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On August 13, the Judicial Council of California voted to end two temporary emergency rules governing evictions and judicial foreclosures. The first rule prohibited the issuance of summons or entering of defaults in eviction actions unless the case involved public health and safety issues, and required that trials be set at least 60 days after a request for a trial. The second emergency rule stayed all pending judicial foreclosure actions other than those involving issues of public health and safety, tolled the statute of limitations on filing such actions, and extended the deadlines for election or exercise of rights relating to such actions. Pursuant to the vote, the rules end on September 1, 2020. The Judicial Council previously approved the temporary emergency rules staying eviction and foreclosure proceedings on April 6, 2020.
On August 31, the California governor signed AB 3088, which provides relief from eviction and foreclosure due to the economic impacts of Covid-19. Pursuant to AB 3088, a tenant may not be evicted before February 1, 2021 if a Covid-19-related hardship caused the tenant to miss a rent payment accruing between March 4 and August 31, 2020, if the tenant provides a declaration of hardship that complies with certain timelines set forth in the legislation. For hardships that accrue between September 1, 2020, and January 1, 2021, tenants must pay a portion of the rent due to avoid eviction. Among other things, the legislation also extends anti-foreclosure protections in the Homeowners Bill of Rights to small landlords.
On August 24, the Department of Veterans Affairs issued Circulars 26-20-30 and 26-20-29, which extend foreclosure and eviction relief for borrowers affected by Covid-19, respectively. Specifically, properties secured by VA-guaranteed loans are subject to a moratorium on foreclosure through December 31, 2020. The moratorium applies to the initiation of foreclosures and to the completion of foreclosures in process. The foreclosure circular is rescinded January 1, 2021. Similarly, properties secured by VA-guaranteed loans, including those loans currently in VA’s Real Estate Owned portfolio, are subject to a moratorium on evictions through December 31, 2020. The eviction moratorium circular is rescinded April 1, 2021.
On August 20, the Texas Office of the Consumer Credit Commissioner issued updated guidance, previously covered here, for regulated lenders navigating the Covid-19 crisis. The guidance: (1) encourages lenders to work with consumers, including by working out modifications to assist with payments, waiving fees and charges, suspending charged-off accounts, and suspending repossessions of collateral or foreclosure of real property, among other things; (2) reminds lenders of legal requirements for using electronic signatures; and (3) permits lenders to conduct regulated lending activity from unlicensed locations, subject to certain conditions. The guidance is in effect through September 30, 2020, unless withdrawn or revised.
On August 20, the New York governor issued Executive Order 202.57, which extends various earlier executive orders. Among others, the executive order extends through September 19, 2020, the directive in Executive Order 202.48 relating to the initiation of a proceeding or enforcement of an eviction of any commercial tenant for nonpayment of rent or a foreclosure of any commercial mortgage for nonpayment of such mortgage.
D.C. enacts law extending obligations for debt collection, credit reporting, mortgage servicing, and evictions during the Covid-19 pandemic
On August 19, the mayor of D.C. signed the Coronavirus Support Second Congressional Review Emergency Act of 2020. The act extends the provisions of D.C.’s prior Covid-19 relief act (previously covered here), which was set to expire after 90 days, until November 16. Among other things, the act includes consumer protection provisions, including provisions regarding debt collection and credit reporting. It also provides housing and tenant protections, including in the areas of mortgage relief, restrictions on evictions, and foreclosures.
On August 17, the Kansas governor issued Executive Order No. 20-61, which imposes restrictions on foreclosures and evictions. Banks and lending entities are prohibited from foreclosing on residential properties in Kansas where all defaults or violations of the mortgage are substantially caused by a financial hardship resulting from the Covid-19 pandemic, subject to certain exemptions. Landlords are similarly prohibited from evicting a residential tenant when all defaults or violations of the rental agreement are substantially caused by a financial hardship resulting from the pandemic. Banks, financial lending entities, or landlords initiating judicial foreclosure or eviction proceedings after August 17, 2020, bear the burden of pleading and proving that the foreclosure or eviction is not solely based on defaults or violations resulting from financial hardships resulting from the pandemic. The order does not apply to foreclosures initiated by the U.S. government.
On July 23, the CFPB announced that the U.S. District Court for the Central District of California entered a stipulated final judgment and order against a foreclosure relief services company, along with the company’s president/CEO (defendants), resolving CFPB allegations that the defendants engaged in deceptive and abusive acts and practices in connection with the marketing and sale of purported financial-advisory and mortgage-assistance-relief services to consumers. As previously covered by InfoBytes, in September 2019, the CFPB filed a complaint alleging that since 2014, the defendants violated the Consumer Financial Protection Act (CFPA) and Regulation O by, among other things, making deceptive and unsubstantiated representations about the efficacy and material aspects of its mortgage assistance relief services, as well as making misleading or false claims about the experience and qualifications of its employees. The Bureau also alleged the defendants’ misrepresentations constituted abusive acts and practices because consumers “generally did not understand and were not in a position to evaluate the accuracy of [the defendants’] marketing representations or the quality of the mortgage-assistance-relief services that [the defendants] sold.” Moreover, the Bureau claimed the defendants further violated Regulation O by charging consumers advance fees before rendering services.
The stipulated final judgment suspends $3 million in consumer redress based upon the defendants’ sworn financial statements and disclosures of material assets that detailed their inability to pay, but orders the defendants to pay $40,000 in civil money penalties. Additionally, the judgment permanently restrains the defendants from offering mortgage relief and financial advisory services and subjects the defendants to certain reporting and recordkeeping requirements.
On July 21, the Massachusetts governor extended a moratorium on evictions and foreclosures for an additional 60 days, until October 17, 2020. The moratorium was established through legislation enacted in April and previously covered here. The moratorium applies to most residential and small business commercial evictions, as well as residential foreclosures. The statement announcing the extension also notes the recent launch of a $20 million, statewide fund to assist low-income households and support landlords. An additional $18 million is available through the Residential Assistance for Families in Transition homeless prevention program for rent or mortgage payments.
On July 17, the Texas Office of the Consumer Credit Commissioner updated its Regulated Lender Advisory Bulletin on coronavirus emergency measures, previously covered here. The guidance: (1) encourages lenders to work with consumers, including by working out modifications to assist with payments, waiving fees and charges, suspending charged-off accounts, and suspending repossessions of collateral or foreclosures of real property, among other things; (2) reminds lenders of legal requirements for using electronic signatures; and (3) continues to permit lenders to conduct regulated lending activity from unlicensed locations, subject to certain conditions. The guidance is in effect through August 31, 2020, unless withdrawn or revised.
- Daniel P. Stipano to discuss "High standards: Best practices for banking marijuana-related businesses" at the ACAMS AML & Anti-Financial Crime Conference
- Daniel P. Stipano to discuss "Wait wait ... do tell me! Where the panelists answer to you" at the ACAMS AML & Anti-Financial Crime Conference
- Matthew P. Previn and Walter E. Zalenski to discuss "Is valid when made ... valid?" at the Women in Housing & Finance Partner Series webinar
- Warren W. Traiger and Caroline K. Eisner to discuss "CRA modernization and the OCC final rule" at CBA Live
- Daniel R. Alonso to discuss "Transnational corruption: A chat with former U.S. federal prosecutors in New York" at Marval Live Talks
- Sherry-Maria Safchuk and Lauren Frank to discuss "New CFPB interpretation on UDAAP" at a California Mortgage Bankers Association Mortgage Quality and Compliance Committee webinar
- Thomas A. Sporkin to discuss "Managing internal investigations and advanced government defense" at the Securities Enforcement Forum
- H Joshua Kotin to discuss "Mortgage servicing in a recession: Early intervention, loss mitigation and more" at the NAFCU Virtual Regulatory Compliance Seminar
- Daniel R. Alonso to discuss "Independent monitoring in the United States" at the World Compliance Association Peru Chapter IV International Conference on Compliance and the Fight Against Corruption
- Jonice Gray Tucker to discuss "The future of fair lending" at the Mortgage Bankers Association Regulatory Compliance Conference
- Michelle L. Rogers to discuss "Major litigation" at the Mortgage Bankers Association Regulatory Compliance Conference
- Kathryn L. Ryan to discuss "Pandemic fallout – Navigating practical operational challenges" at the Mortgage Bankers Association Regulatory Compliance Conference
- Jonice Gray Tucker to discuss "Consumer financial services" at the Practising Law Institute Banking Law Institute