What CUs need to know as forbearance requests increase
House Democrats Tuesday unveiled their Phase 4 coronavirus relief package – the Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act – which includes several amendments to provisions of the CARES Act related to mortgage forbearances. As more homeowners seek mortgage relief amid the pandemic, NAFCU continues its work with Congress, the Treasury Department, Federal Housing Finance Agency (FHFA), and NCUA to ensure credit union mortgage servicers receive more guidance and relief.
Since the CARES Act was enacted at the end of March, NAFCU has shared with the FHFA concerns about the health of mortgage markets and the need to provide credit unions with additional relief, and urged the agency to take steps to support mortgage servicers. The CARES Act did not provide relief for mortgage servicers, such as credit unions, but the FHFA heeded NAFCU’s call and has made an effort to do so.
Under the CARES Act, borrowers experiencing financial hardship during the coronavirus crisis may request forbearance on single-family and multifamily loans sold to the government-sponsored enterprises (GSEs), and in response mortgage servicers must provide a forbearance that allows borrowers to defer their mortgage payments up to 180 days with an option for an additional 180-day extension. The law also included a NAFCU-sought provision to provide flexibility for the NCUA in dealing with troubled debt restructurings (TDRs); the association continues to work with the NCUA to obtain clarity on loan modifications and treatment of TDRs.
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