As pandemic homeowner protection programs end Thursday, credit union regulator offers outline of what changes mean

“Critical information” for compliance with expiring pandemic-era protection programs for homeowners is addressed in a Letter to Credit Unions from their federal regulator Monday.

The National Credit Union Administration (NCUA) letter, sent to all federally insured credit unions, provides credit union lenders and mortgage servicers, in particular, with the information. Among the key points noted:

  • The deadline is Sept. 30 (Thursday) to grant forbearance through provisions of the Coronavirus Aid Relief and Economic Security Act (CARES Act). Section 4022 of the act, as amended, the agency noted, provides homeowners with federally backed mortgages the option to temporarily suspend their monthly mortgage payments up to 18 months. Borrowers who have not previously been in forbearance have until Thursday to request assistance.
  • Section 4013 CARES Act loans may be modified – including forbearance – until Jan. 1 without designation as a “troubled debt restructuring” (TDR) under certain criteria. Those include: the loan existed before Dec. 31, 2019; the modification is related to COVID-19; the borrower was fewer than 30 days past due as of Dec. 31, 2019; and the modification is executed between March 1, 2020, and the earlier of Jan. 1, 2022, or 60 days after the date of termination of the national emergency concerning COVID–19 outbreak declared by the president on March 13, 2020.
  • The moratorium foreclosure expired July 31. However, the agency pointed out, the Consumer Financial Protection Bureau (CFPB) recently issued a final rule temporarily amending certain mortgage servicing requirements under Regulation X to assist borrowers affected by COVID-19. “Among other amendments, the final rule establishes temporary special COVID-19 loss mitigation procedural safeguards to ensure that a borrower has a meaningful opportunity to pursue loss mitigation options,” the letter states. It adds that between Aug. 31 and year’s end, a servicer must meet at least one of the specified safeguards before initiating any judicial or non-judicial foreclosure processes where a borrower became more than 120 days delinquent on or after March 1, 2020.
  • The eviction moratorium expires Thursday. However, the aim of the moratorium, the letter notes, is to keep people in their homes even after the home has been foreclosed.

The letter also outlines other homeowner and renter assistance programs, which the NCUA said provides nearly $10 billion in assistance to keep owners in their homes. The money may be used, the NCUA pointed out, for mortgage payments, utilities, insurance, and other needs.

NCUA Letter to CUs 21-CU-09: Navigating and Understanding the End of Pandemic-Era Homeowner Protection Programs

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