Monthly Regulatory Compliance Change Management Summary

The May Regulatory Compliance Change Management Summary is linked for your reference.

This month’s Regulatory Compliance Change Management conference call will take place on Thursday, June 25th at 3pm EST.

To register for the monthly call, please email compliancechgmngt@cenlar.com. For your convenience, the session will be recorded and made available to clients who are unable to attend. If you registered for a call in the past, you will be automatically registered for this call and do not need to register again.

Any questions related to the monthly summary, overview process, or specific regulatory change items can be sent directly to compliancechgmngt@cenlar.com. The Compliance Department will respond within two business days of receipt (excluding weekends and holidays).

On the May report, the three items listed below, while showing as “Out of Compliance” (effective date has passed and we are beyond our standard implementation timeframe), have been deemed low risk. The rationale for the risk rating is included, and these items continue to be implemented.

• Q6382 85 FR 17721: Notification of Guarantee Loan Payment Deferrals for RBCS, RHS, and RUS loans (Effective 3/31/2020):  – The Rural-Business Cooperative Service (RBCS), Rural Housing Service (RHS), and Rural Utilities Service (RUS) agencies of the Rural Development mission area, collectively “Agency,” will temporarily allow lenders with guaranteed loans with the Agency to offer payment deferrals unilaterally to their customers who may be experiencing temporary cash flow issues due to the COVID–19 pandemic. This has been deemed to be a low risk since impacted borrowers are currently under forbearance plans. Cenlar is updating Loss Mitigation Procedures and letters to address the process of offering deferments upon expiration of forbearance plans.
• Q6035.2 MPF Marketing Bulletin 2020-01 (Effective 5/01/2020):  – Effective May 2020, all monthly delinquency reports must be submitted to the Mortgage Partnership Finance (MPF) Program via eMAQCS Plus, their new default management system. This change item has been deemed to be a low risk since Cenlar is finalizing the Loss Mitigation, Escrow Hazard, and Corporate Litigation procedures regarding the use of eMAQCS Plus.
• Q6087.2 FHLMC Bulletin 2020-2 (Effective 5/04/2020): – Servicers do not need to obtain prior written approval from the Federal Home Loan Mortgage Corporation’s (FHLMC), aka Freddie Mac, to service Cooperative Share Loans. Additionally, servicers that service Cooperative Share Loans do not need to be approved to sell these loans to FHLMC. Servicers may service Cooperative Share Loans for FHLMC provided the Servicer complies with the requirements within the Guide book. This change item has been deemed to be low risk. Cenlar is finalizing the Loss Mitigation and Corporate Litigation procedures surrounding servicing Cooperative Share Loans.

NOTEWORTHY ITEMS FOR THOSE OF YOU DOING BUSINESS IN MONTANA AND THE DISTRICT OF COLUMBIA:

• Q6825 Montana Department of Administration – TEMPORARY EMERGENCY RULE – (Effective 4/24/2020): The Montana Department of Administration issued a temporary emergency rule waiving the first semiannual assessments for state-chartered banks and supervisory fees for credit unions. The rule will expire on August 22, 2020. 
  • The Montana Department of Administration has issued the following temporary emergency rule:
    • The semiannual bank assessment that would normally be billed in June 2020 and collected in July 2020 pursuant to ARM 2.59.104 is waived.
    • (2) The semiannual credit union assessment that would normally be billed in June 2020 and collected in July 2020 pursuant to ARM 2.59.401 is waived.
    • The intent of this temporary emergency rule is to reduce the assessments that the department will receive from banks for the first half of and to reduce the fees the department will receive from credit unions for the first half of 2020. Because this rule is temporary, the rule will expire on August 22, 2020. The rule will only affect fees for the first half of 2020. The rule will not affect fees for the second half of 2020 or any fee thereafter. The department cannot know what economic conditions may exist in January 2021 when the second semiannual assessments are due. Therefore, the department will defer the issue of future fee waivers until the economic impacts of the COVID-19 pandemic are clearer.

Cenlar is aware of this emergency temporary rule from the Montana Department of Administration and its requirements. While Cenlar is not responsible for the semiannual bank assessment fees, Clients who do pay these assessments should be aware that these fees, normally billed in June and collected in July, will be waived.

• Q6891 Washington DC B23 757 – Act 23-326 (Effective 5/27/2020): The District of Columbia has passed B23 757 (Act 23-326), which amends the COVID-19 Response Supplemental Emergency Amendment Act of 2020 B23 733 (Act 23-286) (see Q6562) and the COVID-19 Supplemental Corrections Emergency Amendment Act of 2020 B23 735 (Act 23-299) (see Q6733). These two acts were merged into the COVID-19 Response Supplemental Temporary Amendment Act of 2020 B23-734 (Act 23-323 (see Q6876). The amendments include adding language to the Mortgage Relief provisions and extending the date for reporting approved deferment applications to June 4, 2020. Additionally, this legislation omits loans covered under the CARES Act and makes various other technical changes.
  • The amendments to the COVID-19 Response Supplemental Emergency Amendment Act of 2020 (D.C. Act 23-286) are underlined below.
    • The Mortgage Relief provisions do not apply to a mortgage loan that is a federally backed mortgage loan as defined by the CARES Act.  
    • Mortgage lenders are prohibited from either requesting or requiring a lump sum payment from any borrower making payments under a deferred payment program.
    • An application or summary of procedures for borrowers to apply for the deferment program must be made available online and by telephone.
    • A mortgage lender who approves an application for deferment pursuant to this section shall, on or before June 4, 2020, provide to the Commissioner notice of all approved applications on a form prescribed by the Commissioner.
    • After the initial submission prescribed in this paragraph, a mortgage lender who approved an application for deferment pursuant to this section shall provide the Commissioner with a list of all new approvals in 15-day intervals for the duration of the public health emergency and for 60 days thereafter.
    • The Commissioner may request information on the number and nature of approvals between 15-day intervals.

Cenlar is aware of this emergency amendment act from the District of Columbia and its requirements. While Cenlar is not responsible for the above reporting to the Commissioner, Clients who do report this data should be aware that failure to comply may result in regulatory sanctions, fines, or penalties.