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Iowa Division of Credit Unions publishes comprehensive resource for Covid-19 updates
The Iowa Division of Credit Unions published a comprehensive resource containing information on Covid-19 regulatory updates. The document covers a range of regulatory changes applicable to credit unions, including: (i) the SBA-Paycheck Protection Program; (ii) Annual Meeting requirements; (iii) foreclosure moratoriums; (iv) remote notarizations; (v) member assistance; (vi) fraud awareness; (vii) moneys and credits tax filing deadline extensions (viii) loan deferments; and (ix) limitations of services/branch closures.
NCUA issues summary of CARES Act provisions impacting credit unions
In April, the NCUA issued guidance to federally insured credit unions providing a summary of provisions of the Coronavirus Aid, Relief, and Economic Security (CARES) Act that impact credit unions. Such provisions touch upon the Central Liquidity Facility, insured deposits thresholds, temporary relief from troubled debt restructurings, the Paycheck Protection Program, optional temporary relief from current expected credit losses, credit protection during Covid-19, and foreclosures of certain mortgages.
NCUA provides guidance regarding Small Business Administration loan programs
In April, the NCUA issued guidance to federally insured credit unions regarding the U.S. Small Business Administration’s (SBA) loan programs to help small businesses. The guidance provides an overview of the Paycheck Protection Program, including eligibility criteria for both lenders and borrowers, loan terms, loan forgiveness, and lender compensation. The guidance provides that the NCUA will not criticize credit unions’ good faith efforts to prudently use the SBA programs with members affected by Covid-19.
Maine governor issues order and guidelines regarding temporary suspension of in-person notary requirements
On April 8, Maine Governor Janet Mills issued an executive order temporarily suspending certain in-person notarization requirements due to the Covid-19 crisis. The order details the requirements for remote notarization, including use of two-way, audio-video communication technology, and recording requirements. Governor Mills’ order is set to terminate 30 days after termination of the Covid-19 state of emergency, unless otherwise amended.
Nevada governor issues guidance for essential businesses
On April 8, the Nevada governor issued Emergency Directive 013 requiring essential businesses to implement measures to ensure social distancing. Among other guidance, the directive provides that open house showings, and in-person showings of single family and multi-family residences currently occupied by renters of real estate on the market for sale, are hereby prohibited but use of existing three dimensional interactive property scans, virtual tours, and virtual staging to showcase a property are still permitted.
Freddie Mac updates Covid-19 servicing guidance
On April 8, Freddie Mac updated previous guidance to servicers relating to working with borrowers impacted by Covid-19. Among other things, the guidance: (i) requires servicers to report activity to the credit bureaus for borrowers impacted by Covid-19; (ii) suspends all foreclosure actions, including initiation of the foreclosure process; (iii) waives milestone timelines for filing motions for relief from automatic stay in bankruptcy cases; (iv) waives requirements that forbearance cannot extend a delinquency beyond 12 months; (v) confirms that servicers must send the borrower the forbearance plan agreement to reflect the terms of the Covid-19 forbearance; and (vi) requires servicers to make good faith efforts at quality right party contact to evaluate the borrower for a forbearance plan. The guidance also clarifies that servicers should not submit disaster reporting codes for Covid-19 related issues, stating that Freddie Mac will continue to address the Covid-19 pandemic as unique and distinct from other “eligible disaster” provisions in the Freddie Mac guides.
Minnesota governor extends stay at home order
On April 8, Minnesota governor issued an executive order extending the previously issued stay at home order to May 3, 2020. Minnesota also issued guidance regarding the business exemptions. Financial services, notaries, and real estate transactions are considered critical sectors, but, debt collection professionals and other workers supporting debt collection are not.
Fannie Mae revises multifamily loan documents requiring escrow reserves
On April 8, Fannie Mae announced updates to certain loan documents for multifamily lenders in response to Covid-19. Form 6102.25—Modifications to Multifamily Loan and Security Agreement—Addenda to Schedule 2, and Form 6268—Modifications to Multifamily Loan and Security Agreement (Additional Reserve Escrows) are both updated to provide clarity in the drafting notes for calculating the replace reserve deposit when closing a supplemental mortgage loan. In addition, as a condition to closing a supplemental mortgage loan with required reserve escrows, the guidance clarifies that an additional principal and interest reserve escrow is required on the pre-existing mortgage loan. Loan documents may be modified to include a higher amount of reserves (not greater than 10% of the unpaid principal balance of the loan), or hold the escrows in a non-interest bearing account to the extent permitted by law.
Fannie Mae updates Covid-19 servicing guidance
On April 8, Fannie Mae updated its guidance to single-family servicers regarding the impact of Covid-19 on servicing. In particular, the guidance revises prior guidance on offering forbearance plans to comply with the recent enactment of the federal CARES Act. Among the updates to the servicer guidance are: (i) clarifying responsibilities relating to achieving “quality right party contact” for borrowers in a forbearance plan; (ii) providing a specific delinquency code for use in reporting to Fannie Mae; (iii) granting flexibility for inspections; (iv) extending deadlines for submission of financial statements and Form 582 to April 30; (v) clarifying forbearance plan terms; (vi) eliminating the requirement that the servicer determine occupancy status prior to evaluating a borrower for a workout option; (vii) requiring that the servicer comply with FCRA and report borrowers affected by Covid-19; and (viii) requiring servicers to suspend all foreclosure related activities to comply with the CARES Act and suspend filing motions for relief in bankruptcy cases.
Texas regulator, industry groups warn of increased cyber risk
On April 8, the Texas Department of Banking, the Independent Bankers Association of Texas and the Texas Bankers Association issued a joint notice warning that cybercriminals and nation state actors use times of crisis to exploit financial institutions. The notice urged institutions to warn employees and customers of social engineering, remind them of when online/virtual meeting platform links are expected and legitimate, and inform them of scams that are preying on Covid-19 fears. The notice also suggested institutions redistribute IT policies to employees and remind them about security expectations, and maintain secure connections for remote workers.