FROM MBA Washington
FROM Bob Broeksmit, CMB, President & CEO
Mortgage Bankers Association

Dear MBA Members,

Today is a significant day in American history, as the $2 trillion COVID-19 stimulus bill has passed the Senate and awaits House passage (expected tomorrow) before going to President Donald Trump's desk for his signature.
The COVID-19 pandemic changes our nation forever, and that's why I continue to emphasize these are extraordinary times. Just as extraordinary is the way our industry continues to deliver on behalf of those most affected by the tsunami occurring in the financial, housing, and retail sectors: American homeowners and borrowers, as well as our industry professionals who make and service loans.

As it relates to mortgage forbearance, the most important language in the bill is on pages 567-570 (single-family) and 570-574 (commercial/multifamily). Highlights of the bill include:

Liquidity Facility: $454 billion for loans, loan guarantees, and investments in programs or facilities established by the Federal Reserve for the purposes of providing liquidity to the financial system that supports lending to eligible businesses, states, or municipalities. This funding would enable Treasury and the Fed to establish a liquidity facility for loan servicers to access for advancing payments, and we continue to press hard on all fronts for a speedy announcement of such a facility.

Consumer Right to Request Forbearance: Applies to federally backed mortgage loans (Fannie/Freddie/FHA/VA/USDA) for those directly or indirectly impacted by the COVID-19 virus (if the borrower requests and affirms hardship). No signature or documentation is required, and the initial period is up to 180 days initially, with the option to extend for up to an additional 180 days. This broadly mimics the programs Fannie Mae and Freddie Mac have already announced.

Multifamily Mortgage Forbearance: A total of 90 days of forbearance (30-day forbearance on initial request, extendable for two additional 30-day periods), which applies to federally insured, guaranteed, supplemented, or assisted mortgages, including mortgages purchased or securitized by the GSEs
Moratorium on Evictions: For 120 days after date of enactment, applies to single-family and multifamily properties that participate in federal housing, homelessness, rural programs, or properties financed by federally insured, guaranteed, supplemented, or assisted mortgages, including mortgages purchased or securitized by the GSEs
Small-Business Assistance: $349 billion for SBA loans to help small businesses make payroll and pay rent and mortgage payments, with loans of up to $10 million. Proceeds may be used for payroll, rent, payment of mortgage interest (not principal), and utilities.

HUD Rental Assistance
  • $5 billion for Community Development Block Grants
  • $4 billion in homelessness assistance
  • $1.25 billion in tenant-based assistance
  • $1 billion in project-based assistance
  • $50 million for housing for the elderly
  • $15 million for housing for persons with disabilities

Temporary Lending Limit Waiver: Nonbank financial companies temporarily included in OCC's lending limits waiver CECL: Option to temporarily delay CECL application. Applies to insured depositories (including credit unions).
Troubled Debt Restructurings: Financial institution may elect to suspend TDR determination under GAAP for COVID-19-related loan modification
Community Bank Leverage Ratio: Agencies to temporarily reduce the CBLR for qualifying community banks from 9 percent to 8 percent

Debt Guarantee Authority: FDIC authorized to temporarily establish a debt guarantee program to guarantee debt of solvent insured depositories and depository institution holding companies

We will have a more detailed summary and analysis in the coming days.
MBA has worked feverishly in recent days to improve critical language within the bill that could have had disastrous impacts on our members, and we continue to work with leaders of both parties, on the Hill and in the administration, while maintaining our stance as a nonpartisan, action-based association. We remain committed to advocating for those affected most by this crisis, as well as ensuring protections enacted over a decade ago protect American homeowners, renters, lenders, and servicers.

In this time of uncertainty, two facts are certain: The COVID-19 crisis will pass, and when it does, MBA will continue to lead you, our core constituency, in thoughtful, meaningful ways