Major economic stabilization funds are made available to U.S. businesses (including nonprofits), states and municipalities under Title IV of the CARES Act. Title IV itself is titled the “Coronavirus Economic Stabilization Act of 2020” (referred to in this summary as “CESA”).[1]
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California’s DBO Updates its COVID-19 Guidance for Financial Institutions
On March 16, 2020, California Governor Gavin Newsom released an Executive Order (N-28-20) aimed at protecting renters and homeowners from losing their homes or suffering further financial hardship as a result of the COVID-19 pandemic.
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The CARES ACT – Tax Relief
On March 27, 2020, President Trump signed into law the Coronavirus Aid, Relief, and Economic Security Act, or the “CARES Act” to provide nearly 2 trillion dollars in aid and relief to individuals, businesses, and other entities in the wake of the spread of COVID-19. Included in the CARES Act are tax and loan provisions intended to provide financial relief to people and businesses suffering as a result of the disease.
The following summarizes certain key tax-related provisions in the CARES Act.
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Overview Of The Paycheck Protection Program Under The Cares Act (Title I)
On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security (CARES) Act was enacted, an economic relief package in response to the COVID-19 pandemic. The CARES Act provides economic support at the federal level to the business sector, employees, individuals and families, and specific industries that have been impacted, including air transportation, healthcare, and education.
Summarized below are key aspects of the Paycheck Protection Program, a $349 billion SBA-administered loan and loan forgiveness program described in Division A, Title I – Keeping American Workers Paid and Employed Act of the CARES Act.
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Troubled Debt Restructuring: Phase 3 Stimulus Bill
On March 25, 2020, the Senate passed an amendment to H.R. 748, the Coronavirus Aid, Relief, and Economic Security Act (as amended, the “CARES Act”), which (as of March 26, 2020) is being considered in the House.
The complete text of the current draft of the CARES Act can be found here.
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SFA Urges the Fed to Include Non-Qualified Mortgages, MSRs and Unsecured Consumer Loans in revamped TALF
In order to properly address the impact of the Covid-19 crisis on today’s capital markets, the Structured Finance Association (“SFA”) is urging the Board of Governors of the Federal Reserve System and the U.S. Department of Treasury to “move as quickly as possible” to introduce a new version of the Term Asset-Backed Securities Loan Facility (“TALF”) program to include important consumer credit products and remove impediments that would delay the speed with which the program can become fully operational. In a March 22nd letter to the Board of Governors of the Federal Reserve System and the U.S. Department of Treasury, the SFA proposed a new version of TALF, referred to as Solutions to Power the Advancement and Revitalization of Consumer Credit (“SPARCC”), which, notably, expands the categories of assets eligible to back ABS to include non-QM mortgage loans, unsecured personal loans and MSRs. The recommended changes include:
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Update for Mortgage Lender Operations in California
On the evening of March 19, 2020, the Governor of California issued an order which requires all individuals living in the State to stay home or in their place of
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Mortgage Servicing in the Time of COVID-19
The announcement last week by Freddie Mac, Fannie Mae and other agencies that they will provide mortgage loan forbearance arrangements for up to 6 months, subject to an extension of
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Impact of COVID-19 on Municipal Finance: Restructurings Inevitable (Part 1)
“Only when the tide goes out do you discover who’s been swimming naked” – Warren Buffet
The tide has gone out on the municipal finance market.
While much of the
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UPDATE – Lenders Encouraged to Work with Customers in Response to COVID-19 Challenges
The Federal Deposit Insurance Corporation (the “FDIC”) issued updated statements on March 19, 2020 and March 22, 2020, supplementing their earlier statement on March 13, 2020, encouraging financial institutions to
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