COVID-19 Updates: NCUA Proposed Rule and FHFA Loan Extensions

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The National Credit Union Administration (NCUA) will vote on a proposed rule involving capitalization of interest at its Nov. 19 board meeting. In several letters to the agency and letters to Congress, the Credit Union National Association (CUNA) has called on NCUA to permit credit unions to capitalize interest on consumer mortgage loans in connection with loan modifications made during the COVID-19 pandemic.

Once the proposed rule has been issued, the League will provide further details.

The NCUA will also discuss the following: board briefing on the agency’s 2020 budget update and reprogramming; a board briefing on the National Credit Union Share Insurance Fund (NCUSIF) Quarterly Report; and a board briefing on the state of credit union diversity and the 2019 Credit Union Diversity Self-Assessment.

The meeting will be conducted “live” at 7 a.m. (Pacific) on Nov. 19.

FHFA Extends Temporary Policy: Purchase of Qualified Loans in Forbearance
The Federal Housing Finance Agency (FHFA) announced it is extending its temporary policy that allows Fannie Mae and Freddie Mac to purchase certain single-family mortgages in forbearance. The relief measure was set to expire Nov. 30 yet now has been extended for loans originated through Dec. 31. FHFA will continue to monitor the COVID-19 pandemic’s impact on renters, borrowers, and the mortgage market and update policies as needed.

FHFA Lengthens Several COVID-Related Loan Flexibilities
The FHFA also announced that Fannie Mae and Freddie Mac will extend several loan origination flexibilities until Dec. 31. The changes are to ensure continued support for borrowers during the COVID-19 national emergency. The flexibilities were set to expire on Nov. 30.

Extended flexibilities include alternative appraisals on purchase and rate term refinance loans (see FHFA’s Oct. 19 announcement); alternative methods for documenting income and verifying employment before loan closing; and expanding the use of power of attorney to assist with loan closings.

NCUA Posts Budget for Review and Comment
The NCUA announced that its draft staff budget for 2021 – 2022 is now available on the agency’s website for review and comment and has been submitted for publication in the Federal Register. The agency will hold a “live” public budget briefing on Dec. 2 at 7 a.m. (Pacific) on its website.

The public comment period is open until Dec. 11. You can email comments to BudgetComments@ncua.gov. Comments should provide specific, actionable recommendations.

To request a presentation at the Dec. 2 budget briefing, click here for instructions.

The draft 2021 operating budget is $315.6 million, and the draft 2021 capital budget is $18.8 million — both lower than 2020. The draft staff budget summary and detailed budget justifications can be found on the Budget and Supplementary Materials webpage.

The NCUA Board will approve a final budget at its Dec. 17 open meeting.

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