CDC Moratorium Ends; No FHLB Forbearance for New Loans

U.S. Supreme Court

Last night in a 6-3 decision, the U.S. Supreme Court ended the pandemic-related federal moratorium on residential evictions imposed by President Joe Biden's administration in a challenge to the policy brought by a coalition of landlords and real estate trade groups. You can view the court’s “unsigned” opinion here.

The justices, who in June had left in place a prior ban that expired at the end of July, granted a request by the challengers to lift the U.S. Centers for Disease Control and Prevention’s (CDC) moratorium, which would have run through Oct. 3. The CDC first issued the moratorium in September 2020 after a prior one approved by Congress expired.

We want to remind you that with California’s state eviction mortarium set to expire on Sept. 30, the Department of Financial Protection and Innovation (DFPI) is asking credit unions to assist all individuals impacted from COVID-19 by encouraging them to take advantage of the state’s COVID-19 Rent Relief Program to help cover expenses such as rent, utilities, and use housing protections to prevent evictions. How can credit unions help? Click here for communication/messaging collateral, materials and information.

FHLBSF to No Longer Make Forbearance Exception
On March 26, 2020, the Federal Home Loan Bank of San Francisco (FHLBSF) announced it would not consider a loan delinquent if it is performing in accordance with a forbearance agreement entered into as a result of a COVID-19 hardship.

However, as the economy reopens and recovers from the pandemic, FHLBSF is seeing a significant decline in new forbearance loans. Beginning Oct. 1, the bank will no longer make an exception for new forbearance loans (existing loans in forbearance are fine as long as they are not seriously delinquent). New forbearance loans will be subject to normal eligibility criteria and will become ineligible again when they are beyond 60 days past due.

Since the FHLBSF will no longer make an exception for these loans, it is asking that starting Oct. 1 FHLBSF members pledging loans under the Blanket Lien Detail or Specific Listing pledge programs revert to reporting the actual last payment date instead of overriding it with the date “February 22, 2022”, as previously instructed.

Former forbearance loans that have been modified remain eligible as long as they are not seriously delinquent. In this case the modification status should be indicated in the MCU.

For questions about data reporting, contact FHLBSF at 415-616-2757 or memberdata@fhlbsf.com. For other questions, contact your credit union's FHLBSF relationship manager.

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