On August 10, 2021, the CFPB’s Office of Supervision Policy published a report titled Mortgage Servicing COVID-19 Pandemic Response Metrics: Observations from Data Reported by Sixteen Servicers (“Servicing Metrics Report”). Although the Servicing Metrics Report doesn’t allege any compliance deficiencies in the servicers’ performance, the topics addressed in the report and the CFPB’s accompanying press release indicate areas of focus for the CFPB, and servicers should take note.
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COVID-19
Federal Student Loan Moratorium Extended Until January 31, 2022
On August 6, 2021, the U.S. Department of Education announced that it would extend the moratorium on federal student loan payments until January 31, 2022. According to the Department’s press release, this will be the final moratorium extension.
As we discussed back in 2020, the CARES Act provided temporary financial relief to federal student loan…
Federal Reserve Releases TALF FAQs: Here are the Highlights
On May 12, 2020, the Federal Reserve published updates to the term sheet for the Term Asset-Backed Securities Loan Facility (the TALF), and FAQs regarding the TALF, including additional details regarding borrower and collateral eligibility.
Read more at Mayer Brown’s Retained Interest blog.
CFPB Issues Guidance for Transfers of Residential Mortgage Servicing
Against the backdrop of the COVID-19 pandemic and the economic stress it is imposing on residential mortgage borrowers, lenders and servicers, the Consumer Financial Protection Bureau recently released a compliance bulletin and policy guidance regarding the handling of information and documents in mortgage servicing transfers. While not specifically motivated by the COVID-19 crisis, Bulletin 2020-02…
Private Student Loan Servicers Partner with Nine States to Provide Relief to Borrowers Impacted by COVID-19
The COVID-19 national emergency has caused unprecedented economic disruption. The federal government was quick to enact relief measures for federal student loan borrowers who may be experiencing financial hardship as a result of the pandemic. Last week, nine states announced a coordinated effort to partner with private student loan servicers and offer relief for private…
Fannie and Freddie to Relax Servicer Advance Requirements for Loans in Forbearance
Today, the Federal Housing Finance Agency (“FHFA”) announced an eagerly awaited policy allowing Fannie Mae and Freddie Mac (the “Agencies”) to address one aspect of the liquidity crisis for mortgage servicers facing mounting advance obligations due to forbearances. Going forward, once a servicer of single-family mortgage loans pooled into an Agency mortgage-backed security has advanced four months of missed payments on a loan in forbearance, it will have no further obligation to advance scheduled payments of principal and interest.[1] The FHFA reports that this applies to all Agency servicers.
This answers one of the four main questions that servicers have asked about forbearance required under the CARES Act in the context of Agency servicing advances.
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PTAP/C19 – The “Last Resort” for Ginnie Mae Issuers Facing a Liquidity Crunch
Residential mortgage loan servicers, trade associations and various members of Congress have been urging the Department of Treasury and the Federal Reserve Board to provide a dedicated servicing advance facility. On April 10, 2020, Ginnie Mae did just that, announcing the terms of its much-anticipated Pass-Through Assist Program for Issuers of mortgage-backed securities that are…
Federal Reserve’s Updated TALF Program Excludes Support for Mortgage Servicing Advance Financing
As the residential mortgage community is aware, loan servicers are facing significant financial burdens from the servicing advance obligations associated with the loan forbearance mandates of the CARES Act. Over the past few days, there has been considerable reporting and reaction to the statements by the Director of the Federal Housing Finance Agency that Fannie Mae and Freddie Mac will not provide financial assistance to servicers facing these burdens. On the heels of those statements, the Federal Reserve has unfortunately eliminated another potential source of support for those servicers.
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Borrower, Don’t Lend Me A Hand – Remote Notarization During the COVID-19 Pandemic
How do documents get signed and notarized when the parties signing the documents are faced with stay-at-home orders? While both the federal Electronic Signatures In Global And National Commerce Act and state-enacted versions of the Uniform Electronic Transactions Act authorize notaries to perform electronic notarizations, electronic notarization is different than remote online notarization (RON). Without…
Modest Improvements: Ginnie Mae’s Servicing Advance Facility Recognition
Any day now, maybe even today, Ginnie Mae will announce the details on its Pass-Through Assistance Program (“PTAP”), through which Ginnie Mae will provide a liquidity facility for issuers that need help meeting their obligation as issuers to pass-through payments of regularly scheduled payments of principal and interest, regardless of whether the loans are subject to forbearance. While quickly trying to finalize PTAP program documents, on Monday April 7th, Ginnie Mae announced that it would recognize servicing advance financing facilities under its Acknowledgement Agreement. Previously, Ginnie Mae would not recognize a servicing advance receivable as an independent component of mortgage servicing rights related to loans pooled into Ginnie Mae securities (“MSRs”). This new recognition improves the ability of servicers to finance a valuable income stream, which has proven increasingly costly as the COVID-19 pandemic has greatly challenged liquidity in the housing market. But this recognition comes with limitations, which we detail below.
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