COVID-19 UPDATES
HUD Issues Guidelines for Underwriting FHA Loans to Borrowers With Forbearances
The Department of Housing and Urban Development last week issued underwriting guidelines for borrowers who have been previously granted forbearance due to COVID-19 or another presidentially declared disaster. Lenders may begin to implement the guidance immediately, and it must be applied to all loans with case numbers assigned on or after Nov. 9, 2020.
According to the guidelines, borrowers who remained current on their payments during their forbearance period are immediately eligible to refinance their current FHA-insured mortgages or obtain financing for new loans. Borrowers who missed payments during their forbearance period but have since resolved their financial hardship and exited their forbearance agreement will require waiting periods of varying lengths, depending on the loan type.
IBA, Other Bankers Associations, Urge Lawmakers to Advance Standalone PPP Loan Forgiveness Legislation
With Congress currently deadlocked on a COVID-19 relief bill, the Indiana Bankers Association joined with other state bankers associations and the American Bankers Association on Friday to urge lawmakers to support standalone Paycheck Protection Program loan forgiveness legislation that would streamline the process for small business borrowers.
The groups called on lawmakers to consider two recently introduced bills—S. 4117, sponsored by Sens. Kevin Cramer (R-N.D.), Bob Menendez (D-N.J.), Thom Tillis (R-N.C.) and Kyrsten Sinema (D-Ariz.), and H.R. 7777, a House companion bill sponsored by Reps. Chrissy Houlahan (D-Pa.) and Fred Upton (R-Mich.).
“If S. 4117 or H.R. 7777 were enacted, these proposals would forgive PPP loans of less than $150,000 upon the borrower’s completion of a simple, one-page forgiveness document,” the groups wrote. They added that “while we support congressional efforts and ongoing negotiations to assist all Americans, we do not believe small businesses should be entangled in the differences over a larger COVID relief package.”
According to SBA data, PPP loans of $150,000 and less account for about 85% of total recipients but less than 26% of loan dollars, the groups noted. “As the country continues to struggle with the economic consequences of the COVID-19 pandemic, S.4117 or H.R. 7777, or a similar proposal, will allow SBA to direct its limited resources to help our nation’s small businesses.”
Additional Tax Refund, EIP Numbers Start Sept. 21
The Department of the Treasury’s Bureau of the Fiscal Service has indicated financial institutions should be prepared by Sept. 21 to receive tax refunds and Economic Impact Payments with new Routing and Transit Numbers and data values.
In a notice to financial institutions, the bureau provided a table with the planned sequence of Identification Code Designators and RTNs. The notice is designed to provide financial institutions time to complete any needed processing or system preparations to receive these payments.
ICYMI - Coin Task Force Issues Resources
The U.S. Coin Task Force has published new resources for financial institutions, armored carriers and retailers to help address disruptions to coin circulation. The resources on the task force’s Get Coin Moving site include best practices, suggestions to encourage coin circulation, customizable graphics, social media recommendations and more.
The task force also indicated it plans to complete another sprint this month to measure and monitor the impact of its resources to maximize effectiveness. Both the American Bankers Association and Independent Community Bankers of America are represented on the task force, which released initial recommendations last month. Additionally, Sherri Reagin of IBA-member North Salem State Bank serves on the task force.
ICYMI - ‘Ask the Fed’ Webinar on PPPLF
The Federal Reserve will host a webinar Sept. 18 at 2 p.m. ET on the Paycheck Protection Program Liquidity Facility (PPPLF). The webinar will provide an update on reporting requirements and the paydown process for PPPLF participants that receive loan paydown payments on Paycheck Protection Program loans that are pledged to the PPPLF. In addition, the webinar will cover the steps a PPPLF participant would need to take in cases where the maturity of an existing PPP loan pledged to the PPPLF is extended from two years to five years.
The PPPLF supports the effectiveness of the Small Business Administration’s PPP by supplying liquidity to financial institutions that are eligible to make PPP loans to small businesses. The PPPLF provides nonrecourse advances to these financial institutions by using PPP loans as collateral. Questions may be submitted in advance to askthefed.org.
IBA COVID-19 Updates
The IBA has several COVID-19 resources and updates available at our website.