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  • Fannie Mae updates appraisal guidance on impact of Covid-19

    Federal Issues

    On April 14, Fannie Mae updated certain elements of Lender Letter 2020-04 regarding the impact of Covid-19 on appraisals. The letter applies to all Fannie Mae Single-Family Sellers. Fannie Mae has updated its guidance regarding flexibilities for condominium project reviews, virtual inspections for appraisals and renovation loans, new construction loans, HomeStyle renovation loans in forbearance, use of lender variances and temporary appraisal flexibilities, and additional form instructions for appraisals.

    Federal Issues Covid-19 Fannie Mae Mortgages Forbearance CARES Act

  • FTC provides advice to mortgage borrowers impacted by Covid-19

    Federal Issues

    On April 14, the FTC released guidance entitled “Coronavirus and your mortgage” to provide financial information to consumers affected by the Covid-19 pandemic. The guidance points out that many mortgage borrowers facing Covid-19-related financial hardships may benefit from CARES Act protections. Starting on March 18, borrowers with federally-backed mortgages cannot have foreclosure proceedings instituted against them for 60 days. The CARES Act also provides borrowers the right to request forbearance for up to 180 days in order to temporarily freeze or lower mortgage payments. After the forbearance period ends, borrowers may request an additional forbearance for up to 180 days if they are still having trouble making mortgage payments as a result Covid-19. The FTC’s guidance provides contact information for the GSEs so borrowers can determine if their mortgages are federally backed. In addition, the guidance encourages all borrowers to contact their servicers for available payment options and assistance. The FTC suggests that approved housing counselors may also help, and can be found on the Department of Housing and Urban Development’s website here, while the Homeownership Preservation Foundation may be able to assist borrowers in making payment arrangements with their mortgage servicers. (See website here.) The FTC advises borrowers to check state government websites for state-specific information, though the agency warns borrowers to be wary of mortgage relief scams. Finally, the guidance reminds borrowers never to pay up-front for help with their mortgage payments and provides additional links for more detailed information.

    Federal Issues Agency Rule-Making & Guidance FTC Forbearance HUD Mortgages CARES Act Covid-19

  • HUD announces multifamily mortgage payment relief

    Federal Issues

    On April 13, HUD announced new measures for FHA-approved multifamily mortgagees regarding the implementation of CARES Act forbearance. The guidance stipulates that servicers must grant multifamily borrowers who experience financial hardships due to Covid-19 and request assistance up to 90 days of forbearance, and may grant this forbearance without receiving direct approval from HUD provided they follow guidance outlined in Mortgagee Letter 2020-09 (covered by InfoBytes here). As required by the CARES Act, all owners and agents of FHA-insured multifamily properties and properties participating in HUD multifamily assisted housing programs must also cease all evictions of tenants for non-payment of rent for 120 days. The guidance also outlines the standard multifamily forbearance protocol, which is intended to streamline processing for borrowers, servicers, and lenders. The protocol stipulates that HUD is (i) “allowing servicers to grant, without HUD approval, up to 30 days of forbearance for borrowers experiencing a financial hardship due to COVID-19 if the borrower was current on their mortgage payments as of February 1, 2020”; (ii) “allowing automatic forbearance extensions from servicers to borrowers for up to two additional 30-day periods, without HUD approval”; and (iii) “encouraging borrowers to enter into repayment plans with renters (residential and commercial) that experience an income reduction or temporary loss of household income but are able to make up the difference over time, without HUD approval.”

    Federal Issues HUD Mortgages Forbearance Consumer Finance CARES Act Covid-19

  • States ask Treasury to exempt stimulus payments from garnishment and urge CFPB to “vigorously enforce” FCRA

    Federal Issues

    On April 13, a coalition of state attorneys general and the Hawaii Office of Consumer Protection (states) sent a letter to Treasury Secretary Steven T. Mnuchin, calling for immediate action to ensure that stimulus checks issued under the CARES Act to consumers affected by the Covid-19 pandemic are not subject to garnishment by creditors and debt collectors. While the CARES Act does not “explicitly designate these emergency stimulus payments as exempt from garnishment,” the states claim that a “built-in mechanism” contained within a provision of the CARES Act can rectify the legislative oversight. Specifically, the states point to Section 2201(h), which “authoriz[es] Treasury to issue ‘regulations or other guidance as may be necessary to carry out the purposes of this section,’” and ask Treasury to immediately designate the stimulus checks as “‘benefit payments’ exempt from garnishment.”

    The same day, another coalition of state attorneys general sent a letter to CFPB Director Kathy Kraninger urging the Bureau to rescind an April 1 policy statement directed at consumer reporting agencies (CRAs) and furnishers (covered by InfoBytes here) that stated the Bureau will take a “flexible supervisory and enforcement approach during this pandemic regarding compliance with the Fair Credit Reporting Act [(FCRA)] and Regulation V.” According to the states, the policy statement suggests that the Bureau does not plan on enforcing the CARES Act amendment to the FCRA, which requires lenders to report as current any loans subject to Covid-19 forbearance or other accommodation. The Bureau’s decision, the states contend, may discourage consumers from taking advantage of offered forbearances and other accommodations. The states also argue that allowing CRAs to take longer than the FCRA-prescribed 30 days to investigate consumer disputes puts consumers at risk. The states stress that the recent increase in Covid-19 scams has heightened the need for the Bureau to vigorously enforce the FCRA, and that, moreover, the thousands of complaints received by the states, FBI, FTC, and DOJ concerning phishing and other scams designed to gather consumers’ financial information have highlighted identity theft risks. The states emphasize “that even if the CFPB refuses to act. . .we will not hesitate to enforce the FCRA’s deadlines against companies that fail to comply with the law.”

    Federal Issues CFPB Department of Treasury Forbearance Consumer Finance CARES Act State Attorney General FCRA Regulation V Debt Collection Identity Theft Covid-19 Credit Reporting Agency

  • HUD issues mortgagee letter on implementation of CARES Act forbearance

    Federal Issues

    On April 10, HUD issued Mortgagee Letter 2020-09 to FHA Approved Multifamily Mortgagees regarding implementation of CARES Act forbearance. The letter includes guidelines on CARES Act forbearance for FHA insured mortgages, 542(b) and (c) risk share mortgages, and HUD-held loans. Among other things, the guidance notes that HUD will not participate in the negotiation of forbearance repayment between multifamily borrowers and lenders. However, if the forbearance agreement contains actions requiring HUD approval, a copy of the forbearance agreement must be provided to HUD.

    The letter also provides guidance on continuing program obligations and the post-forbearance period. Mortgagees are reminded that during the forbearance period, all other material terms and conditions of the HUD Loan Documents and the FHA Regulatory Agreement remain in effect. The letter notes that Lenders should use Multifamily Delinquency and Default Reporting System to record post-forbearance delinquencies and defaults. Finally, the letter notes that HUD has reviewed the MBA’s sample forbearance agreement drafted in April 2020, and stated that forbearance agreements that follow this format would not be submitted to HUD prior to execution and implementation by the lender and borrower. HUD is also developing its own form for lenders and borrowers to use.

    Federal Issues Covid-19 HUD Mortgages Forbearance FHA CARES Act

  • Department of Veterans Affairs issues Circular on CARES Act requirements

    Federal Issues

    On April 9, the Department of Veterans Affairs issued Circular 26-20-12 regarding extending relief for VA loans pursuant to the Coronavirus Aid, Relief, and Economic Safety Act (CARES Act). The circular provides information regarding borrower eligibility, offering borrowers forbearance, the accrual of fees, penalties, and interest, credit reporting of a borrower’s account, exiting forbearance, and the foreclosure moratorium. The circular is effective until April 1, 2021, and preempts section 3 of Circular 26-20-7 (“Special Relief for Those Potentially Impacted by COVID-19”).

    Federal Issues Covid-19 Department of Veterans Affairs Foreclosure Mortgages Forbearance CARES Act

  • CFPB updates Covid-19 student loan debt relief guidance for borrowers

    Federal Issues

    On April 9, the CFPB released updated guidance for student loan borrowers during the Covid-19 pandemic. As previously covered by InfoBytes, the Bureau first released student loan borrower information on March 27, which covered debt relief provided by the CARES Act, including the automatic freeze on student loan payments until September 30 for those with federally held loans. Servicers will send required notices detailing the payment freeze to borrowers by the middle of April. The guidance notes that some federal student loans—including some Federal Family Education Loans—may be held by commercial lenders. These loans and other privately held loans do not qualify for automatic suspension of payments, and the Bureau encourages borrowers to contact their servicers for debt relief options such as deferment or forbearance if borrowers have difficulty making payments at this time. Borrowers with Perkins loans may also request loan forbearance from the borrowers’ institution for up to three months without submitting documentation.

    Federal Issues CFPB Agency Rule-Making & Guidance Student Lending Department of Education Debt Relief CARES Act Consumer Finance Covid-19 Forbearance

  • Freddie Mac updates Covid-19 servicing guidance

    Federal Issues

    On April 8, Freddie Mac updated previous guidance to servicers relating to working with borrowers impacted by Covid-19. Among other things, the guidance: (i) requires servicers to report activity to the credit bureaus for borrowers impacted by Covid-19; (ii) suspends all foreclosure actions, including initiation of the foreclosure process; (iii) waives milestone timelines for filing motions for relief from automatic stay in bankruptcy cases; (iv) waives requirements that forbearance cannot extend a delinquency beyond 12 months; (v) confirms that servicers must send the borrower the forbearance plan agreement to reflect the terms of the Covid-19 forbearance; and (vi) requires servicers to make good faith efforts at quality right party contact to evaluate the borrower for a forbearance plan. The guidance also clarifies that servicers should not submit disaster reporting codes for Covid-19 related issues, stating that Freddie Mac will continue to address the Covid-19 pandemic as unique and distinct from other “eligible disaster” provisions in the Freddie Mac guides.

    Federal Issues Covid-19 Freddie Mac Forbearance CARES Act Foreclosure

  • Fannie Mae updates Covid-19 servicing guidance

    Federal Issues

    On April 8, Fannie Mae updated its guidance to single-family servicers regarding the impact of Covid-19 on servicing.  In particular, the guidance revises prior guidance on offering forbearance plans to comply with the recent enactment of the federal CARES Act.  Among the updates to the servicer guidance are: (i) clarifying responsibilities relating to achieving “quality right party contact” for borrowers in a forbearance plan; (ii) providing a specific delinquency code for use in reporting to Fannie Mae; (iii) granting flexibility for inspections; (iv) extending deadlines for submission of financial statements and Form 582 to April 30; (v) clarifying forbearance plan terms; (vi) eliminating the requirement that the servicer determine occupancy status prior to evaluating a borrower for a workout option; (vii) requiring that the servicer comply with FCRA and report borrowers affected by Covid-19; and (viii) requiring servicers to suspend all foreclosure related activities to comply with the CARES Act and suspend filing motions for relief in bankruptcy cases. 

    Federal Issues Covid-19 Fannie Mae Forbearance FCRA Foreclosure

  • Fannie Mae provides Covid-19 forbearance guidance for multifamily lenders and servicers

    Federal Issues

    On April 7, Fannie Mae issued a letter providing Covid-19 forbearance process guidance for multifamily lenders and servicers.  In particular, multifamily lenders and servicers are required to use the Multifamily Asset Management Portal (MAMP) to submit delegated forbearance notifications and supporting documentation, and complete and submit reporting on delegated forbearance notifications using the Delegated Forbearance Tracking spreadsheet on the first business day of each week.  Non-delegated forbearance requests must also be submitted through MAMP. 

    Federal Issues Covid-19 Fannie Mae Forbearance Mortgages

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