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Top Story Lending Related


Enterprises to purchase qualified loans in forbearance

The Federal Housing Finance Agency (FHFA) has announced its approval of the purchase by Fannie Mae and Freddie Mac (the Enterprises) of certain single-family mortgages in forbearance that meet specific eligibility criteria. Due to the COVID-19 pandemic, some borrowers have sought payment forbearance shortly after closing on their single-family loan and before the lender could deliver the mortgage loan to the Enterprises.

Mortgage loans either in forbearance or delinquent are normally ineligible for delivery under Enterprise requirements. However, yesterday's action lifts that restriction for a limited period of time and only for mortgages meeting certain eligibility criteria. Eligible loans will also be priced to mitigate the heightened risk of loss to the Enterprises from these purchases. These prudential measures also ensure fulfillment of the Enterprises' charter requirements to only purchase loans that meet the purchase standards imposed by private, institutional mortgage investors.


Webinar: How to Become a PPP Lender

The federal banking regulators and the NCUA are jointly hosting a webinar for bankers today (Thursday, April 23) from 11:00 a.m. to 12:00 p.m. EDT. Bankers will have the opportunity to hear directly from officials within the Small Business Administration (SBA) regarding the Paycheck Protection Program (PPP). The presentation is for lenders who are not currently SBA lenders. Details on required preregistration and availability of webinar materials copies can be found in the FDIC's FIL-49-2020, issued yesterday.


FHFA limits servicer advances for loans in forbearance

The Federal Housing Finance Agency has announced the alignment of Fannie Mae's and Freddie Mac's policies regarding servicer obligations to advance scheduled monthly principal and interest payments for single-family mortgage loans. Once a servicer has advanced four months of missed payments on a loan, it will have no further obligation to advance scheduled payments. This applies to all Enterprise servicers regardless of type or size.

When a mortgage loan is in a Mortgage-Backed Security, Fannie Mae servicers with a scheduled payment remittance are responsible for advancing the principal and interest payment regardless of borrower payments. Freddie Mac servicers, who are generally responsible for advancing scheduled interest, are only obligated to advance four months of missed borrower interest payments. Today's instruction establishes a four-month advance obligation limit for Fannie Mae scheduled servicing for loans and servicers which is consistent with the current policy at Freddie Mac.


FDIC guidance and relief for Mississippi storm and flooding damage

The FDIC has issued FIL-47-2020 announcing a series of steps intended to provide regulatory relief to financial institutions and facilitate recovery in areas of Mississippi affected by severe storms, tornadoes, straight-line winds and flooding on April 12.


NCUA issues temp rule to assist CUs

The National Credit Union Administration has published a final rule [85 FR 22010, 4/21/2020] to temporarily modify certain regulatory requirements to help ensure that federally insured credit unions (FICUs) remain operational and liquid during the COVID-19 crisis. Specifically, the Board is temporarily raising the maximum aggregate amount of loan participations that a FICU may purchase from a single originating lender to the greater of $5,000,000 or 200 percent of the FICU's net worth. The Board is also temporarily suspending limitations on the eligible obligations that a federal credit union (FCU) may purchase and hold. In addition, given physical distancing policies implemented in response to the crisis, the Board is tolling the required time frames for the occupancy or disposition of properties not being used for FCU business or that have been abandoned. These temporary modifications will be in place until December 31, 2020, unless extended.


FEMA has suspended communities in three states

FEMA has published a notice identifying communities in Iowa, Nebraska, and New Jersey that were scheduled for suspension from the National Flood Insurance Program on Friday, April 17 for noncompliance with the floodplain management requirements of the program:

  • Iowa: Emerson, Glenwood, Hastings, Malvern, Pacific Junction, Silver City, and unincorporated areas of Mills County
  • Nebraska: Unincorporated areas of Dodge County
  • New Jersey: Haledon, Little Falls, Pompton Lakes, and Totowa


FTC stops fake SBA lender

The Federal Trade Commission has charged a Rhode Island-based company and its owner with falsely claiming to be an approved lender for a federal coronavirus relief lending program and asked a federal court to immediately halt their misrepresentations. The Commission filed a complaint alleging that Ponte Investments, LLC, also doing business as SBA Loan Program and SBA Loan, and its owner John C. Ponte, have been falsely claiming an affiliation with the U.S. Small Business Administration and marketing themselves to small businesses as an approved lender under SBA’s Paycheck Protection Program. According to the FTC, the defendants are neither affiliated with the SBA in any way, nor are they SBA-authorized lenders.


Temporary Reg O change for PPP loans

The Federal Reserve Board has announced an interim final rule to bolster the effectiveness of the SBA's Paycheck Protection Program (PPP). The change will temporarily modify the Board's Regulation O so that certain bank directors and shareholders can apply for PPP loans for their small businesses. The SBA recently clarified that PPP lenders can make PPP loans to businesses owned by their outside directors and certain shareholders, subject to certain limits and without favoritism. The Board's change will allow those individuals to apply for PPP loans, consistent with SBA's rules and restrictions. The change only applies to PPP loans. The rule change is effective immediately upon publication and will be in place through June 30, 2020.

UPDATE: Published at 85 FR 22345 on 4/22/2020, with comments on the interim final rule due by June 8, 2020.


COVID-19 relief approved by NCUA

The National Credit Union Administration Board has announced its approval of three items:

  • A temporary final rule granting measures of regulatory relief to help ensure that federally insured credit unions remain operational and liquid during the COVID-19 pandemic.
  • An interim final rule that temporarily defers real estate-related appraisals and evaluations under the agency’s appraisal regulations because the public health crisis and social distancing directives have created difficulties for lenders to obtain required appraisals on a timely basis.
  • A final rule that increases the threshold level below which appraisals would not be required for residential real estate-related transactions from $250,000 to $400,000.


Final rule raising data reporting thresholds under HMDA

The Consumer Financial Protection Bureau has announced a final rule raising the loan-volume coverage thresholds for financial institutions reporting data under the Home Mortgage Reporting Act (HMDA).

The final rule, amending Regulation C, increases the permanent threshold for collecting and reporting data about closed-end mortgage loans from 25 to 100 loans effective July 1, 2020. The final rule will also amend Regulation C to increase the permanent threshold for collecting and reporting data about open-end lines of credit from 100 to 200, effective January 1, 2022, when the current temporary threshold of 500 of open-end lines of credit expires. In October 2019, the Bureau extended the temporary open-end threshold until January 1, 2022. But for today’s final rule, the open-end threshold would have reverted to 100 open-end lines of credit upon the expiration of the temporary threshold.

An Executive summary of the final rule includes guidance for institutions transitioning from being reporting institutions to excluded institutions for closed-end mortgage loans effective July 1, 2020.

KATHLEEN BLANCHARD will present a Live Webinar on the New HMDA Changes on May 29, 2020. REGISTER NOW!

The final rule was published at 85 FR 28364 on May 12, 2020.


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