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HUD to provide COVID-19 mortgage relief for 60 days

HUD Secretary Carson has authorized the Federal Housing Administration to implement an immediate foreclosure and eviction moratorium for single family homeowners with FHA-insured mortgages for the next 60 days. These moratoriums are part of the continued effort by the administration to address impacts to the financial well-being of America’s individuals, families, and businesses caused by Coronavirus (COVID-19). CFPB Director Kraninger issued a statement supporting the action.


Mortgage performance improves slightly

The OCC has reported a slight improvement in first-lien mortgage performance since the last quarter of calendar year 2019.

The OCC Mortgage Metrics Report, Fourth Quarter 2019 showed 96.5 percent of mortgages included in the report were current and performing at the end of the quarter, compared to 95.8 percent a year earlier. The report also showed that servicers initiated 22,248 new foreclosures during the fourth quarter of 2019­, a 3.5 percent increase from the previous quarter and a 24.6 percent decrease from a year prior. Servicers completed 13,147 mortgage modifications in the fourth quarter of 2019, and 78.2 percent of the modifications reduced borrowers’ monthly payments.


FHFA suspends foreclosures and evictions

The Federal Housing Finance Agency reported Wednesday that, to help borrowers who are at risk of losing their home, the agency has directed Fannie Mae and Freddie Mac to suspend foreclosures and evictions for at least 60 days due to the coronavirus national emergency. The foreclosure and eviction suspension applies to homeowners with a Fannie Mae- or Freddie Mac-backed single-family mortgage.

Earlier this month, FHFA announced that the Enterprises would provide payment forbearance to borrowers impacted by the coronavirus. Forbearance allows for a mortgage payment to be suspended for up to 12 months due to hardship caused by the coronavirus.


New Primary Dealer Credit Facility from Fed

The Federal Reserve Board announced yesterday that, to support the credit needs of American households and businesses, the Fed will establish a Primary Dealer Credit Facility, or PDCF. The facility will allow primary dealers of the New York Fed to support smooth market functioning and facilitate the availability of credit to businesses and households. The PDCF will offer overnight and term funding with maturities up to 90 days and will be available on March 20, 2020. It will be in place for at least six months and may be extended as conditions warrant. Credit extended to primary dealers under this facility may be collateralized by a broad range of investment grade debt securities, including commercial paper and municipal bonds, and a broad range of equity securities. The interest rate charged will be the primary credit rate, or discount rate, at the Federal Reserve Bank of New York.


Fed to create Commercial Paper Funding Facility

The Federal Reserve Board has announced that it will establish a Commercial Paper Funding Facility (CPFF) to support the flow of credit to households and businesses. Commercial paper markets directly finance a wide range of economic activity, supplying credit and funding for auto loans and mortgages as well as liquidity to meet the operational needs of a range of companies.

Treasury Secretary Mnuchin released a statement in support of the facility. He said the CPFF will support the smooth functioning of the financial markets and that Treasury will provide $10 billion of capital to the CPFF from the Exchange Stabilization Fund.


Regulator actions to support household lending

The Fed, FDIC, and OCC have issued a joint press release announcing the following two actions to support the U.S. economy and allow banks to continue lending to households and businesses:

  • A statement encouraging banks to use their resources to support households and businesses; and
  • A technical change to phase in gradually, as intended, the automatic distribution restrictions if a firm's capital levels decline.

The technical rule will be effective upon publication. Issued as an interim final rule, it will have a 45-day comment period. UPDATE: Published at 85 FR 15909 on 3/20/20, with a comment period ending 5/4/20.


Discount rate decreases

The Federal Reserve Board has approved action on Sunday by the Board of Directors of the Federal Reserve Bank of Kansas City and actions on Monday by the Boards of Directors of the Federal Reserve Banks of Boston, Philadelphia, Cleveland, Richmond, Atlanta, Chicago, St. Louis, Dallas, and San Francisco, decreasing the discount rate (the primary credit rate) at the Banks from 1-3/4 percent to 1/4 percent, effective immediately.


Fed revises internal appeals and ombudsman policies

The Board of Governors of the Federal Reserve System has published [85 FR 15175] a final policy revising its internal appeals process for institutions wishing to appeal an adverse material supervisory determination and its policy regarding the Ombudsman for the Federal Reserve System. The final appeals process will apply to all material supervisory determination appeals initiated after the effective date, which is April 1, 2020.


Agencies encourage use of Fed's discount window

The Federal Reserve Board, FDIC and OCC issued a joint press release Monday, with a statement encouraging banks to use the Federal Reserve's discount window so that they can continue supporting households and businesses.


Bureau updates HMDA FAQs

The CFPB has published a response to a frequently asked HMDA question: If a natural person applicant submits a mail, internet, or telephone application under Regulation C but does not provide race, ethnicity, or sex information, what should the financial institution report regarding whether this information was collected on the basis of visual observation or surname? It's question 7 in the "Ethnicity, Race, and Sex" group on the Bureau's HMDA FAQs.

The Bureau's answer?—If the financial institution doesn't have an opportunity to collect this information during an in-person meeting in the application process, the financial institution may report either that the information was not collected on the basis of visual observation (code 2) or that the requirement to report this data field is not applicable (code 3). For consistency of data across all reporters, the CFPB suggests (but doesn't require) that code 2 be used.


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