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Legislative Update

As the government responds to the COVID-19 pandemic, AIME is here to help you understand what legislation is passed or is currently in progress and how it impacts the mortgage industry. This page will continue to be updated with information as it becomes available.

FRIday, APRIL 3, 2020

Small Business Administration Loans

Find updated information about the SBA disaster assistance loan options here.

Today the Small Business Administration opens up the application for the Payroll Protection Program that was funded under the CARES Act. Other loan options available include Economic Injury Disaster Loans and Bridge Loans. These are great resources for business owners to leverage during this difficult time and come out ahead on the other side. 

We foresee this being a widely used option by business owners so expect delays and apply immediately. Find SBA’s Small Business Guidance and Loan Resources here. A record 6.6 million Americans filed for unemployment benefits last week. 

 

Fourth Stimulus Bill

As previously updated, the CARES Act has been passed and several branches of our government are busy executing those provisions. There is a potential 4th stimulus bill being discussed by Congress and the Administration. This additional coronavirus stimulus bill is expected to be negotiated and brought to vote as early as May 1st depending on the economic need.

Some of the ideas being considered include:

  • Additional direct payments to individuals
  • Additional unemployment insurance coverage
  • Additional funding to the business loan program
  • The potential repeal of state and local tax deduction limits

AIME has put together extensive resources to help you explain mortgage forbearance and other important topics.

WEDNEsday, APRIL 1, 2020

AIME has put together a CARES Act guide that breaks down the provisions as they relate to the mortgage industry and our consumers.

The Department of Treasury has released new information about the SBA Paycheck Protection Program. Applications will open on April 3rd, for small businesses and sole proprietorships. Find updated information here.

tuesday, March 31, 2020

The U.S. Department of Housing and Urban Development(HUD) is working towards implementing the provisions of the CARES Act. Their ultimate goal is to minimize the socioeconomic impact of our most at-risk community members. Following calls for continued social distancing, guidelines were re-released to be effective through May 17, 2020. These included guidelines for VOEs and appraisals.

Fannie Mae and Freddie Mac are both suspending credit bureau reporting of past-due payments of borrowers in forbearance plan until the national emergency is suspended.

Additional consumer Fannie Mae resources

Additional consumer Freddie Mac resources

Ginnie Mae announced that it will take action to ensure liquidity in the MBS market by offering pass-through assistance programs to help servicers address funding shortfalls and enable them to continue making scheduled payments to investors. This will allow your lending partners to keep lending, not only during the COVID-19 National Emergency, but into the future. AIME Chairman, Anthony Casa, explains in this video.

MONday, March 30, 2020

The CARES Act has been signed by the President and now officials are taking on the immense task of disseminating the appropriated funds. Since Friday, we have seen extensive news coverage about the MBS market and how servicing will be affected. What we know:

Mortgage Forbearance

  • Extensive mortgage forbearance for borrowers can cause lending to grind to a halt as servicers are still required to pay investors on the behalf of borrowers. To combat the potentially crippling effects on mortgage lenders, Treasury Secretary Steve Mnuchin has formed a mortgage task force to identify where spending will be most impactful.

Ginnie Mae Securities

  • Ginnie Mae securities (FHA, VA, USDA) are becoming harder to securitize by lenders because of the current unemployment rate. This is why lenders are adding new overlays to these products including higher credit requirements, lower DTIs, higher reserves, and more. AIME Chairman, Anthony Casa, explains this in detail in this video.

Small Business Provisions

  • State and local governments are beginning to implement the CARES Act provisions for local and small businesses. Find out if your business is eligible for the Payroll Protection Program offered by the Small Business Administration here and additional FAQs provided by the Senate Committee on Small Business and Entrepreneurship.

Financial Planning & Retirement Withdrawals

  • The CARES Act allows you to withdraw up to $100,000 from a retirement account without the 10% early withdrawal penalty. Is this an ideal financial decision for you? Financial advisor, Kieth Nichol, discussed this and more with the AIME team. Watch the video here.

FRIday, March 27, 2020

CARES (Coronavirus Aid, Relief, and Economic Security) Act:

How it affects independent mortgage professionals and their borrowers

The CARES Act appropriates $220.6 billion to labor, health and human services, education, transportation, housing and urban development, and related agencies. The Act granted $454 billion to the Federal Reserve and Treasury to improve liquidity and $349 billion to small-business assistance programs. AIME has compiled some additional information as it relates to the mortgage industry and how some of these dollars are being allocated.

Mortgage Forbearance

Single-Family

Applies to federally backed mortgage loans (Fannie/Freddie/FHA/VA/USDA) for those directly or indirectly impacted by the COVID-19 virus. If requested and granted by a loan servicer the initial period is up to 180 days, with the option to extend for an additional 180 days.

Multifamily

Investors and owners of multifamily residences can apply for a total of 90 days of forbearance, which will be granted in 30-day increments. This applies to federally insured, guaranteed, supplemented, or assisted mortgages, including mortgages purchased or securitized by the GSEs.

Department of Housing and Urban Development (HUD)

HUD was granted a total of $17.4 billion to distribute across the following:

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

Small Business Administration (SBA) 

Economic Injury Disaster Loans (EIDL)

The SBA has increased funding for its Economic Injury Disaster Loans (EIDL). These loans can be used for:

  • Paid sick leave to employees impacted by COVID-19
  • Payroll
  • Rent/Mortgage Payments
  • Debt Obligations Due To Lost Revenues
  • Increased costs due to supply chain disruptions and materials

Payroll Protection Program

  • Businesses with 500 employees or less, including sole proprietors and independent contractors, are eligible for SBA 7(a) loans in response to COVID-19 covering expenses for the period of February 15, 2020 through June 30, 2020.
  • The loan amount will be 250% of the average salary expenditures/month for 2019, up to $10 million. For businesses not open yet in that period, the SBA will look at earlier receipts from 2020.
  • 7(a) loans can be used for:
    • Payroll, including payment independent contractors and employees who work on commission
    • Rent/Mortgage Interest
    • Utilities

All or a portion of these loans will be forgivable for businesses that maintain the same average payroll levels as in the previous year; forgivable amounts phase out as employers lower that.

Student Loans

Student loan payments will suspend all payments on federal student loans for 6 months with no interest during the forbearance period.

Cash Payments

Americans with incomes below the thresholds will receive cash payments from the federal government in the amount of $1,200 per adult plus $500 for each child under the age of 17. These payments should be sent out starting in April. More information can be found here.

Other Cash Sources

  • Retirement accounts can take an early withdrawal of up to $100,000 without the early with-draw penalty and pay the normal tax on the amount over a three year period.
  • Businesses with 100 or fewer employees, can claim a refundable employee retention tax credit against payroll taxes of up to $5,000 per employee under certain circumstances.

Unemployment Insurance

The unemployment assistance benefits are provided to individuals who are unemployed, partially unemployed, or unable to work for the weeks those individuals were impacted as a result of COVID-19 between January 27- December 31, 2020. Individuals who apply for unemployment benefits through their state will also qualify for Federal Pandemic Unemployment Assistance for up to four months that the authority of the issuing states. Unemployment benefits will also be extended for an additional 13 weeks for a maximum of 39 weeks.

Read the complete stimulus bill here: CARES Act

Read a summary of the stimulus bill, provided by the Senate Appropriations Committee here: CARES Act Summary

 

U.S. Small Business Administration Disaster Loan Assistance

Overview:

The U.S. Small Business Administration offers a Disaster Loan Assistance program to qualifying small businesses to use toward payroll, utilities, and other expenses when there is a declared disaster. In the case of COVID-19 these would be economic Injury Disaster Loans(EIDL). Loans can be up to $2 million at a fixed 3.75% for a loan amount for up to 30 years based on the borrower’s ability to repay.

Stay informed of the Small Business Administration’s Disaster Loan Assistance here: https://www.sba.gov/funding-programs/disaster-assistance

More overview information can be found here: https://disasterloan.sba.gov/ela/Declarations/ViewDisasterDocument/3513

Do you qualify? 

Has your business’ state and county declared a disaster? This has to be the state that your brokerage files taxes in. You can look up which states have federally declared disasters here: https://disasterloan.sba.gov/ela/Declarations

To Identify if your small business qualifies, you will have to apply online or by mail with the required documentation identified here: https://disasterloan.sba.gov/ela/Documents/Three_Step_Process_SBA_Disaster_Loans.pdf

THURsday, March 26, 2020

The Senate has passed legislation today for a $2.2 trillion stimulus bill. This bill, known as the CARES Act (Coronavirus Aid, Relief, and Economic Security Act),  will be voted on in the House of Representatives this evening and, if passed, will be sent to the President for his signature.

 

Read the complete stimulus bill here: CARES Act

Read a summary of the stimulus bill, provided by the Senate Appropriations Committee here: CARES Act Summary

Read a summary of The U.S. Senate Committee on Small Business and Entrepreneurship, included in the CARES Act here: Keeping American Workers Paid and Employed Act

wednesday, March 25, 2020

A deal has been reached between the White House and the Senate. The package will be over $2 trillion in the stimulus. The Senate package was previously held up as additional concessions were demanded.

 

Additional Concessions obtained were:

  • Additional money to ramp up healthcare capacity
  • Ban on stock buybacks by corporations receiving government relief
  • Limit executive bonuses
  • Treasury would have to disclose loan details
  • Treasury would have a new inspector general to oversee this new stimulus program
  • Any business owned by President Trump or his family is prohibited from receiving any assistance from the stimulus program

 

Other items previously mentioned that we believe are still in the deal are: 

  • Direct payments to American families (up to $3200 per family of four)
  • Delayed payroll taxes
  • More money for hospitals
  • Telehealth services expanded
  • Expansion of using HSA/FSA accounts to pay for healthcare needs
  • Expanding unemployment benefits
  • More liquidity and flexibility for small business loans
  • Greater liquidity for the Fed

Once the Senate passes the legislation today we are hopeful the House of Representatives will take up the bill quickly and send it to the President for his signature.

Monday, March 23, 2020

Last night, the Senate failed to pass a $2 trillion stimulus package. Negotiations with the White House and Congress are ongoing as we speak. We expect this relief package to expand, not shrink, to get the votes needed in the Senate and in the House. The House also put out its own package with $2.5 trillion in spending. At this point we expect the Senate bill to be the basis for a deal as the House is still not in session.

Highlights of the current package include:

  • Direct payments to American families (up to $3200 per family of four)
  • Delayed payroll taxes
  • More money for hospitals
  • Expanded Telehealth services
  • Expansion of the ability to use HSA/FSA accounts to pay for healthcare needs
  • Expanded unemployment benefits
  • More liquidity and flexibility for small business loans
  • Greater liquidity for the Fed

Find more information about what’s in the Senate’s Coronavirus Bill here.

Monday, DECEMBER 23, 2019

Philadelphia, PA (December 23, 2019) — Chairman Anthony Casa, released the following statement commending the House and Senate for passing and for President Trump signing into law the Fiscal Year 2020 domestic appropriations bill (H.R. 1865):

“AIME* is thankful that the House and Senate came together to pass bipartisan legislation to fund the government through FY 2020.  In AIME’s December 2, 2019, letter to the House Financial Services Committee, AIME was supportive of technology upgrades for the Federal Housing Administration (FHA) and other provisions included in FY 2020 spending package.  We look forward to working with Congress and the President to promote homeownership in 2020.”

*The Association of Independent Mortgage Experts (AIME), is a non-profit national trade association created for independent mortgage brokers who play a critical role in ensuring home purchase and refinancing mortgages for the middle class, low- and moderate-income homeowners, including minority and rural households, veterans and many others in underserved communities.