April Newsletter
Washington Policy Update
Allison Karakis, Government Relations Manager
These days, Pittsburghers and those that loved Mr. Fred Rogers can’t help but think of his famous words to “look for the helpers” as the news continues to carry stories of tragedy, crowded hospitals, supply shortages, job losses and the resulting economic impact on so many.
In today’s crisis, it isn’t hard to find the helpers, as they are everywhere: first responders and medical professionals, grocery store employees, farmers, teachers, truckers, local volunteers and charities. Local financial institutions are also working around the clock to help small businesses access the money they need to pay wages.
Mr. Rogers went on to say, because “if you look for the helpers you’ll know that there’s hope.”
CARES Act Assistance for Renters and Homeowners
The $2-trillion Coronavirus Aid, Relief, and Economic Security (CARES) Act signed into law at the end of March has provisions to help both renters and homeowners that face financial hardship as a result of the coronavirus (COVID-19) pandemic.

There is a 120-day moratorium on evictions from properties with federally backed multifamily mortgages and most federally assisted rental housing programs.
Filing of foreclosures is suspended for 60 days after March 18 for federally backed mortgages. There is also up to 12 months of mortgage forbearance for homeowners, but it is not automatic, and the homeowner must contact their mortgage servicer to make these arrangements.
Additional Funding for Paycheck Protection Program
Additional funding of $310 billion for the Paycheck Protection Program (PPP) was passed by Congress last week. This includes a set-aside of $60 billion to be used by community financial institutions, half for institutions under $10 billion in assets and the other half for institutions between $10 billion and $50 billion.
This funding is expected to be exhausted in just a few days. Small businesses have continued to flood financial institutions with applications that are now being submitted to SBA since the reopening of the program earlier this week. 
Toomey Named to CARES Oversight Commission
U.S. Senator Pat Toomey (R-Pa.) was selected by Senate Majority Leader Mitch McConnell (R-Ky.) to serve on the Congressional Oversight Commission.
The Congressional Oversight Commission is a five-person panel established by the CARES Act. The Commission is focused specifically on the economic stabilization efforts of the Treasury Department and Federal Reserve. Other Commission members are Rep. Donna Shalala (D-Fla.), economic advisor Bharat Ramamurti and Rep. French Hill (R-Ark.). A chair has not been announced.
CRA Credit for Pandemic Lending
In a joint statement, the Federal Reserve System (Federal Reserve), the Federal Deposit
Insurance Corporation (FDIC) and the Office of the Comptroller of the Currency (OCC) said that pursuant to the Community Reinvestment Act (CRA), the agencies will favorably consider retail banking services and retail lending activities that are responsive to the needs of low- and moderate-income individuals, small businesses, and small farms affected by COVID-19 when performing financial institution assessments.
The agencies emphasize that prudent efforts to modify the terms on new or existing loans for affected low- and moderate-income customers, small businesses and small farms will receive CRA consideration and not be subject to examiner criticism.
In light of the declaration of a national emergency, the statement clarifies that financial institutions will receive CRA consideration for community development activities. Qualifying activities include those that help to revitalize or stabilize low- or moderate-income geographies and distressed or underserved non-metropolitan middle-income geographies, as well as those that support community services targeted to low- or moderate-income individuals.
The statement is effective through the six-month period after the national emergency declaration is lifted, unless extended by the agencies.
Click here to read the full statement.
FHFA Addresses Servicer Liquidity Concerns, Announces Four-Month Advance Obligation Limit for Loans in Forbearance
The Federal Housing Finance Agency (FHFA) announced the alignment of Fannie Mae and Freddie Mac (the Enterprises) policies regarding servicer obligations to advance scheduled monthly principal and interest payments for single-family mortgage loans. Once a servicer has advanced four months of missed payments on a loan, it will have no further obligation to advance scheduled payments. This applies to all Enterprise servicers regardless of type or size.
“The four-month servicer advance obligation limit for loans in forbearance provides stability and clarity to the $5-trillion Enterprise-backed housing finance market," said FHFA Director Mark Calabria. “Mortgage servicers can now plan for exactly how long they will need to advance principal and interest payments on loans for which borrowers have not made their monthly payment."
When a mortgage loan is in a mortgage-backed security (MBS), Fannie Mae servicers with a scheduled payment remittance are responsible for advancing the principal and interest payment regardless of borrower payments. Freddie Mac servicers, who are generally responsible for advancing scheduled interest, are only obligated to advance four months of missed borrower interest payments.
FHFA is also instructing the Enterprises to maintain loans that are in COVID-19 payment forbearance plans in MBS pools for at least the duration of the forbearance plan. Additionally, FHFA is approving the purchase of certain single-family mortgages in forbearance that meet specific eligibility criteria.
Click here to re ad both announcements.
FHLBanks Respond to Request for Input from FHFA
Last week, all 11 FHLBanks jointly submitted a response to FHFA’s Request for Input (RFI) on FHLBank membership.
Click here to read their response.