COVID-19

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In Mortgagee Letter 2022-09 dated July 7, 2022, the U.S. Department of Housing and Urban Development (HUD) sets forth new flexibility in underwriting guidelines for calculating effective income for Federal Housing Administration (FHA) insured loan applicants who incurred a reduction or loss in income as a result of a COVID-19 Economic Event. … Continue Reading

On June 28, 2021, the CFPB issued its Mortgage Servicing COVID-19 Final Rule (the “Final Rule”).  The Final Rule, which amends Regulation X, is effective August 31, 2021, and comes at the same time as certain related updates from other Federal agencies.  We discuss those topics, along with an overview of the Final Rule, below.… Continue Reading

In the federal government’s ongoing effort to revive the U.S. economy and help people harmed by the economic damage wrought by the coronavirus pandemic, an important detail has gone under-noticed:  the most recent set of federal stimulus payments to individuals are subject to garnishment by creditors.  And this fact is creating legal and operational challenges for the banking industry.… Continue Reading

On April 5, 2021, the CFPB issued a blog post suggesting various communication strategies for mortgage servicers, to handle increased volume associated with the COVID-19 national emergency.  Noting the CFPB’s recent Compliance Bulletin 2021-02 and Mortgage Servicing Notice of Proposed Rulemaking, the post encourages mortgage servicers to use all available tools to reach affected borrowers.… Continue Reading

On April 5, 2021, the CFPB issued a Notice of Proposed Rulemaking to amend Regulation X in various ways related to the COVID-19 national emergency (the “Proposed Rule”).  With the goal of enhancing protections for impacted borrowers, the Proposed Rule amends aspects of the early intervention requirements (12 C.F.R. § 1024.39), and loss mitigation procedures and foreclosure protections (12 C.F.R.… Continue Reading

On April 1, 2021, the CFPB issued Compliance Bulletin 2021-02 (the “Bulletin”), warning mortgage servicers to “take all necessary steps now to prevent a wave of avoidable foreclosures this fall.”  The Bulletin and associated press release cite industry data suggesting that around 1.7 million borrowers will exit COVID-related forbearances in September 2021 and the following months, many of whom will be a year or more behind on mortgage payments. … Continue Reading

Rescission of Statement on Bureau Supervisory and Enforcement Response to COVID-19 Pandemic.  The CFPB issued a Rescission of Statement of Policy for the previously-issued Statement on Bureau Supervisory and Enforcement Response to COVID-19 Pandemic (March 26, 2020).  That statement is rescinded as of April 1, 2020, and in the rescission document, the CFPB announces its intent to exercise its supervisory and enforcement authority consistent with the Dodd-Frank Act and with the full authority afforded by Congress consistent with the Bureau’s statutory purpose and objectives.… Continue Reading

In its February 2021 Bulletin, the California Department of Financial Protection and Innovation (DFPI) reminds licensed mortgage loan servicers that DFPI examinations will include processes to determine compliance with state and federal laws providing consumer protections with regard to COVID-19-related foreclosures.  The DFPI notes that these laws “include provisions allowing for forbearance of mortgage payments, post-forbearance options forbidding the requirement of lump sum payments, and the extension of the California Homeowner Bill of Rights to tenant occupied principal residences.”  … Continue Reading

A class action lawsuit filed in September 2020 against Nike alleging that its policy requiring retail employees to wear Nike-branded, opaque masks discriminated against deaf and hard of hearing consumers under Title III of the Americans with Disabilities Act (“ADA”) deserves attention from retail banks and non-bank financial services companies with brick-and-mortar facilities open to the public. … Continue Reading