COVID-19 UPDATES
Florida Court Dismisses Case Seeking Agent Fees for “Agents” of PPP Loans
In a decision handed down yesterday, the U.S. District Court for the Northern District of Florida dismissed a court case seeking to establish whether or not “agents” are entitled to agent fees for PPP loans. Four banks were named as defendants in the case. The court determined that agents were not entitled to fees and dismissed the case.
Action Alert: Ask Congress to Request FHFA and GSEs to Rescind Refinance Fee
Last week, Fannie Mae and Freddie Mac announced that they will impose an “adverse market refinance fee” of 50 basis points for no-cash-out and cash-out refinance mortgages with delivery dates on or after Sept. 1, 2020 (for Fannie Mae loans), or with settlement dates on or after Sept. 1 (for Freddie Mac loans). This fee – which would amount to an additional $1,400 for the typical consumer, based on the average GSE loan size – would either be paid upfront or be added to the mortgage interest rate.
This directive challenges current efforts by policymakers to support homeowners who are already struggling with the COVID-19 pandemic. Congress must speak up on this issue and urge the FHFA to repeal this deeply misguided policy. The American Bankers Association and Independent Community Bankers of America joined with several other financial services, housing and consumer groups in a joint statement to strongly criticize this action by the GSEs and called for the withdrawal of the fee.
Please contact your senators and representatives and ask them to contact FHFA Director Mark Calabria and the CEOs of the GSEs to insist that they immediately withdraw this new refinance fee.
ICYMI - New GSE Fee on Refinances Criticized, Groups Call for Withdrawal
Banking advocates have joined several other financial services, housing and consumer groups in a joint statement strongly criticizing the “adverse market refinance fee” and called for its withdrawal. “The additional 0.5% fee on Fannie Mae and Freddie Mac refinance mortgages will raise costs for families trying to make ends meet in these challenging times,” the groups said. “The pricing increase is particularly harmful for our nation’s low- and moderate-income homeowners and for the emerging, but unsteady improvements to the national economy.”
Both the American Bankers Association and Independent Community Bankers of America have issued statements in opposition to the fee.
ICYMI - SBA Updates Guidance on PPP Forgiveness, Loan Reviews
The Small Business Administration last week released several elements of guidance for Paycheck Protection Program lenders and borrowers. The agency added three new frequently asked questions to its FAQs on PPP loan forgiveness. The new questions address how lenders should handle forgiveness applications for PPP borrowers who also received Economic Injury Disaster Loan advances.
SBA also issued two new questions on its main PPP FAQ document. The new FAQs clarify that whether fees are paid to an agent or other third party is immaterial to SBA’s guarantee of a PPP loan or to its payment of feeds to lenders. The FAQs also clarify that vision and dental benefits do not count toward the cash compensation cap of $100,000 for PPP payroll costs.
Finally, SBA released an interim final rule describing procedures by which a PPP borrower may appeal certain SBA loan review decisions to the agency’s Office of Hearings and Appeals. It also outlines circumstances when borrowers may request appeals. For example, the rule states that borrowers may not appeal lenders’ PPP loan decisions to OHA, although borrowers may ask SBA to review lender decisions to deny loan forgiveness applications.
ICYMI - Action Alert: Urge House Members to Pass H.R. 7777 to Forgive PPP Loans of $150,000 and Under
The U.S. House of Representatives recently introduced legislation to simplify the forgiveness process for Paycheck Protection Program loans of $150,000 and under by having borrowers sign a simple form attesting that the funds were used according to the PPP loan requirements.
ICYMI - Action Alert: Ask the Senate to Simplify Forgiveness for PPP Loans $150,000 and Under
The IBA is asking members to contact their senators in an effort to increase support for S. 4117, the Paycheck Protection Program Small Business Forgiveness Act. This bill has broad support from national trade associations and state banking associations across the country. Please contact your senators today and ask for their support to pass this legislation that will expedite the forgiveness process for the majority of borrowers that received loans through the PPP.
IBA COVID-19 Updates
The IBA has several COVID-19 resources and updates available at our website.