Compliance Calendar

Washington House Bill 1071 enacts provisions relating to breach of security systems and protecting personal information.

This Bulletin announces new and revised requirements to facilitate a secondary market for Mortgages secured by income-based resale restricted properties that use deed restrictions, subordinated loans, or similar legal mechanisms that include provisions to keep a home affordable for individuals and households with very low-, low-, or moderate-incomes.

We are expanding Guide Chapter 4406 to provide additional guidance and new requirements for Mortgages secured by properties subject to income-based resale restrictions. These include:

• Allowing the following to be eligible
  • 2-unit Primary Residences; and
  • CHOICEHomeSM Mortgages, provided that the Seller has written approval from Freddie Mac to deliver these Mortgages
• Revising our requirements to permit cash-out refinance transactions and to permit Borrowers to obtain cash proceeds from refinance transactions as long as the subsidy provider or program administrator approved the transaction
• Adding requirements relating to the subsidy provider and program administrator
• Adding guidance regarding how to calculate the Borrower’s required Down Payment based on the subsidized purchase price
• Specifying that subsidy providers may be entitled to obtain “excess proceeds” in certain instances when the income-based resale restrictions survive foreclosure or the recordation of a deed-in-lieu of foreclosure where proceeds remain following the sale or transfer of an REO property
• Permitting the subsidy provider or program administrator of eligible shared equity homeownership programs to be both the source of the Affordable Second and the property seller in certain instances

Guide impacts: Sections 4406.1, 4406.2, 5703.9 and 6302.37

We are eliminating the limits on the share of appreciation (equity sharing) an Agency or subsidy provider funding an Affordable Second® can receive when the Agency or subsidy provider is managing an eligible income-based resale restriction program and meets other eligibility criteria.

Guide impacts: Section 4204.2 and Glossaries A-I and J-Z

We are revising our requirements for Mortgages with Affordable Seconds to allow:

• Sellers to be the source of Affordable Seconds under certain circumstances when the First Lien Mortgage is a Home Possible® Mortgage and the Seller has an established Affordable Seconds program that supports Community Reinvestment Act (CRA) mandates
• Affordable Seconds to be funded by a nonprofit not affiliated with a Government Agency, provided that the Seller receives Freddie Mac’s prior written approval

Guide impact: Section 4204.2

We are updating Section 6302.34 to add special delivery requirements for Mortgages with Affordable Seconds from certain allowable sources. If applicable, Sellers must enter the following valid values for ULDD Data Point Investor Feature Identifier (Sort ID 368):

• “J07” for a non-profit not affiliated with a Government Agency Affordable Second
• “J54” for a Home Possible Mortgage with a Seller-funded Affordable Second

Guide impacts: Section 6302.34 and Exhibit 34

We are updating the Freddie Mac Affordable Seconds Checklist and adding a link to it in the Guide for ease of reference. In addition, access our new Affordable Seconds and Gifts, Grants and Affordable Seconds quick references to learn more about these sources of funds and submission to Loan Product Advisor®.

Mortgages secured by properties subject to resale restrictions

We are updating the requirements for Mortgages secured by properties subject to resale restrictions that we announced in Bulletin 2018-16 to:

• Clarify that:
  • The resale restriction controls may be administered by the subsidy provider or a program administrator
  • When a Mortgage secured by a resale-restricted property is in foreclosure and/or subject to an approved short sale, the right of first refusal must have a time period not exceeding 90 days
• Provide guidance for appraisal comparable sales selection when resale restrictions terminate and when they survive foreclosure or recordation of a deed-in-lieu of foreclosure

Guide impact: Guide Section 4406.1

This bulletin provides guidance for servicers when servicing mortgages secured by properties subject to resale restrictions or regarding any right of first refusal.

• Fannie Mae and Freddie Mac have worked with approved mortgage insurers to update their master primary policies and related endorsements and other forms
• Any loan sold to or securitized by us that has mortgage insurance and has a loan application date on or after March 1, 2020, must be insured under one of the new approved Forms
• Any loan that has mortgage insurance and has a loan application date prior to March 1, 2020, may be insured under either one of the new approved Forms or any form previously approved for use at the time of the loan application date
• A revised list of the approved Forms for each provider is available at https://www.fanniemae.com/content/tool/approved-mortgage-insurance-forms.pdf

Every Mortgage sold to Freddie Mac that requires mortgage insurance and has an Application Received Date on and after March 1, 2020 must be insured under one of the new Master Policies. Mortgages insured under any other master policy will not be eligible for sale to Freddie Mac.

Every Mortgage sold to Freddie Mac that requires mortgage insurance and has an Application Received Date prior to March 1, 2020 may be insured under either: 

• The new Master Policies, or
• Any pre-existing master policy between the Seller/Servicers and an MI, as long as the Seller/Servicer first confirms with the MI that such policy was approved by Freddie Mac for use as of the Application Received Date

• We are updating the manufacturer’s specifications for CHOICEHomeSM to encourage manufacturing efficiency and enhance the marketability of this product
• A Manufactured Home is granted CHOICEHome certification and is eligible for CHOICEHome financing if the Manufactured Home meets certain specifications. By updating our CHOICEHome specifications, we are aligning with market expectations and providing additional standardization that will be beneficial to the industry and to Borrowers. These changes include the removal of the requirement that the CHOICEHome must include a garage or carport
• We are also making revisions to provide greater specificity about CHOICEHome requirements, including appraisal requirements.
• A Seller must obtain written approval before selling Mortgages secured by a CHOICEHome to Freddie Mac. 

• We are updating Section 5302.4 to provide that if taxpayer consent is required under the Act, Sellers must ensure that the form of consent obtained from the taxpayer permits the use and sharing of the tax return or tax return information with and by any actual or potential owners of the Mortgage, as well as their service providers, successors and assigns
• The Mortgage Industry Standards Maintenance Organization (MISMO®) model taxpayer consent language meets this purpose

This bulletin contains updates related to the following:

• ARM notes and riders that support the LIBOR transition
• Cash payups for low loan balances up to and including $225,000
• Document custodian requirements and the use of powers of attorney for eMortgages

The Bulletin also includes other updates that may be important to your business.

Effective March 4, 2020

• Interest rates applicable to credit extended by a Federal Reserve Bank.
  • (a) Primary credit. The interest rate at each Federal Reserve Bank for primary credit provided to depository institutions under § 201.4(a) is 1.75 percent. 
  • (b) Secondary credit. The interest rate at each Federal Reserve Bank for secondary credit provided to depository institutions under § 201.4(b) is 2.25 percent.

• Regulates reverse mortgages issued under FHA’s HECM program
• Requires lenders offering reverse mortgages in New York to obtain approval from the Superintendent of the New York Department of Financial Services (Superintendent) in order to make HECMs in New York
• Lending provisions of the rule:
  • defines unfair or deceptive practices and prohibits specific language representations
  • requires disclosure of certain consumer protection information that will be promulgated by a form specified by the Superintendent
  • requires lenders and borrowers be represented by an attorney at closing, and each such party must have at least one attorney present to conduct the closing
• Servicing provisions of the rule:
  
  • must inform and provide notice to a borrower, by telephone and first-class mail, when his or her line of credit or life expectancy set aside is depleted to 10% or less of its value
    • such notice must inform the borrower, in plain language, of his or her obligations relating to the property
  • prohibited from making an advance payment for any obligation arising from the borrower’s property
  • in the event a borrower defaults upon the payment of insurance premiums or real property taxes, the lender may only pay those premiums and/or taxes which are in arrears
  • in the event a lender seeks to foreclose on a reverse mortgage loan on the basis that the property is no longer the primary residence of or occupied by the borrower, if during the verification of the borrower’s primary residence and/or occupancy no responses are received in response to mailings relating thereto, such lender must cause a telephone call to be made to the borrower, or if the borrower is unreachable by telephone, to the third-party contact (if designated)
    • prior to the commencement of a foreclosure proceeding, an in-person visit must also be made to the borrower; the lender may not charge a fee for any such visit and inspection
    • the lender must wait at least 30 days following the in-person visit, in addition to any additional time or notice requirements specified by any other provision of law, before initiating a foreclosure action on the basis that the property is no longer the primary residence of the borrower
    • if the borrower contacts the lender and provides proof of residence or occupancy after such visit, but before the commencement of the foreclosure action, the lender is barred from initiating such foreclosure action
      
      • the bill also provides that compliance with its requirements is a condition precedent to commencing a foreclosure action, and failure to comply is a complete defense to such action
      • any person injured by any violation of the bill’s requirements or any violation of the rules and regulations of HUD relating to the HECM program may bring an action to recover treble damages, plus the prevailing plaintiff’s reasonable attorneys’ fees

Effective March 5, 2020; the Superintendent must amend, add and/or repeal any rules and regulations necessary to implement the bill’s provisions by June 3, 2020

Repeals and replaces Part 79 of 3 NYCRR, in its entirety, as follows: 

• Section 79.1 Scope and application of this Part
• Section 79.2 Definitions
• Section 79.3 Authority to make reverse mortgage loans
• Section 79.4 Advertising restrictions
• Section 79.5 Requirements for reverse mortgage loans
• Section 79.6 Maintenance of real property securing reverse mortgage loans
• Section 79.7 Termination of reverse mortgage loans
• Section 79.8 Permitted fees, costs and payments
• Section 79.9 Required disclosures and counseling for reverse mortgage loans
• Section 79.10 Availability of RPL 280 and RPL 280-a loans
• Section 79.11 Prohibited conduct and administrative penalties
• Section 79.12 Special provisions regarding payment of real estate taxes and insurance
• Section 79.13 Policies and procedures

The Secretary of the Pennsylvania Department of State provided guidance with respect to the permissibility of appraisal, notary, title, and home inspections.  For residential real estate contracts entered into after March 6, 2020, all in-person inspections, appraisals, final walk-throughs, and title insurance activities are prohibited until Pennsylvania’s Emergency Disaster Declaration in response to the COVID-19 pandemic has been lifted. With respect to contracts entered into prior to March 6, 2020, in-person activities that are permitted—subject to certain social distancing parameters—include inspections, appraisals, final walk-throughs, and in-person title insurance activities.  In addition, any real estate business that can be accomplished remotely is also permissible.

PROPERTY INSURANCE

Effective March 13, 2020; however, Sellers/Servicers may implement immediately

We require that property insurance for each Mortgaged Premises be provided by an insurer with a certain minimum rating. Currently, for U.S. insurers (and reinsurers) rated by A.M. Best Company (A. M. Best), we require a minimum Financial Strength Rating of B/III.

To strengthen our insurer rating requirements, we are updating the Guide to require a minimum A.M. Best Financial Strength Rating of B+/III for U.S. insurers (and reinsurers).

Guide impacts: Sections 8202.1 and 8202.8

All trials (including judicial foreclosure) postponed unless already commenced.

The Mississippi DBCF strongly encourages licensees to communicate and work closely with consumers that may be impacted by COVID-19 including the possibility of the deferral of fees and other charges. 

The Mississippi DBCF strongly encourages licensees to communicate and work closely with consumers that may be impacted by COVID-19 including the possibility of the deferral of fees and other charges.

The District of Columbia Superior Court issued a memorandum staying all evictions, including those involving foreclosed homeowners, until May 1, 2020.

The Massachusetts Division of Banks issued guidance encouraging financial institutions to work with COVID-19 affected customers and communities, including by: (i) waiving fees; (ii) increasing ATM cash withdrawal limits; (iii) easing restrictions on cashing checks; (iv) increasing credit card limits; and (v) offering payment accommodations to assist members having payment difficulty. The guidance notes that “prudent efforts” to modify loan terms would not be subject to examiner criticism, and institutions can ease their terms for new loans consistent with prudential banking practices. In the guidance, the Division also committed to work with affected institutions to reduce the burden when scheduling examinations and inspections, utilize off-site reviews, and work with institutions experiencing difficulties fulfilling reporting requirements. It further acknowledged that institutions may need to temporarily close facilities and encouraged them to offer alternative service options where practical and notify the Division regarding business disruptions or other significant developments, such as staff shortages, rapid withdrawal of deposits or other signs of erosion in consumer confidence.

• Postpones all foreclosure and summary ejectment proceedings “for at least the next 30 days.”

• Parties may begin eviction proceedings, but they will not be heard until April 14, 2020, at the earliest.

• Emergency evictions where criminal activity is occurring can still be heard in magistrate court at this time.

II. Civil Proceedings

1. All landlord/tenant, debt, replevin and trespass proceedings scheduled for in-court appearance and all evictions currently ordered and scheduled from March 17, 2020 through April 16, 2020 shall be rescheduled for a date not earlier than May 1, 2020, with the following exceptions:

a. Forthwith summons applications in landlord-tenant matters involving essential services and/or harm to person or property will be accepted and ruled upon;

b. Case by case exceptions to these guidelines may be ordered at the discretion of the Court and with proper notice to all parties.

Servicers may employ the following relief for Veterans impacted by COVID-19

Forbearance Request

• Servicers should work with impacted borrowers who are unable to make their mortgage payments to ensure they are evaluated for VA Loss Mitigation options outlined in Chapter 5 of the VA Servicer Handbook M26-4, https://www.benefits.va.gov/WARMS/M26_4.asp. 
• Encourages all servicers to adopt a policy of late charge waivers on affected loans.
• Servicers are encouraged to suspend credit bureau reporting on affected loans.

California published Executive Order N-28-20 requesting that financial institutions implement an immediate moratorium on foreclosures and related evictions arising from the nonpayment of rent or mortgage payments due to a substantial decrease in income or increase in medical expenses caused by the Covid-19 pandemic.

Massachusetts issued an emergency bill placing a moratorium on evictions and foreclosures as long as the governor’s emergency declaration for the Covid-19 outbreak is active.

Statement encouraging financial institutions to take steps to meet the financial services needs of customers and communities adversely affected by COVID-19, including, among other things:

• Waive fees, such as automated teller machine (“ATM”) fees, overdraft fees, late payment fees on credit cards or other loans, and early withdrawal penalties on time deposits;

• Increase ATM daily cash withdrawal limits;

• Ease restrictions on cashing out-of-state and noncustomer checks;

• Increase credit card limits for creditworthy borrowers;

• Offer payment accommodations, such as allowing borrowers to defer or skip payments or extending payment due date to avoid delinquencies and negative credit reporting caused by COVID-19-related disruptions;

• Make prudent efforts to modify the terms on existing loans for affected customers, including to evaluate whether the loan represents a “troubled debt restructuring”;

• Ease terms for new loans to affected borrowers; and

• Make other accommodations that could assist customers in responding to COVID-19- related challenges.

In addition, the division provides assurances that it will consider the unusual circumstances financial institutions are facing, including an increase in levels of delinquent or nonperforming loans, when reviewing the institutions financial condition.

• Moratorium on residential evictions for 60 days, until May 15, 2020.

• Exceptions permitted when eviction is based on tenant actions that constitute a threat to health or safety.

• Note: Currently more protective than state order, which stays actions until April 17, 2020.

• Crediting payments from borrowers and handling late payments.  Notably, the Final Rule requires payments received by a servicer to be credited, or treated as credited, on the business day received.
• Annual account statements which must be provided to borrowers in plain language showing certain information.  Subject to certain exceptions, the Final Rule also requires servicers to provide borrowers a payment history for the preceding 36 months within 30 days of receipt of a request for such statement from a borrower.
• Dual tracking prohibitions that restrict servicers from taking certain foreclosure actions depending on whether the servicer has already made the first foreclosure notice or filing.
• The fees permitted to be collected by servicers and how often such fees may be charged to a borrower.  For example, the Final Rule requires servicers to maintain a current schedule of standard or common fees, and to make such schedule available on its public website and to borrowers upon request.
• The handling of borrower complaints and inquiries, including the requirement that every welcome packet and periodic statement that is delivered to a borrower, and any website maintained by a servicer must provide, among other information, (i) an address to which borrowers can direct complaints and inquiries, and (ii) the toll-free telephone number or collect calling services that enables borrowers to speak with a living person during regular business hours, trained to answer inquiries and instruct borrowers on how to file written complaints.  
• Early intervention and loss mitigation, including provisions that require servicers to provide certain delinquent borrowers with a single point of contact, early intervention notice, appropriate loss mitigation options and modifications, and appeal rights. In addition, and subject to certain exceptions, the Final Rule requires a servicer to send a late payment notice to a borrower informing the borrower that his or her payment is late no later than the 17^th day of the delinquency.
• The books and records that servicers (registered or exempt) are required to maintain as well as other reports the Superintendent may require servicers to file, such as a quarterly volume of servicing report.
• Crediting payments from borrowers and handling late payments.  Notably, the Final Rule requires payments received by a servicer to be credited, or treated as credited, on the business day received.
• Annual account statements which must be provided to borrowers in lain language showing certain information.  Subject to certain exceptions, the Final Rule also requires servicers to provide borrowers a payment history for the preceding 36 months within 30 days of receipt of a request for such statement from a borrower.
• Dual tracking prohibitions that restrict servicers from taking certain foreclosure actions depending on whether the servicer has already made the first foreclosure notice or filing.
• The fees permitted to be collected by servicers and how often such fees may be charged to a borrower.  For example, the Final Rule requires servicers to maintain a current schedule of standard or common fees, and to make such schedule available on its public website and to borrowers upon request.
• The handling of borrower complaints and inquiries, including the requirement that every welcome packet and periodic statement that is delivered to a borrower, and any website maintained by a servicer must provide, among other information, (i) an address to which borrowers can direct complaints and inquiries, and (ii) the toll-free telephone number or collect calling services that enables borrowers to speak with a living person during regular business hours, trained to answer inquiries and instruct borrowers on how to file written complaints.  
• Early intervention and loss mitigation, including provisions that require servicers to provide certain delinquent borrowers with a single point of contact, early intervention notice, appropriate loss mitigation options and modifications, and appeal rights. In addition, and subject to certain exceptions, the Final Rule requires a servicer to send a late payment notice to a borrower informing the borrower that his or her payment is late no later than the 17^th day of the delinquency.
• The books and records that servicers (registered or exempt) are required to maintain as well as other reports the Superintendent may require servicers to file, such as a quarterly volume of servicing report.

Kansas published an Executive Order prohibiting banks or financial lending entities operating in Kansas from foreclosing on a residential property in Kansas where the foreclosure is based on a default or violation of the mortgage are substantially caused by a financial hardship resulting from the COVID-19 pandemic.

New Hampshire published Emergency Order #4 temporarily prohibiting evictions and foreclosures, including judicial and non-judicial foreclosure actions, during the declared State of Emergency.

NDBF encourages financial institutions to take steps to meet the financial services needs of affected customers and communities. 

Working with Customers: The NDBF encourages financial institutions to work with affected customers and communities. The NDBF recognizes that such efforts serve the long-term interests of communities and the financial system when conducted with appropriate management oversight and consistent with safe and sound banking practices and applicable laws. These efforts may include, but are not limited to: 

• Social distancing which may require shortened hours, reduced customer to Financial Institution (FI) contact and even closing of select activities in certain locations. 
• Updated door, lobby and web signage relative to hours and locations to obtain financial services. 
• FI consideration as to payment and or term accommodations, such as allowing borrowers to defer or skip some payments or extending the payment due date by up to 90 days which would avoid delinquencies and negative credit bureau reporting caused by COVID-19-related disruptions. 

The NDBF emphasizes prudent efforts to modify the terms on existing loans for affected customers. For example, when appropriate on a loan by loan basis, a financial institution may restructure a borrower's debt obligations due to temporary hardships resulting from COVID-19 related issues. Such cooperative efforts can ease cash flow pressures on affected borrowers, improve their capacity to service debt, and facilitate the financial institution’s ability to collect on its loans. 

Financial institutions may also ease terms for new loans to affected borrowers, consistent with prudent banking practices. Such practices may help borrowers to recover or maintain their financial capacity and enhance their ability to service their debt. 

The NDBF recognizes there may be other accommodations that could assist customers and communities in responding to challenges from COVID-19. The NDBF supports and will not criticize efforts to accommodate customers in a safe and sound manner; in compliance with standard accounting practices. The NDBF encourages financial institutions to work with their regulator regarding additional actions that may more effectively manage or mitigate any adverse impact due to COVID-19. 

Letter encouraging residential mortgage servicers operating in Connecticut to take steps to meet the financial services needs of customers and communities adversely affected by COVID-19, including, among other things:

• Ease credit terms for new loans, waive overdraft fees, increase the number of allowed money market withdrawals, waive CD early withdrawal penalties, waive late fees for loan balances, and offer payment accommodations (such as deferment or extending the payment due date).

The Department also states that any modifications to existing loans that are deemed prudent by financial institutions in light of the circumstances will not be subject to regulatory criticism. In addition, the Department requests that financial institutions consider providing guidance to their servicers and collection agencies regarding the institution’s current policies to ensure their teams are fully aware of all potential accommodations available to adequately assist impacted customers.

• Mortgage foreclosures are effectively stayed as a nonessential court proceeding that is cancelled during the pandemic.

• No statewide eviction moratorium in place at this time, but Governor DeSantis has said he will consider one.

For filing purposes, all dates between March 16 through March 27, 2020, shall be treated as a legal holiday;

• Deadlines for trials and summary judgment motions are relaxed and extended;

• The Office of Foreclosure will not review or recommend motions or judgment received on or after March 1, 2020, pending further court order; and

• Landlord/tenant calendars are suspended through April 26, 2020, and residential evictions are suspended.

All nonemergency/essential matters (including evictions in the district court) are continued until after April 17, 2020.

• Foreclosure mediation timing - the time period after the date of mailing of a notice of default on residential mortgage by which a foreclosure mediation must be scheduled is extended to 120 days from 90 days. The mediation must be completed within 210 days of the date of the mailing of the notice on default. A mediator may reschedule with at least 2 business days’ notice if doing so is in the public interest.

• All mortgage lenders, mortgage brokers and mortgage loan originators (“MLOs”) offering mortgage loan services or engaging in the business of servicing mortgage loans for others may operate from home, even if the home offices are not licensed as branch locations, as long as security conditions are met.

CREDIT REPORTING REQUIREMENTS

• Servicers must not report to the credit repositories a Borrower who is on an active forbearance plan, repayment plan or Trial Period Plan as a result of a COVID-19 related hardship

FORBEARANCE PLANS

• A COVID-19 related hardship is an eligible hardship under existing Guide requirements
• This may include long-term or permanent disability/serious illness of a Borrower/co-Borrower or dependent family member, reduction in income, death or other eligible hardship reasons
• Servicers must achieve quality right party contact with the Borrower to verify the hardship, and once verified must work with the Borrower to apply the appropriate solution, including the application of a forbearance plan, if applicable
• In accordance with existing Freddie Mac forbearance plan requirements described in Section 9203.13, no documentation is required from the Borrower in order to verify the hardship
• Servicers are authorized to approve forbearance plans for all Borrowers who have a COVID-19 related hardship, regardless of property type
  • Until further notice the Mortgaged Premises may be a Primary Residence, second home or Investment Property

LOAN MODIFICATIONS

• Servicers must evaluate Borrowers with a COVID-19 related hardship for the Extend Modification and the Cap and Extend Modification
• Servicers must conduct Extend Modification and Cap and Extend Modification evaluations in accordance with all existing requirements, with the following adjustments:
  • The Borrower must have a COVID-19 related hardship (e.g., unemployment or reduction in regular work hours).
    Note: The Servicer is not required to obtain documentation to verify the borrower’s hardship.
  • The Borrower must have been current or less than 31 days delinquent (i.e., must not have missed more than one monthly payment) as of the date of the National Emergency declaration related to COVID-19, March 13, 2020.
  • When instructed to provide program title information in the Workout Prospector or Guide Form 1128, Loss Mitigation Transmittal Worksheet, as applicable, the Servicer must label the modifications as “Extend Modification for COVID-19” and “Cap and Extend Modification for COVID-19,” respectively.

BORROWER CONTACT REQUIREMENTS AND COVID-19 LOSS MITIGATION HIERARCHY

• Servicers must initiate outreach attempts no later than 30 days prior to the end of the Borrower’s COVID-19 related forbearance 
• Servicers must attempt to contact the Borrower until quality right party contact (QRPC) has been established or until the forbearance plan has expired
• If QRPC is established with a Borrower who was 31 days or more delinquent (i.e., had missed more than one monthly payment) prior to the National Emergency declaration, then the Borrower is not eligible for the Extend Modification (or Cap and Extend Modification), and the Servicer must evaluate the Borrower in accordance with the standard evaluation hierarchy
• If QRPC is established with a Borrower who was current or less than 31 days delinquent (i.e., the Borrower had not missed more than one monthly payment) prior to the National Emergency declaration, and the Borrower is unable to resolve the Delinquency through a reinstatement or repayment plan, the Servicer then must evaluate the Borrower for the loss mitigation options set forth in the following COVID-19 related evaluation hierarchy:
  • 1.Extend Modification 
  • 2.Cap and Extend Modification 
  • 3.Freddie Mac Flex Modification® 
  • 4.Short sale 
  • 5.Deed-in-lieu of foreclosure
• If QRPC is not established at the end of the COVID-19 related forbearance, and the Borrower is eligible for a streamlined offer for a Flex Modification, the Servicer must send the Borrower an offer for a Flex Modification

FORECLOSURE SALE MORATORIUM

• Servicers must suspend all foreclosure sales for the next 60 days. 
• This foreclosure suspension does not apply to Mortgages on properties that have been determined to be vacant or abandoned.

Forbearance plan eligibility

•  Servicers should evaluate borrowers for a forbearance plan who have experienced a hardship resulting from COVID-19 (for example, unemployment, reduction in regular work hours, or illness of a borrower/co-borrower or dependent family member) which has impacted their ability to make their monthly mortgage loan payment
• Servicers must achieve quality right party contact (QRPC) with the borrower prior to offering a forbearance plan
• When determining eligibility for a forbearance plan for a borrower impacted
  by COVID-19, the property securing the mortgage loan may be a principal residence, a second home, or an investment property

Evaluating the borrower for a mortgage loan modification after a forbearance plan

For borrowers who have received a forbearance plan in response to COVID-19, Servicers must 

• must begin attempts to contact the borrower no later than 30 days prior to the expiration of the forbearance plan term, 
• must continue outreach attempts until either QRPC is achieved or the forbearance plan term has expired, and 
• must analyze each case carefully in accordance with the requirements in the table below before determining which mortgage loan modification is most appropriate for the borrower

We are extending the availability of the Fannie Mae Extend Modification for Disaster Relief to borrowers impacted by COVID-19.

• Please refer to LL-2020-02 for complete requirements

Credit bureau reporting 

• Servicers must suspend reporting the status of a mortgage loan to credit bureaus during an active forbearance plan, or a repayment plan or Trial Period Plan where the borrower is making the required payments as agreed, even though payments are past due, as long as the delinquency is related to a hardship resulting from COVID-19

Suspension of foreclosure sales

• Servicers must suspend all foreclosure sales for the next 60 days 
• This foreclosure suspension does not apply to mortgage loans on properties that have been determined to be vacant or abandoned

Use of Fannie Mae’s Disaster Response Network

• Our Disaster Response Network (DRN) is operational and can be used to assist borrowers who are financially impacted by COVID19 
• The DRN has trained financial counselors who will work with borrowers to create a workable budget based upon the borrower’s present financial situation and assist in explaining options including obtaining unemployment benefits and any new special assistance 
• We encourage servicers to refer Fannie Mae borrowers to our Disaster Response Network at 1-877-542-9723

• Institutes a foreclosure and eviction moratorium for all FHA-insured Single Family mortgages for a period of 60 days
  • The moratorium applies to the initiation of foreclosures and to the completion of foreclosures in process
  • Evictions of persons from properties secured by FHA-insured Single Family mortgages are also suspended for a period of 60 days
  • Deadlines of the first legal action and reasonable diligence timelines are extended by 60 days

SECTION 1. IC 24-4.5-1-106, AS AMENDED BY P.L.140-2013, SECTION 18

• (2) The dollar amounts shall change on January 1 of each even-numbered odd-numbered year if the percentage of change, calculated to the nearest whole percentage point, between the Index at the end of the preceding odd-numbered year and the Reference Base Index is ten percent (10%) or more, with exceptions
• (4) The department shall issue an emergency rule under IC 4-22-2-37.1 announcing: (a) sixty (60) days before January 1 of each odd-numbered year in which dollar amounts are to change

Connecticut issued guidance to residential mortgage servicers on Covid-19-related issues, encouraging servicers to work with all borrowers whose ability to make loan repayments may be impacted by Covid-19; including waiving late fees, offering forbearance plans or other deferment options, and having adequate staff available to proactively work with borrowers.

Florida OFR Guidance encourages, but does not require, financial institutions to consider loan workout options.

• “OFR encourages financial institutions to work with customers and communities affected by COVID-19.”

• “Reasonable efforts to make new loans and modify the terms on existing loans of affected customers will not be subject to examiner criticism.”

• “OFR examiners will be fair and understanding regarding the impact of COVID-19 and the efforts being made by financial institutions to work with customers or members in response to this public health emergency.”

• Institutions are “particularly” encouraged to work with “borrowers from industries that may be especially vulnerable to volatility in the current economic environment.” 

The Maine Supreme Judicial Court provides that evictions, foreclosures, landlord/tenant disputes, and other cases and proceedings will not be scheduled or heard through May 1, 2020, unless otherwise ordered by the court.

• All evictions currently ordered and scheduled statewide to be rescheduled not earlier than May 1, 2020.

• Court shall not accept applications for ejectment, schedule hearings, issue writs or warrants of ejectment, or proceed in any manner regarding evictions until directed by subsequent order by the Chief Justice.

• Moratorium in master-in-equity courts statewide on foreclosure hearings, foreclosure sales, writs of assistance, and writs of ejectments, nor should masters-in-equity proceed in any other manner regarding foreclosures until directed by a subsequent order of the Chief Justice.

• All residential evictions stayed until April 17, 2020, including unlawful detainer actions under RCW 59.12;

• Landlords are prohibited from serving notice of an unlawful detainer action on tenants for rent payments in default;

• Twenty-day notices are prohibited except in the case that a landlord can attest that the action is necessary to ensure the health or safety of the tenant or others;

• Landlords prohibited from seeking a writ of restitution; and 

• Local law enforcement is prohibited from serving or acting on evictions

On April 16, Washington's governor extended the state's prohibitions against evictions and other measures—it now goes through June 4, 2020. 

• All residential evictions stayed until June 4, 2020, including unlawful detainer actions under RCW 59.12;

• Landlords are prohibited from serving notice of an unlawful detainer action on tenants for rent payments in default;

• Twenty-day notices are prohibited except in the case that a landlord can attest that the action is necessary to ensure the health or safety of the tenant or others;

• Landlords prohibited from seeking a writ of restitution; and 

• Local law enforcement is prohibited from serving or acting on evictions

The Department is issuing guidance to urge all regulated and exempt mortgage servicers to do their part during this outbreak to alleviate the adverse impact caused by COVID-19 on those mortgage borrowers (“mortgagors”) who demonstrate they are not able to make timely payments, including taking reasonable and prudent actions, and subject to the requirements of any related guarantees or insurance policies, to support those adversely impacted mortgagors by:

• Forbearing mortgage payments for 90 days from their due dates;
• Refraining from reporting late payments to credit rating agencies for 90 days;
• Offering mortgagors an additional 90-day grace period to complete trial loan modifications, and ensuring that late payments during the COVID-19 pandemic does not affect their ability to obtain permanent loan modifications;
• Waiving late payment fees and any online payment fees for a period of 90 days;
• Postponing foreclosures and evictions for 90 days; and
• Ensuring that mortgagors do not experience a disruption of service if the mortgage servicer closes its office, including making available other avenues for mortgagors to continue to manage their accounts and to make inquiries; and
• Proactively reaching out to mortgagors via app announcements, text, email or otherwise to explain the above-listed assistance being offered to mortgagors.

General Program Requirements, to replace field office and State Director references with the appropriate division as a result of the SFHGLP reorganization and add training requirements for new SFHGLP specialists. 

• Paragraph 1.2 C - clarified the new centralization process, replaced CSC with NFAOC and updated the terminology, removed field office from the list. 
• Paragraph 1.3 - condensed last paragraph and inserted SFHGLD email box.
• Paragraph 1.5; rephrased last paragraph for clarity. 
• Paragraph 1.6 B - revisions made for clarity and flow. 
• Paragraph 1.7 - removed redundant language. 
• Paragraph 1.8 - revised paragraph, additional guidance for processing applications for American Indian Tribes is provided in Chapter 16. 
• Paragraph 1.9 A - Field office was replaced with Agency. 
• Paragraph 1.9 C - titles of Agency directors were changed to reflect the new organizational structure for exception authority. 
• Paragraph 1.10 B - guidance was provided to lenders and Agency employees on disclosing known relationships or associations. Reference to Instruction 1900-D was removed. 
• Paragraph 1.11 - removed reference to interest rate in the first paragraph, provided clarification on the process for reporting unauthorized assistance, and Agency resolution process. 
• Paragraph 1.12 - added new section to provide guidance on SFH University training and loan approval process for new specialists. 
• New Attachment 1-A, “Notice of Relationship/Association between SFHGLP Applicant and Rural Development Employee; 
• New Attachment 1-B, “Requirements for Handling SFHGLP Application of Employee, Relative or Associate; 
• New Attachment 1-C, “Delegation of Loan Approval Authority;”

Credit Analysis to clarify credit qualifications, adverse credit, and Federal debts. A matrix was added to assist USDA employees and lending/real estate partners to efficiently locate credit analysis guidance. 

Paragraph 10.2: 

Added specific language to confirm delinquent non-tax Federal debt and delinquent court ordered child support will render an applicant ineligible. 

Clarified the CAIVRS response must be an “A” for an applicant to be eligible. 

Paragraph 10.3: 

Streamlined guidance for acceptable credit reports and removed the need to order an RMCR for certain circumstances. 

Added guidance to clarify lenders may follow credit repository guidelines, lending laws, etc. to determine if joint applicants must have separate credit reports. 

Added guidance to confirm USDA does not require unmarried applicants to be on the same credit report, loan application, Form RD 3555-21, etc. 

Added guidance to confirm all credit repository information is available and no bureaus are frozen. 

Paragraphs 10.5 – 10.16: 

Eliminated These sections have been relocated to the appropriate topic in the new Attachment 10-A “Credit Matrix”. 

Attachment 10-A (current version): Credit Underwriting: Eliminated 

A new Attachment 10-A “Credit Matrix” replaces the current attachment. 

Attachment 10-B: The Credit Review: Eliminated 

The guidance in Attachment 10-B has been relocated to the appropriate topic in the new Attachment 10-A “Credit Matrix”.  

Maryland published an Industry Advisory immediately staying all foreclosures of residential properties in Maryland.

New York published guidance on servicing during the COVID-19 national emergency declaration, including: proactive borrower contact; payment forbearance; credit reporting; grace periods for Trial Loan Modifications, late payment waivers; foreclosures and evictions; and business continuity plans.

The Department specifically encourages the entities and individuals it regulates to assist those affected by the current conditions by taking actions such as:

Banking Division Regulated Entities/Individuals: Consistent with safe-and-sound banking practices: 

• relaxing due dates for loan payments (of all types, including mortgage, commercial, student and other consumer loans), 
• extending grace periods, 
• modifying terms on existing loans, 
• easing credit card limits, 
• extending new credit, 
• waiving late fees and other fees, 
• allowing customers to defer or skip payments, and 
• delaying the submission of delinquency notices to credit bureaus.

No eviction or foreclosure actions or proceedings involving residential real estate or property, whether rental or otherwise, may be initiated between the period from the date of this Executive Order until the state of emergency has terminated; and any applicable statute in connection therewith is hereby suspended for any such actions or proceedings as described above. In addition, and notwithstanding the foregoing, any applicable rule or regulation in connection therewith is hereby rescinded for any such actions or proceedings as described above for the duration of the state of emergency.

No provision contained in this Executive Order shall be construed as relieving any individual of their obligations to pay rent, to make mortgage payments, or to comply with any other obligation (s) that an individual may have under a tenancy or mortgage.

The Superior Court issued a temporary moratorium on all judicial foreclosure and eviction actions in Connecticut:

• All foreclosure sales previously scheduled to have occurred in April or May 2020 are rescheduled to Saturday, June 6, 2020, with no appointed committee to begin working on the sale (i.e., place foreclosure signs on the property, etc.) prior to May 1, 2020.

• Judgment in any foreclosure action in which the Superior Court set a “law day” to run in April or May is amended with the first law day now set for June 2, 2020.

• All executions issued in eviction or ejectment actions are stayed through May 1, 2020.

• All civil trials, trial management conferences, pre-trials, status conferences, judicial alternative dispute resolution mediations and short calendars (arguable and nonarguable) are cancelled.

The governor suspended, among other things, all noncritical court operations, including, but not limited to:

• Statutory time requirements;

• Statutes of limitations or other limitations or deadlines relating to service of process;

• Court proceedings or court filings for the duration of the COVID-19 outbreak, in particular, proceedings enumerated in the order, including time requirements for Connecticut Supreme Court and Connecticut Appellate Court filings.

These limitations impact civil litigation involving financial services products relating to foreclosure, eviction, and collection actions.

• No lessee, tenant, homeowner, or any other person shall be removed from a residential property as a result of an eviction or foreclosure proceeding while Executive Order 106 is in effect.

• Eviction and foreclosure proceedings may be initiated or continued while Executive Order 106 is in effect, but enforcement of any judgments for possession, warrants of removal, and writs of possession shall be stayed.

The Pennsylvania Supreme Court has declared a statewide “judicial emergency” as of March 19, 2020. Pursuant to the court’s order, “during the period of judicial emergency, no eviction, ejectment or other displacement from a residence based on failure to make payment can be made.”

Eviction moratorium: 

• Most residential eviction proceedings have been halted through April 19, 2020. 
• The order allows for new filings, but it states that no trial, hearings, or other proceedings can be held until after April 19, 2020. 
• Exceptions are allowed in instances where a tenant poses an imminent physical threat or is conducting criminal activity.

• Institutes a foreclosure and eviction moratorium for all USDA Single Family Housing Guaranteed Loans Program (SFHGLP) loans for a period of 60 days
  • The moratorium applies to the initiation of foreclosures and to the completion of foreclosures in process
  • Evictions of persons from properties secured by USDA guaranteed loans are also suspended for a period of 60 days
  • Deadlines of the first legal action and reasonable diligence timelines are extended by 60 days
• Loan servicers seeking to assist SFHGLP borrowers may also pursue any of the relief options referenced in Chapter 18 of the program Handbook found at: https://www.rd.usda.gov/files/...
• Questions regarding program policy and this announcement may be directed to the National Office Division at sfhgld.program@usda.gov or (202) 720-1452

To help mitigate potential program delivery concerns during this time of uncertainty, we offer the following guidance, flexibility and information to our customers:

• Site assessments of existing homes and new construction sites by RD staff may be waived to protect the safety of our staff and our most vulnerable customers.
• Appraisal orders through our vendors are continuing with minimal disruption.
• For eligible applicants who have been issued a Certificate of Eligibility and impacted by COVID-19, an extension of eligibility is available. For approved applicants with a pending loan closing, please contact USDA staff so that we can work with your closing agent and other parties to potentially coordinate the closing via mail or email.  
• Pre-construction conferences and reviews of work in progress can occur by phone or through qualified third parties.
• Applicants must remain eligible for assistance at the time of approval and closing. If an adverse change to applicant income or credit has occurred prior to closing, additional payment assistance subsidy may be available.
• Self-Help Grantee organizations are encouraged to limit workers to immediate family members or small groups of 10 or less at worksites. This alternative method of construction may take some additional coordination and scheduling but will enable families to continue working on new homes. Volunteer labor outside of immediate households is discouraged and especially for higher risk populations. We understand that this can cause time delays, so requests for grant amendments and time extensions should be submitted in accordance with RD Instruction 1944-I, 1944.420 as early as practical. Please contact Rural Development and Regional Technical and Management Assistance contractor staffs so that we may offer additional assistance.
• Foreclosures on borrowers with USDA Single Family Housing Direct (SFHD) loans are suspended for a period of 60 days. Similarly, evictions of persons from properties secured by SFHD loans are also suspended for a period of 60 days.

Colorado issued an executive order limiting evictions and foreclosures because of Covid-19, and encourages a 90-day deferment of payment for all consumer loans, including residential mortgage loans.

Washington published guidance to servicers regarding support for borrowers impacted by Covid-19, including: proactive borrower contact; payment forbearance; credit reporting; grace periods for Trial Loan Modifications, late payment waivers; online payment waivers; and foreclosures.

The Massachusetts Department of Fire Services released a memorandum temporarily permitting the inspections of smoke detectors and carbon monoxide alarms, which sellers are normally required (under various provisions of Massachusetts law) to have completed prior to the transfer of title, to be deferred due to the COVID-19 pandemic.

Massachusetts ordered that the inspections for smoke alarms and carbon monoxide detectors required by state law in connection with residential property sales may be deferred, provided that (1) the buyer agrees to take responsibility for equipping the property with the requisite alarms and detectors; and (2) the inspection is conducted within 90 days after the state of emergency for the Covid-19 outbreak is lifted.

Executive order prohibiting foreclosure of any commercial or residential properties for 90 days.

The division issued a nonbinding bulletin advising all Oregon-regulated lenders and loan servicers to provide reasonable assistance to Oregon borrowers. 

• The entities are advised to take “active measures” to assist borrowers impacted by the COVID-19 pandemic, such as loan forbearance plans, fee waivers, and other deferred payment options during the Oregon State of Emergency (declared March 8, 2020). Suggested measures include:

o 90-day mortgage forbearance;

o 90-day period to modify mortgages;

o Loan payment accommodations;

o Waiving late payments and fees;

o Waiving overdraft and nonsufficient funds fees; and

o Refraining from reporting late payments to credit agencies for 90 days.

• The guidance bulletin is in effect through the duration of the Oregon State of Emergency

— Bars removal or exclusion from leased residential premises or residential premises held under a forfeited executory contract, a tenant, a vendee of a forfeited executory contract, or a person holding under a tenant or vendee, except when the tenant, vendee, or person holding under them poses a substantial risk to another person or an imminent and severe risk to property. Effective through April 17, 2020.

— Bars any person from entering residential property to remove or exclude from the premises, a tenant, a vendee of a forfeited executory contract, a person holding under a tenant or vendee, or the personal property of at tenant, vendee, or person holding under them, except when the tenant, vendee, or person holding under them poses a substantial risk to another person or an imminent and severe risk to property. Effective through April 17, 2020.

— Bars sheriffs or constable, deputy, or other officer from serving process requiring forfeiture of leased residential premises or residential premises held under a forfeited executory contract. Effective through April 17, 2020.

— The Executive Order does not expressly reference post-mortgage foreclosure evictions.

— Extends deadline under which property forfeited to a county treasurer must be redeemed from March 31, 2020 until the later of: (a) May 29, 2020, or (b) 30 days after termination of the state of emergency. See Executive Order here.

Section 2. Order ceasing evictions.

Pursuant to the Illinois Emergency Management Agency Act, 20 ILCS 3305/7(2), (8), and (10), all state, county, and local law enforcement officers in the State of Illinois are instructed to cease enforcement of orders of eviction for residential premises for the duration of the Gubernatorial Disaster Proclamation. No provision contained in this Executive Order shall be construed as relieving any individual of the obligation to pay rent, to make mortgage payments, or to comply with any other obligation that an individual may have under tenancy or mortgage. 

The California DBO is encouraging financial institutions to 

• Waive certain fees (e.g., ATM fees, overdraft fees, late payment fees, early withdrawal penalties)
• Increase ATM daily cash withdrawal limits;
• Ease restrictions on cashing out-of-state and non-customer checks;
• Increase credit card limits for creditworthy borrowers; and
• Offer payment accommodations, such as allowing borrowers to defer or skip some payments or extending the payment due date, which would avoid delinquencies and negative credit bureau reporting caused by Covid-19-related disruptions.

California recommends that licensees offer payment accommodations, such as allowing borrowers to defer or skip some payments or extend the payment due date, which would avoid delinquencies and negative credit bureau reporting caused by COVID-19-related disruptions.

SECTION TWO. Pursuant to Iowa Code §§ 29C.6(6) and 135.144(3), and in conjunction with the Iowa Department of Public Health, I temporarily suspend the regulatory provisions of Iowa Code chapters 646, 654, 655A, and 656 allowing for the commencement of foreclosure proceedings, or the prosecution of ongoing foreclosure proceedings, on residential, commercial, and agricultural real property located in the state of Iowa. Suspension of these provisions shall apply during the duration of this Proclamation or any future extension of this suspension.

A. Nothing in this section shall be construed as relieving any individual of their obligation to make mortgage payments, or to comply with any other obligation that an individual may have under a mortgage.

California statement encourages financial institutions to take steps to meet the financial services needs of customers and communities adversely affected by COVID-19, including, among other things:

• Waive fees, such as automated teller machine (“ATM”) fees, overdraft fees, late payment fees on credit cards or other loans, and early withdrawal penalties on time deposits’;

• Increase ATM daily cash withdrawal limits;

• Ease restrictions on cashing out-of-state and noncustomer checks;

• Increase credit card limits for creditworthy borrowers;

• Offer payment accommodations, such as allowing borrowers to defer or skip payments or extending payment due date to avoid delinquencies and negative credit reporting caused by COVID-19-related disruptions;

• Make prudent efforts to modify the terms on existing loans for affected customers, including to evaluate whether the loan represents a “troubled debt restructuring”;

• Ease terms for new loans to affected borrowers; and

• Make other accommodations that could assist customers in responding to COVID-19-related challenges.

Further, the DBO supports and will not criticize efforts to accommodate customers in a safe and sound manner. The DBO will refrain from citing violations directly arising from any late mortgage recordation due to the closure of a county recorder’s office related to COVID-19. In addition, the DBO provides assurances that it will consider the unusual circumstances financial institutions are facing, including an increase in levels of delinquent or nonperforming loans, when reviewing the institutions financial condition.

• All residential evictions stayed for 90 days for nonpayment of rent arising under ORS 105.105 through ORS 105.168;

• Evictions for reasons other than nonpayment of rent unaffected by order;

• Through June 22, 2020, with extensions and early termination by governor possible.

This Lender Letter provides information about the following:

• Temporary appraisal requirement flexibilities: allowing exterior-only inspection appraisals or desktop appraisals
• Desktop appraisals: allowing for purchase transactions when an interior and exterior appraisal is not available
• Exterior-only inspection appraisals: allowing for purchase and refinances of Fannie Mae-owned loans
• Revisions to the scope of work, statements of assumptions and limited conditions, and appraiser’s certifications:
• requiring modified language to be used with exterior-only and desktop appraisals
• Additional form instructions for appraisals: requiring identification of “exterior” or “desktop” on the interior and exterior
• reports
• Identification of a Fannie Mae loan: reminding lenders about our Loan Lookup tool to identify Fannie Mae-owned loans
• Appraisal waivers: encouraging lenders to accept waiver offers when eligible
• Delivery requirements: changes are not required at this time in Loan Delivery
• Completion reports (Form 1004D): allowing alternatives when a Form 1004D cannot be obtained
• HomeStyle® Renovation and HomeStyle Energy requirements: requiring traditional appraisals for these transactions

Effective: These temporary flexibilities are effective immediately for all loans in process and remain in place for loans with application dates on or before May 17, 2020.

See FAQs here

This Lender Letter provides information about the following:

• Verbal verification of employment: Offering flexibilities related to the lender’s process for obtaining the verbal verification of employment.
• Continuity of income: Reminding lenders of the importance of ensuring sustainable homeownership for borrowers in light of recent events.
• Submission of financial statements and reports: Extending the deadline for submission of financial statements and Form 582 to Apr. 30, 2020.
• Notes, electronic records, and signatures: Reminding lenders of our existing policies regarding possession of the original promissory note before loan purchase, and electronic signature requirements.
• Title insurance: Reminding lenders we accept lender’s policies of title insurance written on the 2006 ALTA loan title insurance form or a local equivalent, which includes “gap coverage.”
• Business continuity plans: Reminding sellers and servicers to have and to follow their own business continuity and resiliency plans.

See Lender Letter for complete details.

The coronavirus disease (COVID-19) is a rapidly evolving situation with significant economic implications and impacts to our Sellers and their Borrowers. In response to our Sellers' questions and concerns, this Bulletin provides:

• Temporary guidance related to our credit underwriting requirements
• Temporary guidance related to our property valuation requirements
• Expansion of our automated collateral evaluation eligibility
• An extension to the deadline for certain annual reporting requirements

This Bulletin also provides reminders regarding:

• Use of Electronic Records and Signatures
• Title insurance
• Seller/Servicer business continuity plan requirements and information about Freddie Mac's business continuity plan

We have been working closely with Fannie Mae under the guidance of the FHFA to introduce these temporary measures to help provide Sellers with the clarity and flexibility to continue to lend in a prudent and responsible manner. We are actively monitoring the developments and will continue to issue additional guidance as appropriate.

 CREDIT UNDERWRITING

These temporary flexibilities are effective immediately for all Mortgages in process and remain in place for Mortgages with Application Received Dates on or before May 17, 2020.

• Modifies the minimum threshold for the regulated entities to conduct stress tests increased from $10 billion to $250 billion
• Removes of the requirements for Federal Home Loan Banks (Banks) subject to stress testing
• Removes the adverse scenario from the list of required scenarios

• The primary and secondary credit rates are the interest rates that the twelve Federal Reserve Banks charge for extensions of credit under these programs
• Effective March 15, 2020, the primary credit rate in effect at each of the twelve Federal Reserve Banks is 0.25 percent
• Effective March 15, 2020, the secondary credit rate in effect at each of the twelve Federal Reserve Banks is 0.75 percent

• Revises the rate of interest paid on balances maintained to satisfy reserve balance requirements (“IORR”) to 0.10 percent
• Revises the rate of interest paid on excess balances (“IOER”) to 0.10 percent

• Amends Regulation D (Reserve Requirements of Depository Institutions, 12 CFR part 204) to lower reserve ratios on transaction accounts maintained at depository institutions to zero percent

New York regulated institutions are required to

• make applications for forbearance of any payment due on a residential
  mortgage of a property located in New York and grant such forbearance for a period of ninety (90) days to any such individual
  • Does not affect any mortgage loans made, insured, or securitized by any agency or instrumentality of the United States, any Government Sponsored Enterprise, or a Federal Home Loan Bank, or the rights and obligations of any lender, issuer, servicer or trustee of such obligations, including servicers for the Government National Mortgage Association
• Eliminate fees charged for the use of automated teller machines (“ATMs”) that are owned or operated by the regulated banking organization 
• Eliminating any overdraft fees 
• Eliminating any credit card late payment fees

Regulated institutions are encouraged, consistent with safe and sound banking practices, to take additional reasonable and prudent actions to assist individuals demonstrating financial hardship as a result of the COVID-19 pandemic in any manner they deem appropriate. 

As soon as reasonably practicable, and in no event not later than ten (10) business days following the promulgation of this regulation, all regulated institutions shall e-mail, publish on their website, mass mail, or otherwise similarly broadly communicate to customers how to apply for COVID-19 relief and provide their contact information. 

Maryland published an Industry Advisory to all Maryland-licensed mortgage servicers to take steps immediately to mitigate the impact of this crisis on their customers by way of: waiving late fees; waiving online and telephone payment fees; forgoing negative credit reporting; offering forbearance or other options; extending trial modification periods; taking steps to ensure borrowers are able to timely make inquires and manage their accounts; reaching out to borrowers proactively to provide information on available assistance; and ensuring all borrower-facing staff are fully informed regarding any assistance available and are proactive in informing borrowers of such.

Minnesota published Executive Order 20-14 suspending evictions and writs of recovery, imposing a moratorium on all pending and future foreclosures and related evictions when the foreclosure or foreclosure-related eviction is caused by the Covid-19 pandemic, and prohibiting late fee waivers during the Covid-19 pandemic.

Emergency regulations promulgated pursuant to Executive Order 202.9 issued by Governor Cuomo on March 21, 2020.

• New York-regulated institutions must:

o Make widely available applications for forbearance of any payment due on a residential mortgage of New York property;

o Within 10 business days of the order, disseminate information regarding how to apply for COVID-19 relief;

o Process and respond to requests for relief within 10 business days of receipt of necessary information; and

o Issue determination in writing where feasible.

• Section 39 of the Bank Law is modified such that it is deemed an “unsafe and unsound business practice” for any bank to “not grant a forbearance of any payment due on a residential mortgage for a period of ninety (90) days to any individual who has applied for such a forbearance and demonstrated a financial hardship as a result of the COVID-19 pandemic.”

The Kentucky DFI suggests financial service providers implement policies and procedures to work constructively with customers. Such actions may include the following: 

• restructuring existing loans; 
• extending loan repayment terms; 
• easing terms for new loans; and 
• waiving fees, such as late fees or modification fees. 

For regulatory purposes, DFI will note actions taken to help customers affected by issues related to COVID-19. Financial service providers should identify and monitor accounts and loans, and document any actions taken to assist customers. Other statutory and regulatory requirements regarding loan originations and loan payments remain in effect. 

Under no circumstances should any Kentucky regulated entity accept debit card payments over the phone where customers are requested to provide their pin number. 

EDR – Reporting Mortgages impacted by COVID-19

• Default reason code 032 is currently used to report “Contaminated drywall"; however, is being redefined as “National Emergency Declaration” 
  • Going forward, for a Servicer to notify Freddie Mac of a Borrower whose reason for default is related to contaminated drywall, the Servicer must report this to Freddie Mac using default reason code 011 (“Property problem”)
• Beginning with monthly reporting April 1, 2020, Servicers must begin reporting Default Reason Code 032 for all COVID-19 related hardships on delinquent mortgages, and must not delay reporting during Freddie Mac’s conversion period to change the code name from “Contaminated drywall” to “National Emergency Declaration”
• Servicers must report all COVID-19 related hardships using default reason code 032 instead of reporting the code of the more specific hardship reason
• Servicers must continue to report all applicable default action codes, including code 09 if the Mortgage is on a forbearance plan
• As a reminder, the COVID-19 pandemic is not an eligible disaster and therefore, Servicers must not report default reason code 034 (Eligible Disaster Area)

Property inspections for insurance loss settlements and delinquent Mortgages and property preservation on abandoned properties

• If Serviceers are are unable to complete any required inspection or adhere to any property preservation requirement as a result of the COVID-19 pandemic, that they must document the reason in the Mortgage file and Freddie Mac will consider them to be in compliance with our requirements during this period
• Freddie Mac will notify Servicers when this temporary requirement relief will be discontinued
• NOTE: The Servicer’s inability to complete property inspections due to COVID-19 related impacts must not impact the Servicer’s disbursement of insurance loss proceeds

Property valuations – Mortgage insurance cancellation

• Where the Servicer is unable to fulfill new property valuations using a BPO or appraisal, Servicers must notify the Borrower that it is unable to approve cancellation requests until a property valuation can be completed, and all requirements satisfied 
• Freddie Mac will notify Servicers when this temporary requirement relief will be discontinued
• Mortgage insurance cancellations based on automatic cancellation, and where the Borrower request to cancel is based on the original value, may continue to be fulfilled

Streamlined Flex Modification evaluations for Borrowers with a COVID-19 related hardship

• Borrower must have a COVID-19 related hardship (as described in Bulletin 2019-4)
• Borrower must have been current or less than 31 days delinquent (i.e., must not have missed more than one monthly payment) as of the date of the National Emergency declaration related to COVID-19, March 13, 2020

Outreach and collection techniques

• The Servicer's collection techniques must include the use of: 
  • Telephone contacts or face-to-face interviews 
  • Written communications such as notices and letters 
  • Other responsible collection techniques as permitted under applicable law including, but not limited to, e-mail, text messaging, voice response unit (VRU) technology or a Servicer's web portal 
• If the Servicer discovers that the Borrower's contact information (phone number or mailing address) is invalid, then it should initiate skip trace activities to obtain alternate phone numbers or mailing addresses
• Servicers must continue efforts in order to establish quality right party contact (QRPC)

Annual Reporting Deadline Extension

• The deadline has been extended to April 30, 2020 for reporting the following:
  • Guide Form 16SF, Annual Eligibility Certification Report
  • Audited or reviewed financial statements
  • Annual Document Custodian Eligibility Certification

Use of Electronic Records and Signatures

• Seller/Servicers may currently take full advantage of Electronic Records and Signatures in connection with their origination processes – both with Borrowers and with related third parties, as detailed in Guide Chapter 1401
  • This includes the use of Electronic real estate purchase and sale agreements, as well as Electronic initial and final disclosures often provided at closing
• Seller/Servicers may also use Electronic Signatures and Records as part of the closing process, and, in many instances, to conduct Electronic closings in which even the Note is created and signed electronically (i.e., “eMortgage” closings), as detailed in Chapter 1402
  • In order for eMortgages to be eligible for sale to Freddie Mac, there is a specific approval process the Seller/Servicer must follow, but in most instances such approvals are forthcoming within a week after Seller/Servicer integration with approved systems and the MERS® eRegistry

Business Continuity Plans

• Sellers and Servicers must maintain a business continuity plan in accordance with the requirements in Section 1302.3
• Business continuity plans must support an ongoing ability to conduct business operations in the event of a disaster or other interruption to business operations and processes
• Sellers and Servicers must follow their business continuity plans during the COVID-19 pandemic

Massachusetts Division of Banks (DOB) issued a memorandum to financial institutions, mortgage lenders, and mortgage loan servicers outlining the actions the DOB “fully expects” institutions will take to alleviate the impact of Covid-19 on mortgage borrowers. The actions include (i) postponing foreclosures for 60 days; (ii) forbearing payments for 60 or more days; (iii) waiving fees for late payment and online payment for at least 60 days; (iv) refraining from reporting late payments to credit rating agencies for 60 days; (v) offering an additional 60-day grace period for borrower to complete trial loan modifications; (vi) ensuring borrowers do not experience a disruption of service if a mortgage servicer closes its office; and (vii) proactively reaching out to borrowers to explain the assistance being offered. The memorandum also emphasizes that reasonable and prudent efforts to assist borrowers are consistent with safe and sound banking practices and will not be subject to examiner criticism.

Revised 4/16/2020

The OCCC encourages regulated lenders to carefully consider the following measures during this crisis: 

• Increasing communication with borrowers regarding COVID-19 and the recommended methods for borrowers to contact the lender, especially if the lender has altered operations due to COVID-19. 
• Working out modifications with borrowers to help ensure successful repayment, including deferred or partial payments, which would avoid delinquencies and negative credit reporting. 
• Waiving late charges during the disaster declaration. 
• Waiving deferment charges (in the case of add-on or scheduled installment earnings transactions) or waiving additional finance charge resulting from a deferment (in the case of true daily earnings transactions). 
• Waiving nonsufficient funds fees for dishonored payments or unsuccessful ACH withdrawals. 
• Suspending charging off accounts. 
• Suspending repossessions of collateral and foreclosure of real property. (For certain FHA-insured mortgages, the Department of Housing and Urban Development has placed a moratorium on foreclosures).

Prohibits eviction actions, for 120 days, for residential premises when one of the following circumstances exist and are documented to the landlord or property owner:

• a. The individual is required to be quarantined based on their diagnosis of COVID-19. 
• b. The individual is ordered by a licensed medical professional to self-quarantine based on their demonstration of symptoms as defined by the Centers for Disease Control and Prevention. 
• c. The individual is required to be quarantined based on someone in the home being diagnosed with COVID-19. 
• d. The individual demonstrates that they have a health condition, as defined by the Centers for Disease Control and Prevention, that makes them more at risk for COVID-19 than the average person. 
• e. The individual suffered a substantial loss of income resulting from COVID-19, including: 
  • i. Job loss; 
  • ii. Reduction in compensation; 
  • iii. Closure of place of employment; 
  • iv. Obligation to be absent from work to care for a home-bound school-age child; or 
  •  v. Other pertinent circumstances.

California instructs that certain financial institutions (consisting of nearly 200 federal and state-chartered banks plus credit unions) will offer the following protections:

• 90-day grace period for mortgage payments;

• No negative credit reporting;

• Moratorium on initiating foreclosure sales or evictions for at least 60 days; and

• Waive or refund mortgage-related late fees and early CD-withdrawal fees for at least 90 days.

The Maryland Supreme Court issued a second order, signed March 25, 2020, which rescinded the March 18 Order. This order was entered to expand upon the first order and did three things: 

(1) immediately stayed all proceedings related to foreclosures of residential properties, foreclosures of the rights of redemption of residential properties after a tax sale, executions on residential real property under levy or subject to a lien, and actions for possession of residential properties by ground lease holders pending in the circuit courts; 

(2) immediately stayed all residential eviction matters pending in the District Court of Maryland and all pending residential eviction orders; and 

(3) provided that any and all new actions for foreclosures of residential property, foreclosures of rights of redemption of a residential property after a tax sale, actions for possession of residential properties by ground lease holders, and executions on residential real property under levy or subject to a lien are stayed upon filing.

However, the March 25 Order also permits parties who demonstrate that a delay of a residential foreclosure will place an undue burden on the defendant to file a consent motion to lift stay to allow ratification so long as the consent motion is signed by the defendant. In these cases, the courts shall consider the consent motion on an expedited basis.

Updated 3/25/20:

Attempting to establish QRPC

• Servicers are authorized to use various outreach methods to contact the borrower as permitted by applicable law, including, but not limited to: mail;  email; texting; and voice response unit technology

Reporting a reason for delinquency code

• Servicers must report reason for delinquency code 022, Energy Environment Costs, when reporting the delinquency status of mortgage loans impacted by COVID-19
• For mortgage loans where Servicers would have reported reason for delinquency code 022, Energy-Environment Costs, the servicer must now use reason for delinquency code 007, Excessive Obligations

Property inspections and preservation

• If Servicers are unable to complete a property inspection or property preservation activity in accordance with the Servicing Guide, it must document their efforts and the reason for any exception in the mortgage loan file
  • N O T E : The servicer’s inability to complete property inspections due to COVID-19 related impacts must not impact the servicer’s disbursement of insurance loss proceeds
• As a reminder, Servicing Guide D2-2-10, Requirements for Performing Property Inspections authorizes a curbside (drive-by) inspection if there is potential danger to the inspector
• Additionally, the Property Preservation Matrix and Reference Guide authorizes servicers to utilize alternative data or other means available to determine occupancy status when inspection results are unknown due to lack of access

Obtaining valuations associated with MI termination requests

• If a BPO or appraisal is required to verify the current value of the property, the servicer must notify the borrower that it will be unable to approve the termination request until the BPO or appraisal is completed (along with all other requirements for terminating the mortgage insurance being satisfied)

Submission of financial statements and reports

• Sellers/Servicers who must submit financial statements and the Lender Record Information (Form 582) within 90 days after the end of their fiscal year will now have an extension to April 30, 2020

On March 27, 2020, the Massachusetts Attorney General filed an emergency regulation interpreting the Massachusetts Consumer Protection Act, M.G.L.  Chapter 93A, to address certain practices by creditors and debt collectors that it has determined to be unfair and deceptive under present circumstances.  On April 3, 2020, the the Massachusetts Office of Attorney General issued FAQs clarifying the following:  the Massachusetts emergency regulation only restricts telephone calls to consumers; the Massachusetts emergency regulation does not restrict the use of text messages and email to communicate with a debtor; and first-party service providers collecting on behalf of creditors in the creditor’s name are subject to the emergency regulation’s call restriction but creditors collecting their own debts, in their own names, and using their own employees are not.

On March 27, 2020, the Massachusetts Attorney General filed an emergency regulation interpreting the Massachusetts Consumer Protection Act, M.G.L.  Chapter 93A, to address certain practices by creditors and debt collectors that it has determined to be unfair and deceptive under present circumstances.  On April 3, 2020, the the Massachusetts Office of Attorney General issued FAQs clarifying the following:  the Massachusetts emergency regulation only restricts telephone calls to consumers; the Massachusetts emergency regulation does not restrict the use of text messages and email to communicate with a debtor; and first-party service providers collecting on behalf of creditors in the creditor’s name are subject to the emergency regulation’s call restriction but creditors collecting their own debts, in their own names, and using their own employees are not.

Effective immediately (March 27, 2020) and for a period of 60 days.

Residential Appraisal Reports – Existing Dwelling

• For purchase and non-streamlined refinance transactions, when an appraiser is unable to complete an interior inspection of an existing dwelling due to concerns associated with the COVID-19 pandemic, an “Exterior-Only Inspection Residential Appraisal Report”, (FHLMC 2055/FNMA 2055) will be accepted. 
• In such cases, appraisers are not required to certify that the property meets HUD HB 4000.1 standards. The appraisal must be completed in accordance with the Uniform Standards of Professional Practice (USPAP) and the Uniform Appraisal Dataset (UAD).
• This exception is not applicable to new construction properties or construction to permanent loans. As a reminder, appraisals are not required for streamlined and streamlined-assist refinance transactions.

Repair Inspections – Existing Dwelling

• Loans for which a completion certification is not available due to issues related to the COVID-19 pandemic, a letter signed by the borrower confirming that the work was completed is permitted. 
• Lenders must also provide further evidence of completion, which may include photographs of the completed work, paid invoices indicating completion, occupancy permits, or other substantially similar documentation. 
• All completion documentation must be retained in the loan file. 
• This exception is not applicable to rehabilitation and repair loans noted in section 12.28 of HB-1-3555.

Verbal Verification of Employment

• Lenders must document and verify the borrowers annual and repayment income in accordance with Agency regulations. 
• Lenders should use due diligence in obtaining the most recent income documentation to reverify the borrowers repayment ability prior to closing. 
• When the lender is unable to obtain a Verbal Verification of Employment (VVOE) within 10 business days of loan closing due to a temporary closure of the borrower’s employment, alternatives should be explored. 
  • For example, email correspondence with the borrower’s employer is an acceptable alternative to a VVOE. 
• If the lender is unable to obtain a VVOE or acceptable alternative, the requirement will be waived when the borrower has a minimum of 2 months cash reserves.
• In the case of a reduction of income, the borrower’s reduced income must be sufficient to support the new loan payment and other non-housing obligations. 
• Borrower’s with no income at the time of closing are not eligible for SFHGLP loans regardless of available cash reserves.

Temporary Waiver Provides Mailing Alternative for Condominium Project Approval Application Packages 

Submitters should create a PDF file of the package and send it via email to the FHA Resource Center at answers@hud.gov. The email “Subject Line” should read “Condominium Project Approval Application Package”. Upon receipt, FHA Resource Center staff will forward the package to the appropriate FHA Homeownership Center where it will be reviewed. 

The email attachment should contain a single PDF file not to exceed 32 MB. Files larger than 32 MB must be emailed separately and each email should also include a brief project name and the total number of emails being submitted (e.g., “Towne Centre 1 of 3”). This process applies to the submission of Condominiums for Project Approval and does not affect the requirements for Single-Unit Approval as outlined in ML 2019-13. 

The Federal Housing Administration (FHA) issued a waiver of its Single Family Housing Policy Handbook 4000.1 (SF Handbook) policy to temporarily suspend the requirement that FHA roster appraisers must complete damage inspection reports for properties pending sale or endorsement in Presidentially-Declared Major Disaster Areas (PDMDAs) associated with COVID-19. This waiver of SF Handbook policy is effective immediately.

Updated Single Family COVID-19 Q&A Posted

FHA continues to revise its FHA Single Family COVID-19 Q&A as needed to keep stakeholders updated with the latest information about FHA’s response to the Presidentially-declared COVID-19 national emergency. Refer to the Single Family main page on hud.gov for updates.

Re-verification of Employment and Exterior-only and Desktop-only Appraisal Property Inspections Protocols

1. Changes to FHA’s re-verification of employment: 

• FHA is allowing flexibilities related to the Mortgagee’s process of completing re-verification of employment, which includes verbal verification of employment. This is applicable for all FHA Title II forward and reverse mortgage programs, where re-verification of employment is required. 

2. Changes to FHA’s Appraisal Protocols are as follows: 

• Most Single Family forward and HECM for Purchase transactions may utilize an optional Exterior-Only or Desktop-Only Appraisal inspection scope of work. 

• Traditional HECM, HECM-to-HECM refinances, Rate and Term Refinances and Simple Refinances of properties may utilize an optional Exterior-Only inspection scope of work. 

• All appraisals made in connection with the servicing of FHA’s forward or reverse mortgage portfolios may utilize either the Exterior-Only or Desktop-Only Appraisal inspection scope of work. 

• No changes are made to Streamline Refinances, which do not require appraisals or to the appraisal requirements for FHA’s CashOut refinance, 203(k), and certain purchase transactions.

Section 4021 of the CARES Act amends Section 623(a)(1) of the Fair Credit Reporting Act (15 U.S.C. 1681s–2(a)(1) to provide certain credit reporting protect for consumers affected by COVID-19

• If a furnisher makes an accommodation with respect to 1 or more payments on a credit obligation or account of a consumer, and the consumer makes the payments or is not required to make 1 or more payments pursuant to the accommodation, the furnisher shall—  
  • ‘‘(I) report the credit obligation or account as current; or  
  • ‘‘(II) if the credit obligation or account was delinquent before the accommodation—  ‘‘(aa) maintain the delinquent status during the period in which the accommodation is in effect; and  ‘‘(bb) if the consumer brings the credit obligation or account current during the period described in item (aa), report the credit obligation or account as current.  
  • ‘‘(iii) EXCEPTION.—Clause (ii) shall not apply with respect to a credit obligation or account of a consumer that has been charged-off.’’.

Effective for all loans closed on, or after, the date of this Circular (March 27, 2020) and until further notice or the rescission of this Circular.

Action: VA will change the long-standing practice of requiring access to the interior of the home for certain types of loans and characteristics of those loans.  Appraisers will still follow the same procedures of the VA appraisal process and are still required to meet USPAP and state requirements for delivering an appraisal that meets those qualifications, but are allowed the broader use of exterior inspection.

• Valuations may come in a form of an Exterior-Only appraisal with enhanced assignment conditions or in limited instances, a Desktop appraisal. 
• On page 1 of the Uniform Residential Appraisal Report (URAR), Subject section, “Map Reference” appraisers are to state “Exterior-Only” or “Desktop.” 

Interior Inspections: The appraiser will continue to gain access to view the interior property in the instances outlined below.

• Purchase Transaction (vacant property). When the appraiser’s assigned geographic jurisdiction does not have restrictions imposed by authorities prohibiting individuals leaving their domicile, such as mandatory quarantine or shelter-in-place.
• Purchase or Refinance Transaction (property occupied). When the appraiser’s assigned geographic jurisdiction does not have restrictions imposed by authorities prohibiting individuals leaving their domicile, such as mandatory quarantine or shelter-in-place. In addition, all parties must agree to the interior inspection and meet specified requirements (see Circular for complete details)

Exterior Only Appraisals: This report option with enhanced assignment conditions will be completed on the FNMA 2055/1075 URAR form. For manufactured homes and multi-unit (2-to-4 unit) properties, appraisers will use the 1004C or 1025 form. Appraisers are to boldly and inconspicuously state “Per Department of Veterans Affairs, no interior inspection was provided due to COVID-19.” Exterior-Only Appraisal with enhanced assignment conditions will be limited to the maximum 2020 Freddie Mac Conforming Loan Limit for a one-unit limit for the county or county-equivalent area. (see Circular for complete details)

Liquidation and Servicer Appraisal Processing Program (LGI/SAPP). Effective immediately, all liquidation reports will be completed on a Freddie Mac Form 2055, Exterior Only Inspection Residential Appraisal Report. The appraiser can complete the exterior appraisal as they have historically without the need for enhanced assignment conditions outlined above. (see Circular for complete details)

Reconsideration of Value. In times of uncertainty, the housing market strengths may be less predictable to report. Appraisers will have comparable sales that took place prior to the President declaring a national emergency and active and pending sales can be less predictable. During this time, it is important to ensure that Veterans continue to be able to purchase a home. VA, the lender, and the appraiser will work together during this time to assist in the best possible outcome for the Veteran. (see Circular for complete details)

Memorandum of Values. In extreme cases when an appraiser is not available to complete an appraisal assignment for a purchase, VA has the authority and ability to issue a Memorandum of Value (MOV). This will be completed on a case-by-case basis. 

Renovation and Repair Loans. Appraisers are to suspend any renovation and repair assignments until further notice.

Repair Inspections. Due to the lack of verification of completion by the appraiser or inspector that repair items have been completed, lenders have one of the two following options to supply to VA. (see Circular for complete details)

Termite Inspections. VA Pamphlet 26-7, Chapter 12 Minimum Property Requirements (NEW), Section 33, Topic b, requires a wood inspection report if the property is located in an area on the Termite Infestation Probability Map where the probability of termite infestation is "very heavy" or "moderate to heavy”. If there is no known or visible evidence of termite infestation present, the seller and realtor must provide a certification to that fact. If there is known or visible evidence of termite infestation, a clear termite report must be provided within one year of close of escrow. 

Any additional NOV conditions. Any additional items that need to be met on the NOV to comply with VA requirements will have to be met in 180 days from the date of the NOV issuance. All conditions must be completed before the loan will be guaranteed by VA. The Veteran must acknowledge and accept any and all conditions not met prior to closing.

Appraiser Information. The appraiser defines the scope of the work and they must have enough information to provide a creditable report. The appraiser will need to rely upon all publicly discoverable records, MLS photos and commentary, real estate professionals and homeowners. It is imperative this information is documented and retained. Key items that may impact market value should be noted in the appraisal report with details about what was provided and by whom. When relying upon photos provided by another party or from the MLS, it should be noted in the report. When the appraiser believes that the assignment is too complex to be completed by a Desktop or Exterior-Only appraisal, the appraiser is to contact the RLC and the lender to place the assignment on hold.

Communication. To keep Veterans and appraisers safe while continuing the mission of the VA Home Loan program, communication between the Veteran, lender, appraiser and other stakeholders is key during this time. Below is the guidance being provided.  (see Circular for complete details)

Fees. Fees for services will remain as posted at  https://www.benefits.va.gov/HOMELOANS/appraiser_fee_schedule.asp. Fees for Exterior Only appraisal with enhanced assignment conditions or a Desktop appraisal will remain the same as an Interior appraisal. VA may require appraisers to complete a 1004D appraisal update within one year of completing an Exterior-Only or Desktop appraisal under the same fee payment.

Effective for all loans closed on, or after, the date of this Circular (March 27, 2020) and until further notice or the rescission of this Circular.

Timeline to Request Evidence of Guaranty (Loan Guaranty Certificate). VA understands that lenders may experience operational delays as a result of COVID-19. Such issues may affect the lender’s ability to request the Loan Guaranty Certificate, in WebLGY, within 60 days of closing per 38 C.F.R. § 36.4303.

a. Lenders are reminded that justification for the delay must be provided when requesting the Loan Guaranty Certificate. Justifications should be uploaded to the Correspondence section of WebLGY. For additional guidance when providing justification, please refer to Pamphlet 26-7, Chapter 5, Section 4, Topic b.

b. If the delay was related to COVID-19, the justification should include this information, so the delay does not adversely impact the lender’s good standing. As a reminder, per 38 C.F.R. § 36.4313, lenders are required to remit funding fees within 15 days of loan closing.

Effective for all loans closed on, or after, the date of this Circular (March 27, 2020) and until further notice or the rescission of this Circular.

Lien Position. VA acknowledges the closure of some local Recording Offices may result in the inability to record liens in a timely manner. In certain jurisdictions, lien position is strictly determined by recordation date. Extended closures could result in the inability to appropriately record the first lien position of VA Home Loans, as stated in 38 U.S.C § 3703(d)(3) and 38 C.F.R. § 36.4355.

a. In instances where the VA loan was not initially in first lien position, and the holder was subsequently able to secure first lien position, the loan may later be submitted for guaranty. VA will exercise all discretion under existing authorities to provide every opportunity to the lender to secure guaranty. 

b. As a reminder, VA can only issue evidence of guaranty for loans in first lien position. The inability to secure first lien position may result in the removal of the VA Guaranty or Indemnification for the life of loan.

Effective for all loans closed on, or after, the date of this Circular (March 27, 2020) and until further notice or the rescission of this Circular.

Electronic Mortgages (eMortgages), Electronic Notes and the use of Allonges. VA anticipates an increase in eMortgages consistent with VA’s longstanding policy, established in VA Pamphlet 26-7, Chapter 9, Legal Instruments, Liens, Escrows, and Related Issues. VA is actively working with other federal housing agencies and Government National Mortgage Association (GNMA) to increase the accessibility of eMortgages. Lenders are reminded to comply with investor and/or GNMA guidance. It is important to clarify that an eMortgage package may or may not include an electronic note (eNote). VA loans for which the promissory note is an eNote are eligible for guaranty.

a. Promissory Note Requirements. eClosing transactions, for all closings executed as of the date of this Circular may not include the use of an allonge. Any eClosing transaction including the use of an allonge is ineligible for guaranty and subject to the removal of the guaranty. While VA does not publish a standard Note or eNote as a template, VA encourages industry and technology partners alike, to review eNote templates to remove clauses referencing the possible inclusion of allonge. 

(1) Closings transactions including allonge(s), that would otherwise modify the terms of an eNote, are required to be closed using traditional, paper-based closing procedures. eClosings transactions are permissible for both, mortgages where the resulting promissory is an eNote and mortgages where the resulting promissory note is a paper note bearing a wet signature. 

b. Electronic Notarization. VA loans for which electronic notarization was used as a part of an eClosing, including in-person electronic notarization (IPEN) and remote online notarization (RON) are eligible for guaranty provided that the notarization is valid and effective under applicable law and regulations.

Effective for all loans closed on, or after, the date of this Circular (March 27, 2020) and until further notice or the rescission of this Circular.

Underwriting Loans. For income analysis purposes, as outlined in VA Pamphlet 26-7, Chapter 4 Credit Underwriting, VA guidelines generally require income to be stable and reliable for 2 years. 

a. If the applicant was impacted by COVID-19 (i.e. furlough, curtailment of income, etc.),that period should not be considered a break in employment or income provided they have returned, or are anticipated to return, to work in the same capacity and income levels. In addition to standard verification documentation, applicants should provide furlough letters where applicable. 

b. VA continues to encourage lenders to take proactive measures in documenting and uploading evidence of their analysis and justifications for all borrowers, especially for “borderline” cases. This may proactively address questions that VA may otherwise ask and prevent a loan level audit of that loan.

Effective for all loans closed on, or after, the date of this Circular (March 27, 2020) and until further notice or the rescission of this Circular.

Income Verification Guidelines. Lenders should continue to use good judgment and flexibility when verifying stable and reliable income. Lenders should make every effort to satisfy VA’s longstanding requirements concerning Verification of Employment (VOE) as outlined in the VA Pamphlet 26-7, Chapter 4 Credit Underwriting.

a. If their propriety method is impacted due to temporary business closures, the lender should use the guidelines listed below.

• (1) The lender may utilize employment and income verification third-party services. Additional fees associated with these services cannot be charged to the Veteran, as stated in VA Pamphlet 26-7, Chapter 8, Section 2 Fees and Charges the Veteran-Borrower Can Pay.
• (2) If the lender is not able to utilize a third-party service to verify employment and income, a VOE can be met with evidence of direct deposit from a bank statement and paystubs covering a at least one full month of employment within 30 days of the closing date. Lenders should reconcile payment amounts between the paystubs and direct deposit listed on the bank statement.
• (3) If the required VOE documentation cannot be obtained by evidence of bank statement and paystubs, and the borrowers have cash reserves totaling at least 2 months mortgage payments (PITI) post-closing, the loan is eligible for guaranty. The lender’s effort to obtain the VOE must be documented in the Correspondence section of WebLGY.

b. In the event lenders utilize option (2) or (3) as verification, they must document in box 47 of the remarks section on VA Form 26-6393, Loan Analysis, the option they selected and the supporting documentation.

Mortgagees are prohibited from commencing a civil action to foreclose upon real estate and from requesting or scheduling a sheriffs sale of the mortgaged premises. Sheriffs may not conduct sheriff’s sales of mortgaged premises nor may sheriffs act on any order of foreclosure or execute any writ of assistance related to foreclosure. Nothing in this Order shall be construed to affect the ability to commence a civil action to foreclose upon real estate under Section 846.102 of the Wisconsin Statutes.

Governor Murphy announced an initiative between the State of New Jersey and financial institutions that agreed to provide residential mortgage relief for homeowners in New Jersey. New Jerseyans who are struggling with the COVID-19 crisis may be eligible for the following relief upon contacting their financial institution:

• Ninety-day grace period for all mortgage payments;

• Relief from fees and charges for 90-days;

• No new foreclosures for 60-days;

• No credit score changes for accessing relief

• Improvements to Loan Product Advisor® feedback messaging for our asset and income modeler (AIM) income offerings – March 29, 2020

• Updates to rental income requirements

• Revisions to our verification of employment requirements for Mortgages using Leave and Earnings Statements

FEMA is extending the grace period for National Flood Insurance Program (NFIP) renewals from 30 to 120 days applicable to NFIP flood insurance policies with an expiration date between February 13, 2020 and June 15, 2020.

The Emergency Directive places a moratorium on all evictions in the State of Nevada, that is in effect through the duration of the State of Emergency. This includes the prohibition on lockouts, notices to quit or pay, or eviction filings for as long as we are in a state of emergency.  This applies to residential tenants. It also applies to commercial evictions in order to assist small businesses who may be fearful that their businesses will be shuttered by their landlords before they are given the opportunity to recover.

The only exception to this rule is that landlords can continue to evict dangerous tenants who pose a threat to other residents, the public, or their property.

This directive does not constitute free rent or mortgage and does not end all the contractual obligations.

Commerce encourages financial institutions to work with affected customers/members and communities. Commerce recognizes that such efforts serve the long-term interests of communities and the financial system when conducted with appropriate management oversight and consistent with safety and soundness of the financial industry and applicable laws. These efforts may include, but are not limited to:

• Waiving certain fees, such as:

o Automated teller machine (ATM) fees for customers and non-customers, o Overdraft fees,

o Late payment fees on credit cards and other loans, and o Early withdrawal penalties on time deposits;

• Increasing ATM daily cash withdrawal limits;

• Easing restrictions on cashing out-of-state and non-customer checks;

• Increasing credit card limits for creditworthy borrowers; and

• Offering payment accommodations, such as allowing borrowers to defer or skip some payments or extending the payment due date, which would avoid delinquencies and negative credit bureau reporting caused by COVID-19-related disruptions.

Commerce emphasizes that prudent efforts to modify the terms on existing loans for affected customers/ members will not be subject to examiner criticism. 

• Banks and credit unions should work constructively and proactively with affected borrowers and other customers in the best interests of the borrowers, the financial institutions, and the Illinois economy
• Such efforts should be consistent with safe and sound practices and
  applicable laws, including consumer protection laws. Prudent efforts to help consumers and businesses will not be subject to examiner criticism
• The Department supports Illinois banks and credit unions that choose to use their capital and liquidity buffers to lend and undertake other supportive actions in a safe and sound manner
• The Department urges Illinois banks and credit unions to provide borrowers directly and indirectly affected by the COVID-19 pandemic with payment accommodations that facilitate their ability to work through short-term setbacks caused by the impact of the pandemic
• Banks and credit unions are especially encouraged to respond to borrowers from industry sectors particularly vulnerable to the volatility of the current economic environment as well as to work with small businesses, hourly workers, and independent contractors that have less financial flexibility to weather the economic decline
• Whatever accommodation a bank may provide, it should be mindful of applicable consumer protection laws regarding changes in loan terms, adequately documenting and accounting for any accommodation provided, and otherwise acting prudently

In addition to working with borrowers, the Department urges banks and credit unions to constructively and proactively respond to their customers and communities impacted by the COVID-19 pandemic, including by: 

• Waiving certain fees, such as: 
  • Automated teller machine (ATM) fees for customers and non-customers, 
  • Overdraft fees,  
  • Late payment fees on credit cards and other loans, and 
  • Early withdrawal penalties on time deposits; 
• Increasing ATM daily cash withdrawal limits; 
• Easing restrictions on cashing out-of-state and non-customer checks; 
• Increasing credit card limits for creditworthy borrowers; 
• Offering payment accommodations, such as allowing borrowers to defer payments at no cost, extending the payment due dates or otherwise adjusting or altering terms of existing loans, which would avoid delinquencies, triggering events of default or similar adverse consequences, and negative credit agency reporting caused by COVID-19 related disruptions; 
• When payments are deferred or modified, coding those payments as deferred with the applicable disaster code to the credit rating agencies; 
• Providing new loans on favorable terms; 
• Ensuring that consumers and small businesses do not experience a disruption of service if financial institutions close their offices, including making available other avenues for consumers and businesses to continue to manage their accounts and to make inquiries; 
• Alerting customers to the heightened risk of scams and price gouging during the COVID-19 disruptions, and reminding customers to contact their financial institutions before entering into unsolicited financial assistance programs; and 
• Contacting customers via app announcements, text, email or otherwise to explain the above listed assistance being offered to customers

Servicers should identify and implement fair and prudent actions, subject to the requirements of any guarantee or insurance programs, to support those mortgage borrowers unable to make timely mortgage payments as a result of the pandemic.

In addition to the provisions provided by the federal agencies and GSEs, the Department urges all servicers of nonconforming and private mortgages to implement policies at least as helpful to borrowers as those offered for conforming loans, including, but not limited to, the following:

• Forbearing mortgage payments for at least 90 days without incurring additional interest or fees;
• Refraining from reporting late payments to credit rating agencies, and when payments are deferred or modified, coding those payments as deferred with the applicable disaster code; 
• Offering mortgage borrowers an additional 90-day grace period to complete trial loan modifications, and ensuring that late payments during the COVID-19 pandemic do not affect their ability to obtain permanent loan modifications; 
• Offering other loss mitigation options to mortgage borrowers, including those that help borrowers stay in their homes at affordable payments; 
• Waiving late payment fees and online payment fees for a period of at least 90 days and, for mortgage borrowers in a forbearance plan, during the period of forbearance; 
• Postponing foreclosures and evictions for at least 90 days;  
• Contacting mortgage borrowers on automatic payment plans to see if they need to temporarily suspend those payments and, if so, grant any such requests without delay and place the mortgage borrower in a forbearance program as discussed above;
• Ensuring borrowers do not experience a disruption of service if the mortgage servicer reduces staffing or closes an office, including making available other avenues for borrowers to continue to manage their accounts and to make inquiries; and 
• Contacting borrowers via app announcements, text, email or other effective means to explain the assistance being offered to them. 

• All sellers/servicers, including those not subject to the anti-money laundering provisions of the Bank Secrecy Act (BSA), must now report loan-level instances of suspicious activity using the self-report functionality in Loan Quality Connect.

• All sellers/servicers, including those not subject to the anti-money laundering provisions of the Bank Secrecy Act (BSA), must now report loan-level instances of suspicious activity using the self-report functionality in Loan Quality Connect.

This Bulletin provides:

• Temporary requirements related to credit underwriting
• Temporary appraisal flexibilities for new construction properties
• Information related to CHOICERenovationSM Mortgages
• Temporary flexibilities for GreenCHOICE MortgagesSM
• Temporary guidance related to acceptable uses of a power of attorney for refinance transactions
• Guidance related to acceptable uses of Remote Online Notarizations
• Temporary guidance on the use of e-mail signatures in transactions with Freddie Mac
• A reminder on the use of "wet" signatures on Notes
• Temporary changes to Seller's in-house quality control requirements

Please see bulletin for complete details.

This updated version of the Lender Letter provides information about the following:

• Age of documentation: modifying our age of document requirements from four months to two months for most income
  and asset documentation. 
• Verification of self-employment: requiring lenders to confirm the borrower’s business is open and operating within 10 business days of the note date 
• Market-based assets: updating policies for use of stocks, stock options, and mutual funds for down payment, closing cost costs, and reserves 
• Powers of attorney: providing flexibilities for use of a power of attorney 
• Remote online notarization: providing expansion of the use of remote online notarization 
• Lender quality control requirements: allowing post-closing reverifications to occur verbally or electronically, and other flexibility related to the field review of appraisals 

See Lender Letter for complete details.

Additions to Lender Letter on March 31, 2020 

• Flexibilities for new construction loans: adding additional options for documentation including the use of two new certification templates 
• Flexibilities for HomeStyle® Renovation loans: providing options for inspection requirements for draws

See FAQs here

The Oklahoma State Banking Department issued COVID-19 FAQs for Financial Institutions, including: 

1. Working with Borrowers.  What are your suggestions for avoiding criticism at future examinations with regard to efforts taken during the next few weeks and months to assist our borrowers?

The most important thing at this point is to document the credit file as much as possible, outlining the situation with the borrower and the action taken by the institution. Additional support for your decisions could include industry metrics, which measure economic impacts on specific business lines and support credit actions taken with an affected segment of the loan portfolio.  The objective is to support the credit decision like any other, explaining how the accommodation is in the best interest of not only the borrower, but also the institution.  Supporting documentation may even be added as the credit (and crisis) progresses since it is more important to address immediate customer needs during this time.