The Most Important Mortgage Guidance

April 13, 2020 at 9:39 am Leave a comment

Good morning! I hope everyone enjoyed their Easter weekend. By the way, you know you have been working from home a bit too long when your dog stares at you with a look that says “What are you still doing here?”

Anyway, I spent some of the weekend looking over the avalanche of mortgage guidance that has been churned out on both the state and federal level. I’ve decided that the single best sources of information in dealing with mortgages are this joint statement issued by Federal and State financial regulators and this FAQs issued by the CFPB. Taken together, they encapsulate the major considerations your compliance team should be considering as it seeks to balance the need for compliance against the need to help your credit union members deal with the realities of the pandemic.

Most importantly, the regulators recognize that many of the timelines you are expected to adhere to in normal times cannot realistically be complied with given the onslaught of business. For example, delays in sending loss mitigation related mortgage disclosures will be tolerated so long as your credit union is making a “good faith effort” to comply with its obligations.

The one thing that the regulators stress in both of these documents is the obligation to comply with COVID-19 forbearance requests. The regulators emphasize that:

Servicers must provide a CARES Act forbearance if the borrower makes this request and affirms that the borrower is experiencing a financial hardship during the COVID-19 emergency. Servicers may not require any additional information from the borrower before granting a CARES Act forbearance.

(By the way, the bold emphasis was provided by the regulators, not me.)

Does this mean you are not going to document the forbearance? Of course not. It simply means that you grant the forbearance based on the conversation. You will follow-up by sending the member documentation indicating what has been agreed to including an attestation that the member has requested a forbearance because of COVID-19 related hardship. This approach would also comply with New York’s emergency regulation Part 119.


If all goes according to plan, this is the week your members will begin having emergency payments from the government put into their accounts. Here is a good article in the CU Today outlining some best practices credit unions may want to consider in talking to their members about their cash.


Entry filed under: Mortgage Lending, New York State. Tags: , , , , , .

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Authored By:

Henry Meier, Esq., Senior Vice President, General Counsel, New York Credit Union Association.

The views Henry expresses are Henry’s alone and do not necessarily reflect the views of the Association. In addition, although Henry strives to give his readers useful and accurate information on a broad range of subjects, many of which involve legal disputes, his views are not a substitute for legal advise from retained counsel.

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