Mortgage Forbearance FAQs

Under the CARES Act, borrowers in a federally backed mortgage loan experiencing a financial hardship due, directly or indirectly, to the COVID-19 emergency, may request forbearance by making a request to their mortgage servicer and affirming that they are experiencing a financial hardship during the COVID–19 emergency. In response, servicers must provide a CARES Act forbearance, that allows borrowers to defer their mortgage payments for up to 180-days and possibly longer.

The Consumer Financial Protection Agency has provide FAQs related to the COVID-19 Emergency - Click Here.

What's New? CARES Act Pension Account Relief

IRA Contribution Deadline Extended. The CARES Act has extended the due date for filing Federal income tax returns and making Federal income tax payments from April 15, 2020 to July 15, 2020. Contributions made between April 15, 2020 and July 15, 2020 must be designated as either previous tax year (2019) or current tax year (2020) contributions. It is likely that the extension of the IRA contribution deadline will create 5498 reporting changes. See IRA Contribution Deadlines in The Gold Book.

Required Minimum Distributions (RMDs) Suspended for 2020. The new required beginning date to take RMDs for an IRA, SEP IRA, SIMPLE IRA or retirement plan such as a 401(k) is April 1 of the calendar year following the calendar year in which the individual attains age 72. Now, because of the CARES Act, RMD payments for 2020 are waived, including those for inherited IRAs. Additionally, this covers the first RMD. So an owner who turned 70 1/2 in 2019 and didn’t take the first year’s RMD, can now wait until 2021 to satisfy the requirement. Read more about Mandatory Distributions in The Gold Book.

Qualified Coronavirus-Related Distributions (QCDs). The Coronavirus Aid, Relief, and Economic Security (CARES) Act allows eligible participants to take penalty-free withdrawals of up to $100,000 between January 1, 2020 and December 31, 2020 for those who meet certain criteria related to the coronavirus (COVID-19). A qualified individual may take coronavirus-related distributions from multiple sources, such as both a qualified retirement plan and an IRA, but the total amount of distributions eligible for favorable tax treatment is limited to $100,000.

QCDs include adverse financial consequences as a result of being quarantined, furloughed, laid off or having work hours reduced; being unable to work due to a lack of child care as a result of COVID-19; or closing or reducing hours of a business owned or operated by the individual due to COVID-19.

CARES Act Distributions are more favorable than hardship withdrawals—including those for Federal Emergency Management Agency (FEMA)-declared disasters—because:

• •              Income tax on the distribution may be paid over a three-year period;
• •              Participants will have the ability to repay the amount withdrawn to an eligible retirement plan within three years;
• •              Repayments will not be subject to the retirement plan contribution limits;
• •              Eliminates the 10% “early distribution” penalty that generally applies to distributions from retirement plans and IRAs before age 59½; and
• •             

More is found in The Gold Book under Penalty Exceptions.

Plan Amendments. Plan sponsors may begin operating their plans in accordance with the CARES Act immediately.  Plan sponsors will generally have until the end of the first plan year beginning on or after January 1, 2022 to amend their plans. It lets people make early withdrawals from retirement accounts without paying the typical 10% penalty. Learn more about Plan Amendments here.

Pension Loan Provisions and Repayment Requirements. For retirement plan loans to qualified individuals made between March 27, 2020 and September 23, 2020, the CARES Act:

-       Increases the maximum loan amount from $50,000 to $100,000; and

-       Allows participants to take the full amount of their vested benefit as a loan, rather than limiting the loan amount to 50% of their vested balance.

The CARES Act also delays the due date for loan repayments for qualified individuals that are due between March 27, 2020 and December 31, 2020 for 1 year, and extends the maximum 5-year repayment period accordingly. See Plan Loans Under the CARES Act.

Safe Harbor Hardship Withdrawals. Under regulations issued in September 2019, a new safe harbor was created for hardship withdrawals due to a Federal Emergency Management Agency (FEMA)-declared major disaster. Accordingly, if FEMA declares a major disaster in a state as a result of COVID-19, a safe harbor hardship withdrawal would be available for 401(k) or 403(b) plans to cover a participant’s expenses and losses (including loss of income)—provided that their home or workplace is located in an area designated by FEMA for individual assistance.

Critical Infrastructure and COVID-19

On March 28, 2020, the Cybersecurity and Infrastructure Security Agency (CISA) issued version 2 of guidance on Essential Critical Infrastructure Workforce: Ensuring Community and National Resilience in COVID-19 Response.  CISA version 2 guidance expands the categories of essential financial services sector workers and is now this SR letter's attachment.  Please refer to the version 2 guidance for the list of essential critical infrastructure workers.

Click here for details.

NYS Construction Mandate

THe Empire State Development has issued updated guidance regarding essential construction activity. This new guidance limits types of construction that are deemed "essential". Section 9 of the guidance is reproduced below. The full guideance on Governor Cuomo's Executive Order 202.6 may be found here: https://esd.ny.gov/guidance-executive-order-2026

9. Construction

• All non-essential construction must shut down except emergency construction, (e.g. a project necessary to protect health and safety of the occupants, or to continue a project if it would be unsafe to allow to remain undone until it is safe to shut the site).
• Essential construction may continue and includes roads, bridges, transit facilities, utilities, hospitals or health care facilities, affordable housing, and homeless shelters. At every site, if essential or emergency non-essential construction, this includes maintaining social distance, including for purposes of elevators/meals/entry and exit. Sites that cannot maintain distance and safety best practices must close and enforcement will be provided by the state in coordination with the city/local governments. This will include fines of up to $10,000 per violation.
• For purposes of this section construction work does not include a single worker, who is the sole employee/worker on a job site.

What's New? Elimination of Reserve Requirements

The Federal Reserve Board reduced reserve requirement ratios to zero percent, effective March 26, 2020.

Read more in The Gold Book.

What's New? COVID-19 Mortgage Relief

The Office of the Comptroller of the Currency (OCC), along with the Board of Governors of the Federal Reserve System (Federal Reserve) and the Federal Deposit Insurance Corporation (FDIC) (collectively, the agencies), recognize the potential for Coronavirus Disease (also referred to as COVID-19) to adversely affect the customers and operations of financial institutions. The agencies encourage financial institutions to work with affected customers and communities, particularly those that are low- and moderate-income. The agencies recognize that such efforts—when consistent with safe and sound banking practices and applicable laws, including consumer protection laws—serve the long-term interests of these communities and the financial system.

See more in The Gold Book in the Community Reinvestment Act section and the Mortgage Servicing Rules section.

Also: New York Rules and New Jersey Rules.

What's New? Families First Coronavirus Response Act (FFCRA)

On March 18, 2020, President Trump signed the Families First Coronavirus Response Act (FFCRA), into ‎law.  FFRCA will help the United States combat and defeat COVID-19 by giving all American businesses with fewer than 500 employees funds to provide employees with paid leave either for the employee's own health needs or to care for family members. The legislation will enable employers to keep their workers on their payrolls, while at the same time ensuring that workers are not forced to choose between their paychecks and the public health measures needed to combat the virus. The FFCRA includes two major overhauls to leave programs for employers:

• an amendment to ‎the Family and Medical Leave Act (FMLA), adding new Public Health Emergency Leave, and
• the ‎enactment of Emergency Paid Sick Leave for reasons related to the Coronavirus.

Both ‎programs go into effect on April 2, 2020, and run through December 31, 2020.

The following updates may be found in The Gold Book:

Federal Laws Regulating Wages and Hours: Families First Coronaviurs Response Act (FFCRA)

New York State COVIC-19 Leave Laws

New Jersey Earned Sick for Earned Sick Leave and COVID-19 Benefits and Protections

What's New? NYS COVID-19 Financial Relief

On March 21, 2020, Governor Andrew Cuomo issued Executive Order 202.9 invoking new powers from a law passed to combat the COVID-19 pandemic to temporarily suspend or modify laws necessary to assist or aid in coping with a declared State disaster emergency. On March 3, 2020, the Governor signed into law legislation that expanded his authority to temporarily suspend, modify, or issue directives in response to a declared State disaster emergency. That legislation also accompanied a $40 million appropriation to the Governor to respond to the COVID-19 pandemic.

The Governor modified the Banking Law to deem as an unsafe and unsound business practice a refusal to grant a forbearance to any person or business who has a financial hardship as a result of the COVID-19 pandemic.

The Superintendent of the Department of Financial Services is directed to ensure that, under reasonable and prudent circumstances, licensed or regulated entities provide consumers an opportunity for a forbearance of mortgage payments to any person or entity facing financial hardship as a result of the COVID-19 pandemic. The Executive Order also directs the Superintendent to promulgate emergency regulations to effectuate this directive.

Finally, the Superintendent is directed to promulgate emergency regulations to restrict or modify Automated Teller Machines (ATMs) fees, overdraft fees, and credit card late fees for the period of the declared State disaster emergency. The regulations are directed to take into account the financial impacts on consumers, the safety and soundness of the licensed or regulated entity, and applicable federal requirements.

Under the newly enacted law, the Governor has the power to suspend, modify, or issue directives during a declared emergency for 30 days which may be extended for an unlimited number of 30 day periods with consent of the legislature after each subsequent period. Unless the Governor elects to extend the suspension or directives, they will expire on April 20, 2020.

Also see The Gold Book.

NYS COVID-19 Guidance

BACKGROUND
Now a global pandemic according to the World Health Organization, 2019 Novel (New) Coronavirus was first detected in China and has spread worldwide. This virus causes a disease called COVID-19 and can lead to flu-like symptoms including fever, cough and shortness of breath. There are more than 100,000 confirmed cases in a growing number of countries internationally and the virus is now spreading in the United States.

There are ongoing investigations to learn more about this virus. Senior citizens and people with underlying respiratory conditions are at particular risk, but everyone must take the highest level of precautions right now in order to prevent spread in the community.

Individuals who are experiencing symptoms and may have traveled to areas of concern, or have been in contact with someone who has traveled to these areas, should call their health care provider before seeking treatment in person.

This is a rapidly changing situation. Please check this site and the CDC's COVID-19 webpage regularly for updates.

New York State Department of Health has established a website and telephone number that provide the latest, most comprehensive information about the State’s response to the virus.

NYS DOH Coronavirus Hotline: 1-888-364-3065 (fully language accessible)
NYS DOH Coronavirus Website: https://coronavirus.health.ny.gov/home

Other Helpful Resources:

The U.S. Chamber of Commerce: https://www.uschamber.com/coronavirus
Small Business Administration: https://www.sba.gov/
Centers for Disease Control and Prevention: https://www.cdc.gov/coronavirus/2019-ncov/travelers/index.html
NYS Department of Labor: https://www.labor.ny.gov/home/
NYS Department of Financial Services: https://www.dfs.ny.gov/

What's New? Providing Financial Services to Hemp Related Businesses

Banks are no longer required to file suspicious activity reports (SAR) for customers solely because they are engaged in the growth or cultivation of hemp in accordance with applicable laws and regulations. For hemp-related customers, banks are expected to follow standard SAR procedures, and file a SAR if indicia of suspicious activity warrants.

Learn more in The Gold Book. 

Proposal to Modernize CRA Regulations Underway

Since 1977 the Community Reinvestment Act has steered trillions of dollars into neighborhoods across our country helping to reinvigorate those communities by meeting their credit needs and investing in vital community development projects. A recent proposal will help ensure CRA remains an effective and relevant tool to encourage more lending, investment, and services in the communities banks serve, including low- and moderate-income (LMI) neighborhoods.

The proposed rule would improve the CRA rules for everyone through four basic improvements. First, the proposed rule would clarify what counts for CRA credit by articulating clear standards and requiring agencies to publish an illustrative list of qualifying activities. We can eliminate the guessing by community members and banks as to what counts for CRA credit. Second, the proposal preserves assessment areas in the local areas around branches and would require banks that draw a large portion of their deposit outside of their facilities-based assessment areas to designate additional assessment areas wherever they have significant concentrations of deposits. Third, the proposal would evaluate CRA performance more objectively by assessing what portion of a bank’s retail lending is targeted to LMI individuals and areas as well as measuring the impact of that activity by comparing the value of a bank’s CRA qualifying activity with its deposits in each assessment area and at the overall bank level. This approach considers the units of activity in each major retail business line and the dollars the bank is committing to CRA activities in the communities it serves. Fourth, the proposal would improve the transparency and timeliness of reporting. Better reporting will allow stakeholders to gauge banks’ performance throughout the evaluation cycle and will help speed up regulatory decision making.

The proposal would also allow small banks the option to be evaluated under the existing framework or opt in to the proposed evaluation method.

This is an important step toward making CRA work better for everyone.

What's New? 2019 Tax Filing Deadline Extended

The federal income tax filing due date is extended from April 15, 2020 to July 15, 2020. 

This extension results from President’s natural emergency declaration as a result of the COVID-19 virus. Taxpayers do not need to file any additional forms or call the IRS to qualify for this automatic federal tax filing and payment relief.  

Since contributions to an IRA must be made by the annual tax filing due date, the contribution deadline is also July 15, 2020.

What's New? Revised “A Guide to HMDA Reporting: Getting It Right!”

The Task Force on Consumer Compliance of the Federal Financial Institutions Examination Council recently developed a revised version of “A Guide to HMDA Reporting: Getting It Right!” (Guide). The updated Guide is intended to assist financial institutions in complying with the Home Mortgage Disclosure Act (HMDA) as implemented by the Consumer Financial Protection Bureau’s (CFPB) Regulation C. This Guide applies to HMDA data that financial institutions are required to collect beginning on January 1, 2020 and must submit by March 1, 2021. The Guide provides helpful background information and an easy-to-use summary of certain key requirements, including those relating to institutional coverage, transactional coverage, and data collection, reporting, and disclosure requirements.

Read more in The Gold Book.

Quick link to the guide.

What's New? NYS Lactation Accommodations

Under the New York City Human Rights Law, employers must provide reasonable accommodations for employees to pump and/or express breast milk at work. Each person’s experience breastfeeding and pumping is unique, and employers must reasonably accommodate those unique needs. Click here for details in The Gold Book. 

What's New? NYS SHIELD Act

On July 26, New York's governor signed the "Stop Hacks and Improve Electronic Data Security" (SHIELD) Act, requiring businesses to implement safeguards for the "private information" of New York residents and broadening New York's security breach notification requirements. 

Every employer with employees in New York must comply with the SHIELD Act because "private information" includes an individual's name and Social Security number.

For details and requirements, click here.

What's New? Cost of Living Adjustments

The Internal Revenue Service announcd cost of living adjustments affecting dollar limitations for pension plans and other retirement-related items for tax year 2020. For details see:

Cost of Living Adjustments for Pension Plans

Traditional IRA Deductions

Roth IRA Contribution Limitations

Other Real Estate Owned: Final Rule

The Office of the Comptroller of the Currency (OCC) published a final rule on other real estate owned (OREO) activities for national banks and federal savings associations. OREO refers to real estate acquired in satisfaction of debts previously contracted and real estate no longer used or planned to be used to conduct banking activities. The final rule is effective January 1, 2020.

The final rule:

• clarifies and streamlines the OCC's existing OREO rule for national banks.
• updates the regulatory framework for OREO activities at federal savings associations.
• makes technical amendments to the capital rules, including on provisions related to OREO.

Note for Community Banks:

The final rule applies to all national banks and federal savings associations.

OCC Releases Bank Supervision Operating Plan for Fiscal Year 2020

The Office of the Comptroller of the Currency (OCC) has released its bank supervision operating plan for fiscal year (FY) 2020.

The plan provides the foundation for policy initiatives and for supervisory strategies as applied to individual national banks, federal savings associations, federal branches, federal agencies, and technology service providers. OCC staff members use this plan to guide their supervisory priorities, planning, and resource allocations.

Supervisory strategies for FY 2020 focus on:

• cybersecurity and operational resiliency.
• Bank Secrecy Act/anti-money laundering (BSA/AML) compliance management.
• commercial and retail credit underwriting practices and oversight and control functions.
• impact of changing interest rate outlooks on bank activities and risk exposures.
• preparedness for the current expected credit losses (CECL) account standard, and preparation for the potential phase-out of the London Interbank Offering Rate (LIBOR).
• technological innovation and implementation.

What's New? SECURE Act Makes Significant Changes to Retirement Accounts

The SECURE Act (Setting Every Community Up for Retirement Enhancement) became effective January 1, 2020 and makes sweeping changes to Retirement Accounts.

Important highlights include:

• Age Limit Eliminated for Traditional IRA Contributions

Beginning in 2020, the new law eliminates the age limit for traditional IRA contributions (formerly 70 ½). Now, those who are still working can continue to contribute to a traditional IRA, regardless of their age. See Eligibility in The Gold Book.

• RMD Age Raised to 72

The SECURE Act also raises the age for beginning RMDs to 72 for all retirement accounts subject to RMDs. IRA owners reaching age 70 ½ in 2020 catch a break and will not have to take their first RMD in 2020 now that the RMD deadline has been extended to age 72. See Mandatory Distributions and When Benefits Must Begin in The Gold Book.

• New Exception to the 10% Penalty for Birth or Adoption

The SECURE Act adds a new 10% penalty exception for birth or adoption. It is limited to $5,000 per individual over a lifetime. The birth or adoption distribution amount can be repaid at any future time (re-contributed back to any retirement account). See IRS Penalty Exceptions and Withdrawals Prior to Age 59-1/2 in The Gold Book.

• Elimination of "Stretch" IRA

Beginning for deaths after December 31, 2019, the stretch IRA is replaced with a ten year rule for the vast majority of beneficiaries. The rule requires accounts to be emptied by the end of the tenth year following the year of death. There are no annual RMDs. Instead, the only RMD on an inherited IRA is the balance at the end of the 10 years after death. For deaths in 2019 or prior years, the old rules would remain in place.

There are five classes of “eligible designated beneficiaries” who are exempt from the 10-year post-death payout rule and can still stretch RMDs over life expectancy. These include surviving spouses, minor children, disabled individuals, the chronically ill, and beneficiaries not more than ten years younger than the IRA owner.

See Accounts of Deceased IRA Holders and When Benefits Must Begin in The Gold Book.

Updated Life Expectancy Tables

The IRS has issued proposed regulations revising the life expectancy and distribution period tables used for determining required minimum distributions (RMDs) from qualified retirement plans, individual retirement accounts (IRAs), annuities, and other tax-favored employer-provided retirement arrangements. The proposed regulations would affect participants, beneficiaries, and plan administrators of qualified retirement plans and other retirement arrangements, as well as owners, beneficiaries, trustees, and custodians of IRAs and annuities. The updated tables generally are proposed to be applicable for distribution calendar years beginning on or after January 1, 2021.

Plan Amendments

Amendments for any required modifications are not required to be incorporated into the plan document until IRS guidance is published. It is expected that such amendments will be issued to be effective with plan year 2022. At that time, the IRS will provide the date by which amendments must be adopted. See The SECURE Act in The Gold Book.

2020 Standard Mileage Rates

The Internal Revenue Service has issued the 2020 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes.

Beginning on Jan. 1, 2020, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:

• 57.5 cents for every mile of business travel driven, down 1/2 cent from the rate for 2019.
• 17 cents per mile driven for medical or moving purposes, down 3 cents from the rate for 2019.
• 14 cents per mile driven in service of charitable organizations.

More information may be found here on IRS.gov.