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Showing posts with label Fannie Mae. Show all posts
Showing posts with label Fannie Mae. Show all posts

Monday, October 12, 2020

Residential Eviction Suspension Being Lifted Today (October 12, 2020)

Effective October 12, 2020, residential evictions are back in NYS with suspensions being lifted.

Specifically, Chief Administrative Judge Lawrence K. Marks issued Administrative Order 231/20, which permits the prosecution of residential evictions commenced after March 17, 2020.

As of October 12, 2020, here are the rules are in place for residential and commercial proceedings:

Residential Eviction Proceedings
  • Proceedings Commenced Prior to March 17, 2020:
    • The court must conduct a status or settlement conference wherein the court reviews the procedural history of the case, any effect of the COVID-19 pandemic, if any, upon the parties, any other relief or protection available to the tenant, among others. Thereafter, the court may take further steps it deems appropriate, including allowing the matter to proceed and allowing the enforcement of warrants of eviction. 
  • Proceedings Commenced After March 17, 2020: 
    • All residential eviction matters (nonpayment and holdover) may proceed subject to: 
        • Current or future federal and state laws affecting evictions; 
          • For evictions based on nonpayment of rent: 
          • FHAFannie MaeFreddie Mac borrowers are prohibited from starting nonpayment evictions and are encouraged to seek forbearance and other options with their lenders; 
          • The CDC also halts evictions for nonpayment of rent until December 31, 2020. You can read more about it and the penalties HERE
        • The individual court’s scheduling requirements as affected by health and safety concerns due to COVID-19. 
          • Courts are prohibited from issuing a warrant of eviction or judgment of possession against a residential tenant or other lawful occupant who suffered a financial hardship during the COVID-19 period and is being evicted for non-payment of rent due during such period. 
          • Currently, the COVID-19 period runs from March 7, 2020 to January 1, 2021, as extended by Executive Order 202.66 and subject to any further extensions. This means that courts will only issue money judgments (no warrants of evictions and judgments of possession) on eviction proceedings based on nonpayment of rent due during the COVID-19 period. 

Commercial Eviction Proceedings

  • Proceedings Commenced Prior to March 17, 2020:
    • May proceed in the normal course subject to:
        1. Any existing prohibition on the prosecution or enforcement of evictions (as of this writing, there are none); and
        2. The suspension of statutory deadlines until November 3, 2020 per Executive Order 202.67.
  • Proceedings Commenced After March 17, 2020:
    • Eviction proceedings for nonpayment of rent are prohibited until October 20, 2020 per Executive Order 202.64 and subject to any further extensions.
    • Holdover eviction proceedings may be commenced but remain suspended until further order of the court per Administrative Order 160A/20. This means the petition may be filed and the tenants may file an answer, but the proceedings shall remain suspended. However, if all parties are represented by counsel, the matter may be eligible for calendaring virtual settlement conferences with the court.

All Evictions
  • All proceedings will be conducted remotely whenever appropriate.
  • Mediation and other alternative dispute resolution methods are encouraged where either all parties are represented by counsel; or all parties are unrepresented by counsel.
  • All petitions must include the Notice to Respondent Tenant.
  • Filing and service may be done through NYSCEF, if available and by mail, if not.

Landlords should immediately file their evictions and preserve their rights.


Saturday, March 28, 2020

Evictions Stopped Under Coronavirus Stimulus - CARES Act

The Coronavirus Aid, Relief, and Economic Security or “CARES” Act was enacted into law on March 27, 2020. In addition to the relief enumerated in two of our recent articles (Nuts & Bolts of Stimulus Package - House Passes 2 Trillion Dollar Stimulus Package and Forbearance and Foreclosure Moratorium in Coronavirus Stimulus), the CARES Act also provides relief to residential tenants.

Under the CARES Act, from March 27, 2020 to July 25, 2020, landlords of 1- to 4-family and multifamily (5 or more) properties with FHA, Fannie Mae, or Freddie Mac mortgage loans may NOT:
  • Initiate a legal action to recover possession based on nonpayment of rent or other fees or charges;
  • Charge fees, penalties or other charges related to the nonpayment of rent;
  • Require the tenant to vacate with less than 30-days’ notice; and
  • Issue the 30-day notice to vacate until after July 25, 2020.
In addition, landlords who obtain a forbearance on their multifamily mortgage due to a financial hardship caused by the COVID-19 outbreak are prohibited from doing the above before their forbearance period expires.

Forbearance and Foreclosure Freeze in Coronavirus Stimulus

On March 27, 2020, the historic stimulus package known as the Coronavirus Aid, Relief, and Economic Security or “CARES” Act was enacted into law.

In addition to the relief enumerated in our recent blog (Nuts & Bolts of Stimulus Package - House Passes 2 Trillion Dollar Stimulus Package), the CARES Act also includes mortgage relief in the form of forbearance periods and foreclosure moratoriums for federally backed mortgages on 1-4 family homes and multifamily (5 or more) homes.

Which mortgages are covered?
  • Federally backed mortgage loans secured by a first or subordinate lien on residential real property (including individual units of condominiums and cooperatives) for 1- to 4-families and for on multifamily residential real property (5 or more dwelling units) are covered, these include loans:
  • insured by the Federal Housing Administration;
  • insured under section 255 of the National Housing Act;
  • guaranteed under section 184 or 184A of the Housing and Community Development Act of 1992;
  • guaranteed or insured by the Department of Veterans Affairs;
  • guaranteed or insured by the Department of Agriculture;
  • made by the Department of Agriculture; or
  • purchased or securitized by the Federal Home Loan Mortgage Corporation (Freddie Mac) or Federal National Mortgage Association (Fannie Mae).


What relief is available? 
For 1-4 family properties:
  • Forbearance period of 180 days, which may be extended for an additional 180 days, upon the borrower’s request;
  • No late fees, interest, or penalties during the forbearance period beyond those scheduled or calculated as if borrower is current on the mortgage; and
  • Foreclosure moratorium – servicers are prohibited from moving for a foreclosure judgment or order of sale, or execute a foreclosure-related eviction from March 18, 2020 to May 17, 2020;
For multifamily properties
  • Forbearance period of 30 days, which may be extended for up to 2 additional 30-day periods, upon the borrower’s request. Note that the forbearance is only applicable to multifamily mortgage loans that were current on payments as of February 1, 2020. Also, tenants may not be evicted nor issued a notice to vacate for nonpayment or late payment of rent during the forbearance period.
  • Foreclosure moratorium: servicers are prohibited from moving for a foreclosure judgment or order of sale, or execute a foreclosure-related eviction from March 18, 2020 to May 17, 2020. 


What is the process for requesting a forbearance?
  • For 1-4 family properties: Requests for a forbearance may be made by submitting a borrower’s attestation to a financial hardship caused by the COVID-19 emergency. No other documentation is required for the initial 180-day forbearance to be granted.
  • For multifamily properties: Requests for a forbearance may be submitted to the servicer orally or in writing, through an affirmation that the multifamily borrower is experiencing a financial hardship during the COVID-19 emergency.

Friday, March 20, 2020

NYS, FHA, Fannie Mae and Freddie Mac Mortgage Relief Plans Do Not Automatically Waive Mortgage Payments

On March 19, 2020, Governor Cuomo announced a 90-day Mortgage Relief Plan ("Plan") for New York State mortgage borrowers. New York State mortgage servicers are directed to provide 90-day mortgage relief to borrowers affected by the novel coronavirus (COVID-19). The Plan aims to provide the following relief:
  • Waiving mortgage payments based on financial hardship;
  • No negative reporting to credit bureaus;
  • Grace period for loan modification;
  • No late payment fees or online payment fees; and
  • Postponing or suspending foreclosures.
While the Plan does bring immediate relief to homeowners affected by the coronavirus (COVID-19), the Plan does not simply waive mortgage payments due in the next 90 days. In his press conference, Governor Cuomo clarified, "We're not exempting people from the mortgage payments. We're just adjusting the mortgage to include those payments on the back end."

Currently, specific procedures on how to apply and/or how to qualify under the Plan is yet to be published, so stay tuned. Until then, borrowers should retain counsel to apply and negotiate with their mortgage lender or servicer for a forbearance plan to prevent incurring interest and fees for missed payments.

Mortgage relief plans are also in place for FHA, Fannie Mae, and Freddie Mac mortgages. Similar to New York State's Plan, however, borrowers should be aware that the mortgage payments are not automatically waived nor placed on hold and they should retain counsel to apply and negotiate with their mortgage servicer immediately.


Thursday, March 19, 2020

60-Day Moratorium on Foreclosures and Evictions for FHA, Fannie Mae, and Freddie Mac Mortgages

On March 18, 2020, the U.S. Department of Housing and Urban Development (HUD) authorized the Federal Housing Administration (FHA) to implement a 60-day moratorium on foreclosures and evictions for single family homeowners with FHA-backed mortgages. Similarly, the Federal Housing Finance Agency (FHFA) also directed Fannie Mae and Freddie Mac to suspend foreclosures and evictions for single family mortgages for at least 60 days. These moratoriums were intended to curb the effects of the coronavirus (COVID-19) on homeowners and in connection with the proclamation of the COVID-19 outbreak as a national emergency.

The 60-day moratorium for FHA, Fannie Mae, and Freddie Mac mortgages took effect on March 18, 2020. For FHA mortgages, the moratorium applies to all FHA Title II Single Family forward and Home Equity Conversion Mortgage (reverse) mortgage programs and covers the initiation of foreclosures up to completion of foreclosures in process. Evictions from properties secured by FHA, Fannie Mae and Freddie Mac single family mortgages are also on hold for 60 days.

In addition to HUD and FHFA moratoriums, all evictions and foreclosures are indefinitely suspended in the counties of Nassau County and Suffolk County.

Wednesday, March 08, 2017

Guidance for Borrowers Seeking Home Loan Modifications Under the Making Homes Affordable Act

On Monday, February 27, 2017, Fannie Mae, acting as administrator of Home Affordable Modification Program (HAMP), implemented portions of the Supplemental Directive 16-02 regarding the termination of Making Homes Affordable Program (MHA).

Now, borrowers who have applied for a modification on or before the termination of the MHA on December 31, 2016 under HAMP Tier 1, HAMP Tier 2, Streamline HAMP, Second Lien Modification Program (2MP), Treasury Federal Housing Administration HAMP (Treasury FHA-HAMP), and Rural Development HAMP (RD-HAMP) must have modification effective dates on or before December 1, 2017. Additionally, closing dates for a transaction under Home Affordable Foreclosure Alternatives Program (HAFA) must be on or before December 1, 2017.

In conjunction with the termination of the MHA on December 31, 2016, Supplemental Directive 16-02 provides guidance to servicers regarding non-Government Sponsored Enterprise (GSE) Mortgages of borrowers who have requested assistance prior to December 31, 2016. Specifically, this Directive applies to: the HAMP, the Home Affordable Unemployment Program (UP), HAFA, 2MP, Treasury FHA-HAMP, and RD-HAMP. In addition, this Supplemental Directive provides guidance with respect to the eligibility of certain GSE HAMP Loans to receive pay-for-performance incentives through the Troubled Asset Relief Program (TARP).

So, the MHA has ended. However, no need to worry if you have applied on or before December 31, 2016 for a home loan modification through MHA because you still have time to receive the benefits of the MHA if you complete the modification process by December 1, 2017.

Alternatively, if you have not yet applied for a home loan modification, New Yorkers may continue seek mortgage modifications under Civil Practice Law and Rule §3408.



Thursday, September 08, 2016

New Fannie Mae/Freddie Mac Refinance Program for 2017

On August 25, 2016, the Federal Housing Finance Agency (FHFA) announced a new refinance program by Fannie Mae and Freddie Mac that will be implemented in October 2017 for borrowers who are underwater on their mortgages.

This new program will replace the current Home Affordable Refinance Program (HARP), which was set to expire on December 31, 2016. To avoid a gap of almost one year between the commencement of the new program and the expiration of HARP, the FHFA, which oversees both Fannie Mae and Freddie Mac, has also extended HARP through September 30, 2017.

HARP was launched in 2009 to assist homeowners who have high loan-to-value ratios to obtain refinanced loans with better rates. For clarity, HARP is different than the Home Affordable Modification Program (HAMP), which is more generally familiar to our readership. HAMP was designed to assist homeowners in obtaining mortgage modifications on their existing loans whereas HARP is for homeowners seeking to refinance their loans into an entirely new mortgage product. Moreover, HAMP is for loans that are already in default or at risk of default whereas HARP is only for homeowners who are current on their loans.

A borrower is eligible for HARP through September 30, 2017 if:
  1.  There are no missed mortgage payments within the last six months;
  2. There is not more than one missed mortgage payment within the last twelve months;
  3. The house is a primary residence, 1-unit second home, or a 1- to 4- unit investment property;
  4. It is a Fannie Mae or Freddie Mac-owned loan;
  5. The loan was made on or before May 31, 2009; and
  6. The loan-to-value is greater than 80%.
The new refinance program launching in October 2017 will be more “targeted” than HARP, but details are not yet fully available. The following are the currently known eligibility requirements:
  1. There are no missed mortgage payments within the last six months;
  2. There is not more than one missed mortgage payment within the last twelve months;
  3. The borrower must have a source of income;
  4.  It is a Fannie Mae or Freddie Mac-owned loan; and
  5. The borrower must receive a benefit, such as reduced monthly mortgage payments.
Of greatest import, unlike the expiring HARP, the new program will extend eligibility to loans made after May 2009 and borrowers will be able to refinance under the new program more than one time. Though more than 3.4 million homeowners have already refinanced under HARP, there are still hundreds of thousands of eligible homeowners who are still in need of assistance. This new program will continue to assist homeowners who are suffering from the housing crisis and open up opportunities to refinance for new categories of homeowners.

Unfortunately, no new announcements have been made to extend HAMP through 2017 even though there remains many properties currently in foreclosure and many millions more properties at risk for default. HAMP is set to expire on December 31, 2016. 

Monday, March 31, 2014

Mortgage Finance Reform Advances in the Senate

The Senate is currently formulating its bipartisan plan to overhaul Fannie Mae and Freddie Mac in the Committee on Banking, Housing, and Urban Affairs. Chairman Tim Johnson (D-SD) and Ranking Member Mike Crapo (R-ID) have been working together to craft legislation that shifts the mortgage market to the private sector and creates the Federal Mortgage Insurance Corporation (FMIC) that will protect taxpayers from having to bear the costs if another housing bubble bursts in the future. FMIC will be an independent agency that supervises servicers and guarantors and provides insurance on mortgaged-backed securities. It will also create a mortgage insurance fund that funds insurance claims but only after the private sector absorbs the initial risk. The government will remain a guarantor of mortgages as a last resort.

In a news release, Mike Crapo explained, “This agreement moves us closer to ending the five-year status quo and beginning the wind down of Fannie and Freddie while protecting taxpayers with strong private capital, building the components for a stable secondary market and avoiding repeating the mistakes of the past. Government control of Fannie and Freddie with no private capital to protect taxpayers against losses is unacceptable.”

This legislation is only in its early stages, focusing on the necessity of a smooth and efficient transition to private lending and the continuing availability of the affordable 30-year mortgage. Brokers, change is coming to the mortgage market, and it is essential that you are knowledgeable every step of the way to a final bill. This legislation directly affects your occupation and your clients, so keep your eyes open for more advances in legislation.

Click here to read more on the Housing Finance Reform legislation. You may also follow S. 1217’s progress here on govtrack.us.  

Wednesday, February 26, 2014

Fannie Mae and Freddie Mac are Setting Records in Profits

Due to the housing bubble burst in 2008, the federal government took ownership of the mortgage giants, Fannie Mae and Freddie Mac, and bailed them out of financial ruin. Not only did this bailout cost $187.5 billion in taxpayer dollars, but it also took years for Fannie Mae and Freddie Mac to recover from their monumental losses and begin to profit again.

However, there is good news! Now that the mortgage giants are profitable again, they have more than repaid the government for their 2008 bailout by paying dividends to the U.S. Treasury of $192.5 billion. Fannie Mae alone broke records with its $84 billion profit in 2013, completely exceeding the government’s expectation of recovery.

Fannie Mae and Freddie Mac do not expect to make as huge a profit in 2014 as they did in 2013, but they are hopeful that they will remain profitable in the long run. The Obama Administration, however, still wants to overhaul the mortgage giants and take away their monopoly on the mortgage market. There is currently a bipartisan bill in the Senate called the Housing Finance Reform and Taxpayer Protection Act of 2013 that focuses on financial reform and will hopefully take center stage this year.

Brokers, keep in mind that the housing market may drastically change in the next 5 years as private lending replaces the government-sponsored enterprises. However, now that the mortgage giants are turning such huge profits, reform may experience some delays. It is difficult to enact reforms when times are good, even though another financial crisis always looms on the horizon.