Responding to pressure from industry groups and members of Congress, the Federal Housing Finance Agency (FHFA) announced on April 21, 2020 that servicers of Freddie and Fannie mortgage loans will only be required to advance four months of missed payments for single family mortgage loans.  The action by the FHFA aligns the servicer advance requirements for mortgage loans in both Freddie Mac and Fannie Mae issued mortgaged-backed securities (MBS).  Prior to the change, Freddie Mac servicers were limited to a four months advance obligation while Fannie Mae servicers with scheduled payment remittance obligations were responsible for advancing missed payment regardless of borrower payments.
Continue Reading FHFA Aligns Freddie/Fannie Monthly Payment Advance Obligations

The Paycheck Protection Program (“PPP”), as enacted under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, provides federally-guaranteed loans up to a maximum amount of $10 million to qualified businesses, which can be fully forgivable, to encourage businesses to retain employees through the COVID-19 crisis by assisting in the payment of certain operational costs.
Continue Reading Computational Framework for Determining Number of Employees for Eligibility, Qualifying Loan Amount and Forgiveness for a PPP Loan

On April 14, 2020, the U.S. Small Business Administration (SBA) issued its Third Interim Finale Rule[1]   with respect to the Paycheck Protection Program (PPP), as enacted under the Coronavirus Aid, Relief, and Economic Security (CARES) Act. The Third Interim Final Rule is supplemental to the (i) First Interim Final Rule issued by the SBA on April 2, 2020, (ii) Second Interim Final Rule issued by the SBA on April 4, 2020 and (iii) Applicable Affiliation Rules fact sheet that was issued by the U.S. Department of Treasury (Treasury) on April 4, 2020 and (iv) the Frequently Asked Questions fact sheet (FAQ)[2] issued by the U.S. Department of Treasury (Treasury), which was last updated on April 15, 2020 at the time of this publication.
Continue Reading Further Expansion Of Eligibility And Additional Guidance On The Paycheck Protection Program: The SBA’s April 14, 2020 Interim Final Rule

On April 9, 2020, the Federal Reserve issued an updated term sheet for the Term Asset-Backed Securities Loan Facility (“TALF”).  Under TALF, the Federal Reserve will make an equity investment of $10 billion in a special purpose vehicle (“SPV”) that will in turn make up to $100 billion of non-recourse loans fully secured by eligible ABS.   
Continue Reading Term Asset-Backed Securities Loan Facility

The COVID-19 pandemic has caused unprecedented economic disruptions worldwide.  Businesses that were previously flourishing are now seeing rapid declines in demand and revenue, disruptions in their supply chains, and other operational interferences.  Previously projected business plans for development and expansion may no longer be feasible.  Boards of directors facing these challenges would be well served to review their legal obligations and fiduciary duties as they help guide their companies through these challenges.
Continue Reading Precautionary and Prudency Measures for Boards Addressing COVID-19 Business Uncertainties

With the World Health Organization declaring COVID-19 a pandemic on Wednesday, March 11, 2020, businesses are likely to continue to feel its effects.  When businesses are unable to perform their contractual obligations as a result of COVID-19, force majeure clauses may become important.
Continue Reading Force Majeure Clauses and COVID-19 – Can Force Majeure Clauses Excuse Performance Under New York or Delaware Law in a Pandemic?

On April 7, 2020, the U.S. Department of Treasury (Treasury) released a 4/7/2020 Frequently Asked Questions sheet (FAQ)[1] with respect to the Paycheck Protection Program (PPP), as enacted under the Coronavirus Aid, Relief, and Economic Security (CARES) Act. The FAQ is supplemental to the (i) First Interim Final Rule issued by the U.S. Small Business Administration (SBA) on April 2, 2020, (ii) Second Interim Final Rule issued by the SBA on April 4, 2020 and (iii) Treasury’s Applicable Affiliation Rules fact sheet that was issued on April 4, 2020.
Continue Reading Expansion of Eligibility and Additional Guidance on the Paycheck Protection Program (Title I of the CARES Act)

On April 3, 2020, the U.S. Department of the Treasury (Treasury) and U.S. Small Business Administration (SBA) released further guidance on the affiliation rules applicable to the Paycheck Protection Program (PPP), as enacted under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, via the Treasury’s Applicable Affiliation Rules fact sheet and the SBA’s Second Interim Final Rule[1] (collectively, the Updated Affiliation Guidance). The Updated Affiliation Guidance is supplemental to the SBA’s First Interim Final Rule that was issued on April 2, 2020.
Continue Reading Updates on the Affiliation Rules Applicable to the Paycheck Protection Program (Title I of the CARES Act)

On April 2, 2020, the U.S. Small Business Administration (SBA) released its Interim Final Rule[1], which provides further guidance on the Paycheck Protection Program (PPP) as enacted under the Coronavirus Aid, Relief, and Economic Security (CARES) Act. On April 2, 2020 the SBA also issued an updated sample application form.

The SBA’s Interim Final Rule clarifies, contradicts and provides additional interpretative guidance related to the CARES Act.  We highlight the following:
Continue Reading Updates on the Paycheck Protection Program under the CARES Act: The SBA’s April 2, 2020 Interim Final Rule

Tribal leaders and federal officials this week will begin the task of implementing the economic relief programs of the Coronavirus Aid, Relief and Economic Security Act (or “Act”) passed by Congress on March 27, 2020.  The U.S. Department of the Interior will host the first consultations  with Tribes to discuss funding formulas and eligibility rules of the $8 billion Tribal Stabilization Fund through a teleconference on Thursday, April 2, and on Thursday, April 9. The Tribal Stabilization Fund is one of three programs in the Act that Tribes might use to mitigate the downtown of their economic enterprises. Highlights of the three programs and how they might help your Tribe and Tribal businesses follow:

U.S. Department of Treasury Tribal Stabilization Fund[1]:

  • Sets aside $8 billion of the Coronavirus Relief Fund for payments to Tribal governments for increased expenditures of the Tribal government or a tribally controlled entity of the Tribal government;
  • Payments may be used to cover costs that (i) are necessary expenditures incurred due to the COVID-19 public health emergency; (ii) were not accounted for in the most recently approved budget of the Tribal government or tribally controlled entity; and (iii) were incurred from March 1, 2020 to December 30, 2020.

Continue Reading How Can the CARES Act Help My Tribe? A Briefing on Economic Stimulus for Tribes