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Top Story Lending Related

05/20/2020

Guidance issued on borrower eligibility for refi or purchase

The Federal Housing Finance Agency (FHFA) announced yesterday that Fannie Mae and Freddie Mac (the Enterprises) have issued temporary guidance regarding the eligibility of borrowers who are in forbearance, or have recently ended their forbearance, who wish to refinance or buy a new home. Borrowers are eligible to refinance or buy a new home if they are current on their mortgage (i.e. in forbearance but continued to make their mortgage payments or reinstated their mortgage). Borrowers are eligible to refinance or buy a new home three months after their forbearance ends and they have made three consecutive payments under their repayment plan, or payment deferral option or loan modification.

FHFA is also extending the Enterprises' previously announced ability to purchase single-family mortgages in forbearance. The Enterprises are now able to buy forborne loans, with note dates on or before June 30, 2020, as long as they are delivered to the Enterprises by August 31, 2020, and where only one mortgage payment has been missed. The previous policy was set to expire on May 31, 2020.

05/19/2020

Labor may allow OT exemption for commissioned loan officers

The Department of Labor has published a final rule at 85 FR 29867 in the May 19, 2020, Federal Register withdrawing the "partial list of establishments" with "no retail concept" and the "partial list of establishments" that "may be recognized as retail" for the purposes of determining whether a business may qualify for an exemption from the Fair Labor Standards Act's overtime compensation requirement for certain commissioned employees employed by a retail or service establishment.

The elimination of the lists from Labor's regulations at 29 CFR 779 will promote consistent treatment when evaluating exemption claims by treating all businesses equally under the same standards. Banking and mortgage lending trade representatives have claimed the two lists have prevented mortgage lenders from applying for exemptions from the overtime requirement for mortgage loan officers who may earn more than half their income from commissions.

05/19/2020

Free credit reports every week

The Federal Trade Commission has posted a blog article, "Credit Reports are now free, every week," reporting that the three national credit reporting agencies—Equifax, Experian, and TransUnion—will provide free weekly credit reports via the www.AnnualCreditReport.com portal through April 2021. The Commission said that the three reporting agencies are making the free reports available to allow Americans who may be anxious about their financial well-being during the COVID-19 pandemic.

05/18/2020

Consumer Guide on Mortgage Relief Options available

The Bureau and the Conference of State Bank Supervisors (CSBS) have released a Consumer Relief Guide with borrowers' rights to mortgage payment forbearance and foreclosure protection under the federal CARES Act.

05/18/2020

SBA releases PPP loan forgiveness application

The Small Business Administration has released the Paycheck Protection Program Loan Forgiveness Application that borrowers must complete in order to have their Paycheck Protection Program loans forgiven. The form includes detailed information about the costs that are eligible for forgiveness and instructions for calculating those costs. The SBA said regulations and additional guidance for borrowers on completing the forgiveness form, as well as guidance for lenders detailing their responsibilities will be issued soon.

05/15/2020

CFPB settles with Monster Loans

The Consumer Financial Protection Bureau has announced the filing of a proposed stipulated final judgment to resolve allegations in its lawsuit against California mortgage lender Chou Team Realty, LLC, which does business as Monster Loans, and several individuals and related companies, including Thomas Chou and Sean Cowell.

The Bureau's complaint alleged that Chou and Cowell were among the leaders of a scheme to use Monster Loans’ account with a major credit bureau to unlawfully obtain consumer reports for their associated student loan debt-relief companies, which in turn used the consumer reports to deceptively market their services nationwide and then charged consumers illegal fees. The proposed settlement, if entered by the court, would impose an $18 million redress judgment against Monster Loans, ban Monster Loans, Chou, and Cowell from the debt-relief industry, and impose a total $450,001 civil money penalty against them.

If approved by the court, the redress and civil penalty amounts would be partially suspended based on the defendants' alleged limited ability to pay.

05/15/2020

Fannie and Freddie extend foreclosure and eviction moratorium

The Federal Housing Finance Agency announced Thursday that Fannie Mae and Freddie Mac (the Enterprises) are extending their moratorium on foreclosures and evictions until at least June 30, 2020. The foreclosure moratorium applies to Enterprise-backed, single-family mortgages only. The current moratorium was set to expire on May 17.

05/14/2020

FDIC updates exam manual

The FDIC has released its April 2020 updates to its Consumer Compliance Examination Manual. The following sections were updated:

  • Pre-Examination Planning (II-4.1): Updated to incorporate changes to the process.
  • Pre-Examination Information Packet Template (III-1.1): Changes to the Pre-Examination Planning process have been reflected in the Template.
  • Truth in Lending Act (V-1.1): Updated to reflect annual threshold changes. The escrow exemption and the appraisal exemption thresholds for higher priced mortgages and the credit card penalty fee safe harbor amount were increased.
  • Home Mortgage Disclosure Act (V-9.1): Updated to reflect updated loan volume thresholds. The asset size exemption thresholds were also updated.
  • Consumer Leasing Act (V-10.1): The exemption threshold for consumer credit and lease transactions were increased.
  • Community Reinvestment Act (XI-1.1): Asset-based definitions for Small Banks and Intermediate Small Banks were updated.

05/14/2020

CFPB statement on responsibility during pandemic

The CFPB has released a statement and FAQs outlining the responsibility of certain financial firms during the pandemic. In the statement, the Bureau outlines the billing error responsibilities of credit card issuers and other open-end non-home secured creditors during the COVID-19 pandemic. Additionally, the Bureau encourages financial firms to continue to provide the kind of assistance to their communities that many have been providing, such as waiving fees, lowering minimum-balance requirements, and implementing changes in account terms that benefit consumers.

It should be noted that these are Bureau statements, which may not reflect the positions of other federal financial regulators.

05/14/2020

New payment deferral option from Fannie and Freddie

The Federal Housing Finance Agency has announced that Fannie Mae and Freddie Mac (the Enterprises) are making available a new payment deferral option. The payment deferral option allows borrowers, who are able to return to making their normal monthly mortgage payment, the ability to repay their missed payments at the time the home is sold, refinanced, or at maturity.

Servicers will begin offering the payment deferral repayment option starting July 1, 2020.

In addition to the new payment deferral option, borrowers with COVID-19 related hardships can still utilize other options that include reinstatement, repayment plan, or loan modifications based on their individual situations.

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