Like our clients, Holland & Knight's Financial Services Industry Group is committed to actively contributing to our nation's response to the coronavirus (COVID-19) pandemic and related economic fallout and recovery efforts. For our part, Holland & Knight's 300-plus lawyers and professionals who comprise our Financial Services Industry Group want to ensure that bank and non-bank financial institutions, financial intermediaries and other financial services industry participants and stakeholders have access to timely, accurate and succinct updates on federal and state legislative, regulatory and administrative responses to the COVID-19 pandemic that are most relevant to our financial services clients.
To that end, we are pleased to share with you the latest edition of The RESPONSE.
FHFA Aligns Fannie Mae with Freddie Mac's 4-Month Advance Obligation Limit
The Federal Housing Finance Agency (FHFA) has changed Fannie Mae's policy requiring servicers to advance principal and interest payments, irrespective of borrower payments, for mortgage loans in mortgage backed securities (MBS). The Fannie Mae policy will now match Freddie Mac requirements to provide such advance payments for only four months. The FHFA has also instructed Fannie Mae and Freddie Mac to keep mortgage loans under a COVID-19 forbearance in MBS pools for at least the period of the forbearance plan.
Fannie Mae and Freddie Mac to Purchase Qualified Mortgage Loans in Forbearance
The FHFA has announced that certain single-family mortgages meeting specific eligibility criteria can be purchased by Fannie Mae and Freddie Mac despite the fact the mortgage loans may be in forbearance. The FHFA made this decision in recognition of the fact that many newly closed loans entered forbearance due to the COVID-19 pandemic, and the move is intended to maintain liquidity in the mortgage markets.
Federal Banking Regulators Announce Technical Corrections to Rule on CECL Transition
The Federal Deposit Insurance Corporation (FDIC), Office of the Comptroller of the Currency (OCC) and Board of Governors of the Federal Reserve (Federal Reserve) have published technical corrections to the Interim Final Rule issued March 31, 2020, regarding the transition period for the adoption of the current expected credit loss (CECL) methodology. Among other items, the corrections clarify 1) that changes to the calculation of the supplementary leverage ratio are applicable to all banking entities that are required to comply with the supplementary leverage ratio requirements and 2) that electing banking entities should calculate each transitional amount as a positive or negative number where there is a day-one change for retained earnings, temporary difference deferred tax assets and credit loss allowances.
Banker Webinar on Becoming a PPP Lender Set for Today
The FDIC, OCC, Federal Reserve and National Credit Union Administration (NCUA) will host a webinar from 11 a.m. to noon EDT on April 23, 2020, for bankers to hear directly from U.S. Small Business Administration (SBA) officials on how to become a lender for the Paycheck Protection Program (PPP). The webinar is geared toward lenders who are not currently SBA lenders. Participants must register for the webinar at the link provided.
Massachusetts Joins Multi-State Initiative for COVID-19 Related Student Loan Relief
The Massachusetts Division of Banks has joined at least eight other states (including California, Colorado, Connecticut, Illinois, New Jersey, Vermont, Virginia and Washington) and private student loan servicers to provide relief to COVID-19 affected student loan borrowers not covered by the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). Relief options for qualifying borrowers include a 90-day forbearance, waiving of late fees and no negative credit reporting.
New York DFS Superintendent Emphasizes Need to Provide Relief to Main Street
New York Department of Financial Services (NYDFS) Superintendent Linda Lacewell published an op-ed in which she stresses the need for relief programs to reach individual households and small businesses. She argues that this requires providing protections against garnishment and setting up relief program structures that benefit small businesses over wealthy corporations.
Originally Published 23 April, 2020
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