Freddie Mac Revises Multifamily Forbearance Program, ABA Urges Extension of PPP
April 16, 2020
Freddie Mac revised its multifamily coronavirus forbearance program to ensure borrowers do not evict, give notice of or start an eviction of a tenant for nonpayment during the forbearance period due to any reason. The updated program also states that borrowers are not allowed to charge late fees, penalties or other charges related to tenants missing rent payments during the forbearance period.
Sen. Sherrod Brown, D-Ohio, and Rep. Maxine Waters, D-Calif., in a letter urged Federal Reserve Chairman Jerome Powell and Treasury Secretary Steven Mnuchin to help ensure the stability of nonbank mortgage servicers as they face liquidity issues due to the coronavirus outbreak. Brown and Waters wrote that the servicers are expected to be strained due to job losses, furloughs or reduced working hours and asked the financial regulators to set up funding facilities, under the CARES Act, which could help address the short-term financing needs of qualified businesses, states and localities impacted by the pandemic.
In a letter addressed to Congress, the American Bankers Association and its counterparts pressed lawmakers to “expeditiously increase funding” for the Paycheck Protection Program, or PPP, as talks continue between lawmakers and the administration on providing more cash for the plan. The bank groups said they were “gravely concerned” that funds for the PPP would run out by the end of the week. The SBA reported that total loans approved under the PPP jumped to about $311 billion from approximately $301 billion in a matter of hours.
On April 15, Treasury Secretary Steven Mnuchin and Small Business Administration Administrator Jovita Carranza also urged Congress to appropriate additional funds for the PPP and the Economic Injury Disaster Loan Program, saying that the SBA has already “processed more than 14 years’ worth of loans in less than 14 days.” They also said the SBA will be unable to approve new loans if the programs experience a lapse in appropriations.
The Fed’s latest Beige Book reported that a deep contraction in the U.S. economy is already underway and could get worse. The document is an anecdotal summary of Fed officials’ conversations with local business contacts, who reported they had “highly uncertain outlooks” and that most expected conditions to get worse in “the next several months.”
Source: S&P Global Market Intelligence
