(Oct. 1, 2021) “Critical information” for compliance with expiring pandemic-era protection programs for homeowners are addressed in a letter to credit unions from NCUA this week.
The letter (LTCU 21-CU-09), sent to all federally insured credit unions, provides lenders and mortgage servicers with the information. Among the key points noted:
- The deadline was Thursday (Sept. 30) to grant forbearance through provisions of the Coronavirus Aid Relief and Economic Security Act (CARES Act). Section 4022 of the act, as amended, the agency noted, provides homeowners with federally backed mortgages the option to temporarily suspend their monthly mortgage payments up to 18 months. Borrowers who have not previously been in forbearance have until Thursday to request assistance.
- 4013 CARES Act loans may be modified – including forbearance – until Jan. 1 without designating the modification as a “troubled debt restructuring” (TDR) under certain criteria. Those include: the loan existed 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.
- The moratorium foreclosure expired July 31. However, the agency pointed out, the Consumer Financial Protection Bureau (CFPB) recently issued a final rule temporarily amending certain mortgage servicing requirements under Regulation X to assist borrowers affected by COVID-19. “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,” the letter states. It adds that, between Aug. 31 and year’s end, a servicer must meet at least one of the specified safeguards before initiating any judicial or non-judicial foreclosure processes where a borrower became more than 120 days delinquent on or after March 1, 2020.
- Although the eviction moratorium expired Thursday, its aim, the letter notes, is to keep people in their homes even after the home has been foreclosed.
The letter also outlines other homeowner and renter assistance programs, which NCUA said provides nearly $10 billion in assistance to keep owners in their homes. The money may be used, NCUA pointed out, for mortgage payments, utilities, insurance, and other needs.
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(Jan. 29, 2021) NASCUS summaries of recent NCUA letters to credit unions – and a summary of a regulatory alert issued by the agency – are among the latest to be published by NASCUS. All three are available to members only.
The two letters summarized are on the agency’s outline of the issues affecting credit unions contained in the Consolidated Appropriations Act, 2021 adopted by Congress Dec. 27 (letter 21-CU-01, issued by the agency the week of Jan. 4), and about NCUA’s Supervisory priorities for 2021 (letter 21-CU-02, issued by the agency last week).
The first letter notes that that most of the provisions of the consolidated appropriations bill extend portions of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, signed into law last March as the impact of the coronavirus crisis became apparent. Those provisions are extended to Dec. 31, 2021, the letter notes. It also touches on provisions affecting the agency’s Central Liquidity Facility (CLF), troubled debt restructurings (TDRs), compliance with the Current Expected Credit Loss (CECL) accounting standard and more.
The second letter outlines the broad scope of the agency’s regulatory priorities for 2021, primarily focusing on challenges to credit unions posed by the ongoing coronavirus pandemic and steps to enhance the agency’s offsite monitoring of credit unions’ conditions. Additionally, the letter states that examiners will not be assessing credit unions’ efforts to transition to the CECL standard “until further notice.”
The summary of the regulatory alert (21-RA-01), released by NCUA earlier this month, outlines the agency’s view of CFPB’s action late last year to issue two final rules amending the Ability-to-Repay/Qualified Mortgage Rule (ATR/QM Rule) in Regulation Z. The final rules would replace the 43% debt-to-income (DTI) ratio limit with price-based thresholds (under the bureau’s general QM final rule), and create a new category of qualified mortgage (known as the seasoned QM final rule).
LINKS:
NASCUS Summary: LTCU 21-CU-01, Summary of the Consolidated Appropriations Act 2021 (members only)
NASCUS Summary: LTCU 21-CU-02, NCUA’s Supervisory Priorities (members only)
NASCUS Summary: Regulatory Alert 21-RA-01: CFPB Amends Ability-to-Repay/QM Rule under TILA (members only)