Guidance for End of Pandemic-Era Federal Homeowner Protection Programs
October 5, 2021
The National Credit Union Administration issued Letter to Credit Unions 21-CU-09 to provide credit unions with information for compliance with the end of certain pandemic-era protection programs.
The Deadline to Grant CARES Act Forbearance Ended Sept. 30
Section 4022 of the CARES Act provided homeowners with federally backed mortgages the option to temporarily suspend their monthly mortgage payments for up to 18 months. The forbearance period has ended, meaning borrowers will need to work with their credit union mortgage servicers to establish a repayment plan for the missing payments.
The Federal Housing Finance Agency and other agencies that provide federally backed mortgages have announced a series of programs to help borrowers exiting forbearance to stay in their homes. These programs encourage mortgage servicers to offer borrowers new payment reduction and loan modification options that can help homeowners remain in their homes.
The NCUA strongly encourages credit unions to work with borrowers who are exiting the forbearance period. Such assistance may include helping borrowers to lower their payments. Credit unions need to provide this assistance in a safe and sound manner and comply with all applicable consumer financial protection laws.
Credit Unions Can Continue to Grant Section 4013 CARES Act Loan Modifications Until Jan 1, 2022
For non-federally backed mortgages, Section 4013 of the CARES Act allows credit unions to modify a loan, including forbearance, without designating the modification as a troubled debt restructuring if it meets the following criteria:
- The loan was in existence before Dec. 31, 2019;
- The modification is related to COVID-19;
- The borrower was less than 30 days past due as of Dec. 31, 2019; and
- The modification is executed between March 1, 2020, and the earlier of Jan. 1, 2022, or 60 days after the date of termination of the national emergency concerning COVID-19 outbreak declared by the President on March 13, 2020.
At the end of the forbearance or loan modification period, the NCUA encourages credit unions to use every effort, consistent with safe and sound practices and consumer financial protection, to help borrowers stay in their homes. These efforts may include granting additional loan modifications that are in the long-term best interests of the credit union and its members.
Federal Foreclosure Moratorium Expired July 31. Oregon State Foreclosure Moratorium Expires Dec. 31
Section 4022 of the CARES Act imposed a temporary moratorium on foreclosures for federally backed mortgages. The moratorium finally expired on July 31.
In Oregon, H. 2009 requires lenders to allow members to defer payments on real estate loans and imposed a moratorium on foreclosures. Governor Brown extended the foreclosure moratorium through the end of the year.
To ease the burden on homeowners with the end of the federal protection program the CFPB issued a final rule which temporarily amends certain mortgage servicing requirements under RESPA. Among other amendments, the final rule establishes temporary special COVID-19 loss mitigation procedural safeguards to ensure that a borrower has a meaningful opportunity to pursue loss mitigation options.
Credit union mortgage servicers should fully understand the CFPB final rule before initiating foreclosures. Refer to Regulatory Alert, RA-08-20, for more information on this final rule by the CFPB.
Federal Eviction Moratorium Expired Sept. 30. Washington State Bridge Eviction Moratorium Expires Oct. 31
Similar to the forbearance protection, Section 4022 of the CARES Act also mandated that mortgage servicers may not evict homeowners from a property with a federally backed mortgage that has been foreclosed. The eviction moratorium has been extended several times, with a current expiration of Sept. 30. Credit union mortgage servicers should be aware of this restriction, which aims to keep people in their homes even after the home has been foreclosed.
In Washington State, Governor Inslee updated the Eviction Bridge Proclamation to end on Oct. 31. This eviction prohibition applies to all properties and not just federally backed mortgages and applies to situations where past rent is owed.
Other Homeowner and Renter Assistance Programs
The American Rescue Plan provides almost $10 billion to help struggling homeowners with financial assistance to help keep them in their homes. Homeowners may use this money for mortgage payments, utilities, insurance, and other needs. The American Rescue Plan and earlier pandemic-related statutes also provided financial assistance to renters and landlords through the Emergency Rental Assistance Program. Credit unions should refer to the U.S. Department of Treasury’s website and direct struggling members to those resources.
The NCUA is concerned about the financial well-being of credit unions and their members. While some of these pandemic protection programs may be ending, there are resources and new programs available to help ease the impact of the COVID-19 pandemic on homeowners. The NCUA encourages credit unions to understand these changes and use these resources to work with their members. Credit unions are also encouraged to share consumer education resources, available at NCUA’s MyCreditUnion.gov, the U.S. Department of Treasury’s website, and the CFPB’s unified housing website, with concerned members.
Question of the Week
Q. For CIP purposes, what do we do when an individual is homeless and cannot provide the credit union with a physical address?
A. The Patriot Act addresses this issue and states that for an individual who does not have a residential or business street address, an Army Post Office (APO) or Fleet Post Office (FPO) number, the person may use the residential or business street address of next of kin or another contact individual.
If the member cannot provide a next of kin address, then they can provide the address of a local homeless shelter or church.
National Credit Union Administration
The NCUA issued regulatory alert 21-RA-09 to provide credit unions with information related to the CFPB issuing new technical specifications for complying with the Credit Card Act requirement to submit credit card agreements to the Bureau.
Consumer Financial Protection Bureau
The CFPB released a Consumer Complaint Research Brief which analyzes the racial and socioeconomic diversity of consumer complaints.
The CFPB issued frequently asked questions to address the limited-content messages and the call frequency provisions in the Debt Collection Rule.
Office of Foreign Assets Control
OFAC has updated the SDN list as of Sept. 29. The last update prior to this was Sept. 22.
Questions? Contact the Compliance Hotline: 1.800.546.4465; email@example.com.