Consumer Credit Applications Return to Pre-Pandemic Levels

Consumer credit applications, including for mortgages, car loans and credit cards, have mainly returned to pre-pandemic levels, according to a report from the Consumer Financial Protection Bureau.

New mortgage applications saw an initial decrease but were still above usual levels by May 2020 and remained so 12 months later. Following that recovery, new mortgage inquiries showed the same seasonal patterns as in prior years, although they consistently exceeded their usual volume by 10 to 30 percent.

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 CDC Recommends Masks in Public Indoor Settings in High Transmission Areas

This week, the Centers for Disease Control and Prevention (CDC) updated its guidance and is now recommending that fully vaccinated people wear a mask in “public indoor settings in areas of substantial or high transmission.”  While the guidance does not specifically define “public indoor settings,” it may include spaces such as branch lobbies or other areas in banks where customers may gather.  The guidance was updated as a result of the high transmission rates of the COVID-19 Delta variant.

To read the updated CDC guidance, click here.

SBA Issues Direct PPP Loan Forgiveness Guidance

The Small Business Administration (SBA) recently announced that it will begin accepting Paycheck Protection Program (PPP) loan forgiveness applications directly from borrowers for loans of $150,000 or less.  As part of this effort, the agency issued guidance to implement the new direct borrower forgiveness process, which is an “optional technology solution that SBA is providing to PPP lenders that will leverage SBA’s existing and proven platform.”

Banks that are PPP lenders must opt-in to the direct borrower forgiveness program.  Participating institutions will receive a single secure location for their borrowers with eligible loans to apply for forgiveness through the platform using the electronic equivalent of SBA Form 3508S.  Once a bank is notified that a borrower has applied for forgiveness directly, the institution must review the loan forgiveness application and issue a forgiveness decision to SBA.

The forgiveness platform will begin accepting applications from borrowers on August 4, 2021, and SBA also noted that it will issue additional guidance to lenders regarding the opt-in process and how borrowers and lenders will access the platform.

To read more, click here. To opt-in to the direct forgiveness program, click here.

Treasury Expands Vaccination Paid Leave Tax Credit

In related news, the Treasury Department announced this week that it will allow certain eligible employers to claim tax credits for providing paid time off to employees to take a family or household member or certain other individuals to get vaccinated, or to care for a family or household member or certain other individuals recovering from the vaccination.

As we reported previously, Treasury announced a tax credit under the American Rescue Plan Act of 2021 earlier this year that allows small and midsize employers with fewer than 500 employees to claim refundable tax credits that reimburse them for the cost of providing paid sick leave and family leave to their employees due to COVID-19, including leave taken to receive or recover from COVID-19 vaccinations.

To read more, click here.

Biden Administration Announces New COVID-19 Relief Programs for Homeowners with HUD, VA and USDA Loans

Late last week, the Biden Administration announced new relief initiatives to help mortgage borrowers with loans through the Department of Housing and Urban Development (HUD), Department of Veterans Affairs (VA) and the Department of Agriculture (USDA) avoid foreclosure after they exit forbearance.  According to the announcement, the steps will “bring federal agency options closer in alignment with payment reduction and loan modification options for borrowers with Fannie Mae and Freddie Mac mortgages.”

Specifically, HUD will begin offering a standalone partial claim option for borrowers who are able to resume their current mortgage payments, as well as a loan modification option that would extend the term of the mortgage to 360 months at market rate and targets reducing the borrowers’ monthly principal and interest portion of their monthly mortgage payment by 25 percent.  In addition, USDA and the VA will begin offering new alternatives for borrowers to help them achieve up to a 20 percent reduction in their monthly mortgage payments.

To read more, click here.