may consult with FEMA regarding mapping changes and submit data for consideration by the agency; (vii) revise the Flood Mitigation Assistance program to provide assistance for additional multiple loss properties; and (viii) amend the Flood Disaster Protection Act of 1973 to increase penalties against lenders and GSEs for violations of the mandatory purchase requirement from $2,000 to a maximum of $5,000 per violation.

    H.R. 2874 now heads to the Senate.

    Federal Issues U.S. House Flood Insurance National Flood Insurance Program Federal Legislation Disaster Relief Trump

  • Fannie and Freddie Introduce Extended Modifications for Disaster Relief

    Federal Issues

    On November 2, at the direction of the Federal Housing and Finance Authority (FHFA), Fannie Mae introduced in Lender Letter LL-2017-09 (Letter) a temporary forbearance mortgage loan modification (Extend Mod) for servicers with mortgage loans affected by the recent disasters. The Letter covers the requirements for an Extend Mod, including outlining loan eligibility criteria. Among other requirements, the loan must (i) be located in a FEMA-Declared Disaster Area; (ii) be less than 31 days delinquent when the disaster occurred and complete the forbearance plan while between 31 days delinquent and 360 days delinquent; (iii) not be delinquent after being previously modified with an Extend Mod from the same disaster; (iv) not be insured or guaranteed by a federal government agency; and (v) not be subject to a recourse or indemnification arrangement, another workout option, or a current repayment plan that is performing. The Letter also provides information on disbursing hazard loss draft proceeds, reimbursement for property inspections, and payment records for borrower-initiated termination of mortgage insurance.

    Under the same FHFA direction and in coordination with Fannie Mae, Freddie Mac issued Guide Bulletin 2017-25 announcing the servicing requirements for the Freddie Mac Extend Modification for Disaster Relief. Both Fannie and Freddie note the deadline for implementing the Extend Mod is February 1, 2018.

    Find more InfoBytes disaster relief coverage here.

    Federal Issues Disaster Relief Mortgages Mortgage Modification Mortgage Servicing FHFA Fannie Mae Freddie Mac

  • FinCEN Warns of Fraudulent Disaster Relief Schemes

    Financial Crimes

    On October 31, the Financial Crimes Enforcement Network (FinCEN) issued an advisory to financial institutions to warn of the potential for fraudulent activity related to recent disaster relief efforts. The advisory cautions financial institutions to pay particularly close attention to benefits fraud, charities fraud, and cyber-related fraud. Accordingly, it lists several red flags to assist in spotting these fraudulent schemes, including, among others:

    • The cashing or depositing of multiple emergency assistance checks by the same individual;
    • The payee organization having a name similar to, but not identical to, a well-known or reputable charity; or
    • The use of money transfer services to receive donations.

    The advisory also reminds financial institutions to file a Suspicious Activity Report (SAR) if there is reason to believe any fraudulent activity may be taking place.

    Find more InfoBytes disaster relief coverage here.

    Financial Crimes Disaster Relief FinCEN Fraud SARs

  • VA Extends Foreclosure Moratorium Following Hurricane Disasters; Federal Agencies Issue Appraisal Exceptions; Freddie Mac Extends Temporary Selling Requirements Related to Wildfire Areas

    Federal Issues

    Hurricane Relief. The Department of Veterans Affairs (VA) is extending the foreclosure moratorium on properties affected by the recent hurricanes. For disaster areas impacted by Harvey, Irma, and Maria, the VA is updating the original circulars to change the 90-day moratorium to 180 days (a complete list of change notices can be found here).

    On October 24, the FDIC, Federal Reserve, National Credit Union Administration, and the OCC issued a temporary exception to the Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA) appraisal requirements for areas affected by the recent hurricanes. More specifically, the FDIC's Financial institution Letter states that the agency will not require financial institutions to obtain appraisals for affected transactions, if (i) the properties involved are located in areas declared major disasters; (ii) there are binding commitments to fund the transactions within 36 months of the date the areas were declared major disasters; and (iii) the value of the real properties support the institutions' decisions to enter into the transactions.

    California Wildfire Relief. On October 25, Freddie Mac released Guide Bulletin 2017-24 extending the temporary selling requirements applied to hurricane disaster areas to eligible disaster areas impacted by the California wildfires. As previously covered by InfoBytes, Freddie Mac is requiring servicers to suspend foreclosure sales and eviction activities and has agreed to reimburse sellers for certain property inspections for property located in eligible disaster areas.

    Here is a complete list of InfoBytes disaster relief coverage.

    Federal Issues Disaster Relief Department of Veterans Affairs Freddie Mac Mortgages Lending FDIC FIRREA Mortgage Modification

  • FinCEN Encourages Communication from Financial Institutions Affected by the California Wildfires; FDIC Offers Regulatory Relief; FHA Extends Foreclosure Moratorium

    Federal Issues

    California Wildfire Relief. On October 19, FinCEN announced that financial institutions affected by the California wildfires should contact FinCEN and their functional regulator regarding any delays in their ability to file Bank Secrecy Act reports and to keep FinCEN and the regulators apprised of subsequent changes in their circumstances.

    On October 20, the FDIC announced steps to provide regulatory relief to financial institutions and facilitate recovery in areas of California affected by recent wildfires. The FDIC is encouraging banks to work constructively with borrowers affected by the wildfires, including extending repayment terms, restructuring existing loans, or easing terms for new loans. The FDIC noted that financial institutions may receive favorable Community Reinvestment Act (CRA) consideration in support of disaster recovery and will consider regulatory relief from certain filing and publishing requirements.

    Hurricane Relief. On October 20, HUD issued an additional 90-day extension of the initial disaster foreclosure moratorium for FHA mortgaged properties located in specified areas impacted by the recent hurricanes. The foreclosure moratorium applies to the initiation of foreclosures and foreclosures already in process. The new extended dates are as follows: February 21, 2018 for Hurricane Harvey, March 9, 2018 for Hurricane Irma, and March 19, 2018 for Hurricane Maria.

    As previously discussed in InfoBytes, several federal agencies have announced regulatory relief for victims of recent natural disasters.

    Federal Issues Disaster Relief FinCEN Bank Secrecy Act FDIC FHA Foreclosure Mortgages HUD Mortgage Modification

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