Sign Florida Banking Permission Slip Later

Industry sign banking florida permission slip later

hello everyone and welcome to the third webinar in our disaster webinar series today we're going to hear about representing homeowners after a natural disaster with lynn dreisdell and elise cohen lynn is a consumer protection attorney with jacksonville area legal aid where she is the division chief for the consumer advocacy and litigation unit elise is a staff attorney with national consumer law center where among other things she directs their disaster response work i'm kathy greenwald the disaster coordinator attorney at legal services of north florida and i'm here today with carlin selders our disaster program assistant today if you have any questions type them in the q a box we'll try to answer them along the way and at the end of the webinar time permitting the webinar is being recorded and i'll email you the link to the recording send all the material and the cle material as well to you next week and if you look on the screen right now you can see the florida cle number after the webinar you're also going to be asked to complete a short survey of the program today and i hope you'll take the time to do that and finally i want to thank you for joining today and encourage you to come back each thursday at noon eastern time for the remaining webinars over the next five weeks and with that i'm going to pivot to our presentation um with our presenters good afternoon everyone we really appreciate your participating today um and i am honored to be doing this with elise cohen who is the consumer law guru from the national consumer law center it's been a real honor for me to work with her um and i know you're going to really enjoy the information that she has to offer as well as the other information um so this presentation was supposed to have been done in march live in march and as we all know uh march turned out a lot different than we all anticipated and so our powerpoint presentation and our presentation in general was very different in february and january and we were putting it together for a 90-minute program to take place live in march so we have pivoted and re-um drafted the powerpoint so that we also include one of the um uh biggest i guess i can say natural disasters that we have had meaning the spread of the covid virus so we have a lot of slides we're going to go through them very quickly we have included slides that we are not going to have an opportunity to get to today we're sure but we wanted you to have the information if you get and we're going to try to take um questions um as well and answer them but if there's something that you miss from today or you need to follow up or you were unable to ask today please feel free to contact either one of us after the webinar and we're happy to to tell you more or answer your questions and keeping in mind that particularly with the coveted relief this is an ever-evolving thing so things that we tell you today may not be true tomorrow or the next day so we're we're all just trying to adapt and tell you what we know as of today so um and i believe we're going to start out with a poll question and so we're just trying to see the gauge the um the audience to see how many people have tried to take advantage of the forbearance programs the different forbearance programs that have been offered um through the cares act so if you could please provide your answer i'll pause the moment and carlyn will take over from here okay i think everybody's seeing the results glad to see that that double the amount of people that have um tried to get a forbearance were successful in doing so um i see that very few on the call have tried and that may be because you don't have eligible borrowers or for other reasons but hopefully you'll have a lot more information after today that will help you as you move along and trying to take advantage and get the most and best used out of the different programs that are available okay so first we'll talk about what we had intended to talk about initially which is was was primarily what we thought would be important for um natural disasters such as hurricanes which we're pretty accustomed to here in florida so um the obviously i think when thinking of a hurricane which has a beginning and an end which is not perhaps not the same with the present other natural disaster we you know when the hurricane is passed so at that point you can take action and so first of all obviously you have to make sure everybody's safe everybody's accounted for and everything everybody's healthy and then you need to look out for is fema coming to town are there some sort of state options available for relief of all sorts you need to also contact your insurance company which is a good sign today to remember to keep your policies and perhaps all photos of everything that you have taken of value in your home you'll have all of that information together and then next once everybody is healthy and in a place where they can stay momentarily at least a person needs to think about their mortgage and the things that you do to to prepare i guess post disaster with respect to your mortgage are going to be very similar to what you should think about um in the cares act so we'll be going over that in more detail so the different options that are available fema which i mentioned which we're all familiar with the small business administration that sometimes has opportunities for people um the cares act which wasn't even a thing in march um but we will talk in great detail about that today the cdc who knew who knew that they were going to be weighing in to the coveted relief effort so we won't be talking as much about that today but it is extremely important for um particularly evictions and so we're going to be providing more information about how to access assistance post-hurricane but also now so the the first thing you need to figure out is whether or not you have your own insurance assuming that you have a mortgage or whether or not the mortgage company companies force-placed insurance because um you didn't keep the insurance for any number of reasons you need to find the policy as i mentioned and figure out just exactly what is covered and what is not in florida there's just sort of this weird thing where you have maybe three different types of insurance coverages flood wind your regular insurance and maybe even sinkhole insurance so you you have to figure out if it was a wind event or a flood event a hurricane because they can be both and then figure out what type of coverage you have and of course have your home inventory handy along with photographs i say these things like i have all up taken pictures of everything in my house and know exactly where everything is but maybe i will after the webinar so you if you need to file a claim you should there are one of the things that can either be helpful or can be a scam is this concept of a claims adjuster to help you um process your claim through with the insurance company a lot of boutique industries arise after hurricanes which we're all very familiar with and included in those are claims adjusters which sometimes take a little bit too much money from you to do what can or cannot be considered a service and then you have to look at potentials for indemnification and the responsibilities or the the insurance companies responsibilities with respect to that so the and then relating to in indemnification how much um who's getting paid where's the first money coming to um will the insurance coverage cover all the damage is there a gap um and the what i'm talking about here is the concept of um usually well always if you have a mortgage you have to list the mortgage company on your insurance policy as an also insured or lost payee so it gets can get complicated as to who gets the check to whom it's written and then what happens after that with respect to between the borrower and the insurance company which we'll talk about in the next few slides so a lot of times the check will come to the borrower but it will have the um mortgagee or the mortgage company or the servicer's name listed as lost payee so the borrower can cash the check but they can't do that until after the servicer gets involved but the problem is so frequently borrower signs check since the servicer explaining why and then learns that the servicer has deposited the check and is applying it toward the principal as opposed to repairs so that creates problems that we won't be able to get into fully today but i just wanted to point that out also um trying to see if there's coverage for personal property are repairs feasible um and and let's go to the next slide to talk about that just a little bit more so you first have to notify the servicer of the hardship and provide them good contact information generally that's going to be a cell phone so that's going to be the same after the disaster passes you have to figure out who the the owner of the loan is is it a fannie mae low and freddie mac fha va usda um and we'll talk about that more in the context of the of cares act is there equity and the can the homeowner keep making payments some of that may be a function of whether or not the homeowner has to find other arrangements and whether insurance covers those additional arrangements so in a fannie mae standard mortgage loan document meaning it's not necessarily a fannie mae loan but it's that form is utilized you can see that the insurance proceeds are supposed to be applied to fixing the property up as long as the repairs are economically feasible and the lender's security is not lessened so that's going to be usually from the mortgage contract what those two terms mean is not going to be in the mortgage contract and so is going to be left somewhat ambiguous but the courts usually look to see if the cost of repairs will exceed and i'm assuming by a pretty good margin the actual cost of the repairs and if the value of the home when it's repaired is going to be roughly equivalent to the value of the home prior to the event occurring and so lastly with respect to insurance um this this slide basically alerts you to all the potential problems that may be caused if the check is sort of floating around um u.s mail or it's sitting in the um bank account of the servicer um but a lot of but i did want to mention that a lot of the what the borrower's options are depend on if the borrower is current at the time of the disaster um and what is the borrower able to get um a contractor involved pretty quickly and just making the determinations that the house can be saved uh if i can just put it that um simply um a lot of that will have a bearing on on what happens next um and any problems with the insurance and that involved a servicer may be a good time for a notice of error or request or request for information and we're going to talk about that in great detail later in the presentation great thank you lynn can everybody hear me great so we're going to pivot now we were just talking about insurance on the home and the rest of the discussion is really going to be about the person who's paying their mortgage loan and what issues arise and really we're going to talk about it from three perspectives generally when someone's facing a hardship how does it work how does it work in the age of covid and what are the specific disaster rules and you know there are similarities and differences but first there's this other question can you go back one slide please oh sorry you're right it's the next slide um so first the question really is now we can do the next slide i apologize first the question is really who are you dealing with and what can they do for you and so that is really affected by the fact that most loans are not held by the same company that originally made the loan we have securitization on wall street where they take loans in groups and they chop them up into little pieces and they sell off different streams of income to different groups of people and you know trusts with investors and so what that means is when the homeowner is having a hard time and they're having to figure out what to do their home was destroyed they lost their income etc they may want new loan terms they may want to modify the loan and they have to figure out who to talk to about that or there may be a foreclosure or another type of lawsuit they have to figure out who to talk to and then who gets to decide if it's over they may want to get information about the loan from the company or demonstrate that the company does or does not have authority to deal with them and they want to find out who has the original loan papers or who currently has the the note that is the essentially the lien you know on the house with the information about it um and so we're going to talk just a couple of slides about that and then we'll go on and talk about hardship solutions so the servicer is the mortgage company and let me just also flag there's a huge range of who is on the webinar today there are people for whom this is your bread and butter and there are people who don't regularly work on foreclosures so we're going to just try to meet everybody's needs at the same time and we appreciate your understanding about that so a mortgage servicer is a company that takes the mortgage payments from the homeowner but they're not the same as the investor or the holder the party that actually owns the loan and is receiving those payments the service was essentially the contractor for them and so the problem with that is the servicer may accept the payments and pass them on to the trust but the servicer also has their own incentives and they don't always profit the same way that the investor does in terms of how the payments work and how they make money we could do a whole webinar just on that so what you're really going to need to know in order to help a homeowner is what kind of loan they have which is the same question as who is the investor and so we've been talking about the cares act the cares act was passed in march it was passed in response to covet it was the big relief package and there has not been another package after that there was an act passed twice actually in the house called heroes and maybe we'll see it again in the future but that didn't pass out of the senate and so we've got the cares act and what it says is if you have a mortgage that's federally backed by for example a gsc a government sponsored enterprise like fannie mae or freddie mac or you have a loan that's insured by a federal agency like it's an fha loan or a veterans administration loan or a rural loan through the u.s department of agriculture special rights if you have a loan that isn't any of those things and it's simply controlled by a mortgage pool then it's generally controlled by what's called a psa at the bottom which is a pooling and servicing agreement it's the contract between the servicer and the owner of the loan and interestingly a lot of those loans are getting access to things that are like what's in the cares act but they're not required to do so so now we're going to go on oh i'm sorry it said that psa was cut out that's a pooling and servicing agreement can people generally hear me okay so now we're going to go and we're going to talk briefly about the regular loss mitigation landscape loss mitigation is essentially assistance available to homeowners to mitigate their loss the investor's loss when there's a hardship so first we're going to give you sort of the vanilla brand and then we'll go on to covid and disaster so a decade ago when we had the financial crisis there was some reorganizing of how we think about how to help people who can't pay their mortgage and there was a program called hamp that's at the top and this was sort of the general template just to give you a sense of what it has been like and what kind of the the usual approach has been first you take the amount that people owe their rear edge and you roll it into the loan you lower their interest rate you make their term longer like maybe they only have 10 years left on their loan you could extend it out to 30 years sometimes 40 years and then if their loans still not affordable you could even take some of what they owe and just sort of put it on the end for later and the goal here was to get to a debt-to-incom ratio of 31 percent meaning let's find a threshold of affordability the rules have changed since then and there are a couple of new models now that we're going to talk about so this is before the cares act but it'll look reasonably similar with some differences once we get to the cares act into disasters so here in the first bullet you can see there are four little boxes first if someone can just pay back the money they owe because their hardship wasn't very long or they have a ton of money great they can do that if they are not in that situation but they can return to their regular mortgage payment which especially in covid some people are kind of going in and out of that you can get this thing called a payment deferral which we'll talk more about and these are the rules for fannie mae and freddie mac on this page but they also apply in some other contexts as well so if someone can make their payment they'll get a deferral if they can't resume their regular payment then they need a modification they need to change their monthly payment and if they can't even manage to afford that then they're going to end up having to leave their house and there are a variety of ways to do that through a short sale or a deed in lieu for example i think we should go on to the next slide i have my hard copy here that i'm just looking at to make sure i remember all the points i want to make so the big thing about a modification is it's supposed to lower your payment and make it affordable and the main thing you want to know if someone has a regular loan and most people who don't know what kind of loan they have they often have a gsc loan it's a fannie mae or freddie mac loan i just refinanced my mortgage yesterday and it said you know fannie mae you know uniform blah blah blah at the bottom of a lot of the pages that i signed so what fannie mae and freddie mac have done is instead of saying we're going to get a lot of information from you and figure out what you can afford they've set up a system where there's a uniform way to lower someone's payment based on the percentage of your payment being lowered that may or may not be affordable for the clients you're looking at but that is the system that they have right now and we're going to go into not very much detail but it's in the slides so there are two ways to get this kind of modification called the flex mod the borrower can ask for it or the mortgage company the servicer can figure out that the person's not making their payments and they can just offer it to the person and then wait for them to respond so this is what a flex mod looks like we're not going to go into all of the details but the key thing to know here is that you're trying to lower the payment so the person doesn't owe more than the value of their home you want the principal to not be more than 100 of the property's value or you want to lower their balance um by up to 30 percent of what they owe so it's sort of the lesser of those two but the point is you're trying to decrease the amount that they owe without trying to figure out what their income is and sort of you go through these steps so they're similar to that other waterfall except it's not about the individual and you can see here this is step five if someone asks for help early on they can even push it down to decrease their um payment by 20 and to try to get their um loan to value ratio to 80 which is much better so um the early bird gets the worm i guess is what i'd want to say there but maybe somebody doesn't have a fannie mae or freddie mac loan a lot of people have fha loans which are federally insured and they have their own set of rules and they kept their version of the old hamp they call it fha hamp and the key thing to know here is it's different from the flex mod because it's based on the borrower's income so there's a lot more back and forth but in that back and forth the goal is to actually make sure that someone can afford it and a lot of these borrowers tend to be lower income and so that's potentially helpful to them there's also something called a partial claim and of course in all of these if the person can't afford it you end up with a pre-foreclosure sale or a deed in lieu so on the next you know slide later on when we talk about code we'll talk a little bit more about partial claims and how those work i really want to emphasize the importance of the servicing center for fha loans there's an email address in the middle here it's different from other kinds of complaints they will really try to clarify what the rules are and get the servicer to do the right thing which in most other places that's not true and if you seek help from this particular servicing center and they're not giving you what you need lynn can help you get in touch with me and we'll help you get what you need we're um a regular thorn in their side which we enjoy very much and they're very very good partners so briefly um va has a lot of options we're not going to go through them all but just remember that and remember that there is this case at the bottom i don't know lynn if you want to say something about it but every kind of loan has its own system and so you want to make sure you know what you're getting um yeah just briefly that was a case um that was um handled by donato or renaldi that pro bono one of our star pro bono attorneys and he was able to uh get a defendant verdict and or judgment based upon the fact that the borrower was a veteran and he was able to prove that the lender did not go through the options provided by the secretary and allowing the veteran to try to catch up his loans before filing the foreclosure so the foreclosure was denied because they didn't follow the servicing regulations and i i think that that is the only case in florida that i'm aware that's reported um where that is has been done for the va loans there's several where if they don't follow the fha guidelines pre-foreclosure um that can be the basis for defense verdict thank you ellie okay lynn you can take it away okay so we're getting ready to talk about the cares act um and before we do that i will um we're going to launch another poll question um and so this relates to um the i think four two percent of the four percent of you who were unable who tried to get a cares at forbearance and one were unable to do so so i will pause uh check for questions or comments and ask harlan to launch the poll second full question i will mention um i know sev most of you have not um attempted to get a forbearance um so i'm not quite sure about the other parts of the cares act um and other types of borrower relief but if if you want to contact me after the webinar then i can certainly walk you through the process that might be appropriate for your client the other thing i would say about this process is it may be for a lot of you who work with clients that people are getting forbearances without you but they're going to come to you when their forbearance is ending because they can't manage to get into something affordable afterwards and so that may be another pain point in which people show up in your office right thank you uh it's interesting that the most common answer is it required too much documentation because the federal law says there is no documentation requirement which we will discuss yes so if if you responded um that the servicer required too much documentation contact me after this and i'll i'll uh walk you through putting together a notice of error how's that okay carlin i think we're ready to um move on okay so here's your your um statutory reference to the um cares act we'll we'll pass through that pretty quickly and the flor florida moratorium i know this is very um helpful for people hopefully for people who are representing defendants and evictions i understand there's been quite a bit of drama relating to the cdc um order because one i've heard it didn't have the authority to it's you know various reasons why it's being challenged um but for right now there the cdc order is in place for evictions and we will talk about foreclosure moratoria or forbearances continuing as we go along so here are some resources national consumer law center of course has some wonderful resources as well as the national association for consumer advocates if you have questions let me just say one thing about our resources which is that they include both summaries of the laws that apply and also advocacy materials but as the cares act evolves over time potentially there'll be more information on the covid page and there's a housing section yeah and we really appreciate that i know you had a large hand in that elise and we always appreciate everything the national consumer law center does to help keep us on track okay so this i think i think we've talked about it um quite a bit of the different types of loans and and what and what the acronym definitions are um and so it the first thing obviously is you need to try to figure out if your loan is a fannie freddie fha va um generally speaking if it's a va it'll be pretty obvious from the face of the documents same as truth with fha if it's fannie or freddie you can look up um by borrower ad an address but if it i mean quite often you're going to see fannie are listed on the bottom relating to what the type of document it is it doesn't mean it is a fanny loan doesn't mean it was a fanny loan it means it may be a fanny loan so and even if it was at the beginning either freddie or fannie you still need to check to make sure the other two statutory references are references that uh provide you the option of contacting a servicer to find out who the owner is and what type of loan it is and so that that's a way you can get information without being at the mercy of either the servicer's representative getting back in touch with you or the attorney for the plaintiff if you're if it's in litigation getting back in touch with you and bear in mind i'm not sure of of everyone's experience but it it has been taking services quite a bit of time to answer the phone or return messages so um this is basically additional information about what i just spoke about i did want to mention though that the a lot of the fha loans um that were delinquent were sold through the distressed asset stabilization program so even though you may have that box on your mortgage documents your bar your clients mortgage documents that say fha number et cetera et cetera doesn't mean it's still an fha loan um so you might need to check on that as well i've been getting um information from uh from my cases that are in litigation um the plaintiff's attorneys are contacting me and canceling hearings because they they say that the case is on hold i'm not quite sure what that means i will find out but these are loans that are the where it surprises me are the traditional ones because i certainly i was afraid i was going to have trouble getting them to recognize the cares act um provisions for fha and va but they're going over some of them are going overboard and conventional so that's helpful um so here is um another reference to how you can contact the different agencies involved um and also the cfpb has a um coronavirus mortgage relief opportunity i was on the phone with some folks from the cfpb yesterday their older americans division and they were begging us to please file complaints with them because they don't notice there's a problem with something unless there's a lot of large volume of complaints um i'll leave it at that since this is being recorded um but anyway if it's an older person you can even contact the office of older americans with the cfpb um if you're having trouble with your services so i have mentioned um notice of notices of error and requests for information this is something we're going to get into in great detail but just for reference this these are two opportunities that became available on january 10th of 2014 when that part of um the regex regulations became effective and these are tools that you can use to notify your lender of what you believe as an error or request for information and we will talk more about that in a few minutes okay and i think elise is going to tell talk a little bit more about how to get the forbearance yeah we're going to get into some further detail but i just want to flag a couple of things based on some questions in the chat one is everyone's going to get a copy of the slides so don't worry about writing down citations and details and also all those blue links that you see in the slides there are links in real life in the slides and so they'll be there when you get the slideshow and you you'll get you know the extra information there just we wanted to hook you up with the relevant letters and guidance that the different agencies put out and so those are embedded in those slides so i don't know how this happened but in all the editing and editing of the powerpoint um we didn't put in a slide about the foreclosure moratorium under the cares act so i just want to mention it for a second so when it passed in march there was a foreclosure moratorium for all loans affected by the cares act meaning all of these federally backed loans which means if your client has a loan that's not federally backed there is no official foreclosure moratorium unless there's one in the state and that's almost no states and even in the states that have them they're sort of these pretty please try not to foreclose moratoria they're not real in most cases so um and in florida as you saw it was just about evictions so um it was only for a couple of months the agencies all extended to the end of this year so that's really helpful um it's likely that they'll extend a little further unless there's a miraculous um recovery for the country sooner um but that doesn't mean that people don't owe money and aren't in danger of immediately being in foreclosure when the moratorium's over it just means that right now there's not supposed to be one and we have heard of cases where there are foreclosures but know that that's a violation of the moratorium the other thing i want to say is the cares act is not part of any consumer statute it doesn't have any obvious way to directly enforce the provisions in it there might be some creative ways that we describe in a later slide about how to try to do that but for the most part companies are supposed to be following the rules and if they're not and it's a federally backed loan there are government agencies who theoretically care about that and lynn and i can help you with that so the big tool that's available in a forbearance and really i want to emphasize that i think covid is different from natural disasters in this way is that forbearances are the most common form of help that people are getting and in a natural disaster the damage is such that people are normally looking for a longer-term solution even up front um and there's usually a moratorium to give them that sort of cushion before they get that longer term solution so in the cares act you get a forbearance which is essentially permission not to pay your mortgage temporarily and this is what the statute provides it can be asked for either orally or in writing it doesn't have to be in writing and the borrower basically has to state that they're having a financial hardship due to covet 19. that's all it says it could be that the person was sick the person's unemployed they have increased expenses because they're you know working at home or they're they have to work less because they have to take care of their kid who's doing zoom school in the next room any of those are coveted emergencies and my understanding is that services are being relatively flexible about that definition and here's the key thing related to the survey from before no supporting documentation needed all you have to do is say you're having the hardship otherwise it's a violation of the cares act so as i just said before the forbearance doesn't mean you don't know the money later it means right now you're either making no payments or you're making reduced payments but later that amount is going to need to be repaid and also if someone doesn't have an escrow account where they're paying their taxes and insurance to the mortgage company which then makes t eir payments for them then they still owe those amounts and they're going to need to be paying attention to that even if they have a forbearance and the other thing i want to point out is you can get a forbearance and then if some months you're able to pay you are allowed to do that and you're still in forbearance so very briefly it's in section 4022 for people who want to go find it and the key thing here is it's unclear how long you can get a cares act for barons for because there is no covered period in the section because it's sausage making and i will tell you that i personally was on the phone with senate staff at five o'clock in the morning you know negotiating and fending off terrible provisions that we were able to get out even though we didn't get everything we wanted in and so a lot of people are relying on the next section which basically says till the end of the year or earlier if the national emergency ends earlier i want to point out that fha put out some guidance saying that you can only get a forbearance until the end of october and they're in the process of fixing that because they messed up and our understanding is that they're going to extend that we hope till the end of the year at least and we hope longer than that and when we spoke to fannie mae and freddie mac they said our availability of forbearance is related to covid it's not related to the deadline statutorily meaning if in february someone is affected by kovid but the cares act hasn't been extended and you have a fannie mae or a freddie mac loan you can still get a forbearance under their rules and you're not stuck with the regular rules okay so one question is can you make your payments do you need a forbearance and then the next question is how do you pay that money back and so most of the rules now are relatively similar and so there are a lot of details in here but the big picture is this and this is a slide about what fannie mae and freddie mac do the gses they have this thing called the payment deferral which is based on something similar that fha has called the partial claim and so what it basically is is um you take the amount that you didn't pay before and you put it at the end of the loan it was like a non-interest bearing loan for the time you didn't pay you put it at the end there were no extra fees and it's a balloon meaning you owe it all at the end of your loan and you either can refinance or you're selling your house or you take out a new loan just sort of depends on your circumstances that is at the top of the so-called waterfall in terms of what your options are the deferral the first bullet is just about how the cfpb put out something making it possible to provide these things to people without going through a whole application so the first option is a deferral and someone could get that during a forbearance they should ask for it if they don't fannie mae and freddie mac are going to send an offer of one to the person anyway and they're going to have a couple of weeks to accept it um fha and other types of companies probably are not going to just mail you an offer they're going to want to talk to you if you can't afford to resume your payments and you weren't also relatively on time with your loan then you're going to need a modification instead of a deferral so fha has put out some guidances this is a slide just showing you what the guidance is and then the next slide which we can go to now has a little bit more information this is the so-called covid waterfall for fha loans and this is the mortgage letter which you can just google that and you'll get all the details but essentially the partial claim is like the deferral if you can resume your payments and you weren't you know 30 days or more late then you can just put the amount you didn't pay at the end of your loan and start resuming your payments if you need some sort of lowering of your payment and you weren't late there are these special options available the last bullet is showing you that if the person was more than 30 days late and a lot of people were already late before kova they're just more late now then they're going to just go back into a regular loss mitigation regime where they're going to get for fha purposes fha hemp or for any other kind of loan they're going to need to lower their monthly payment so this is a slide explaining what the fha partial claim looks like and that's similar to the deferral and the main point here is it's at the top of the waterfall like it is for the gses and it's a non-interest-bearing lien so that's what we were just describing so it's just a reminder about that this next slide is very important i'll just say a moment about it and then the the long case is described here again so i think somebody asked me about the citation the key here is the cares act itself is not privately enforceable but when companies do the wrong thing there are a lot of other arguments you can make you can make an argument that the regulator the regulatory requirement um is there and should be complied with um you can try to enforce the regulations directly you can say it's a condition precedent to foreclosure meaning they have to do that before they're allowed to start a foreclosure you can use the loan contract especially if it's an fha loan to incorporate the notion that you know the contract says this the company has to follow fha's rules and since they're not doing that they can't enforce the contract and then i'm going to turn this over to lynn to talk about this again if she wants to um and if not i'll just go on and talk about reverse mortgages briefly is there anything else you want to say about that lynn oh thank you elise uh just very briefly laws the wells fargo is the the fha analogy or analog case to the long which references the va pre-foreclosure servicing requirements there are a lot of cases like laws that you can probably find by shepardizing it um but but but there are several cases in relating to um denial of or rejection or a defense um uh victory if it is an fha or va loan um or just not there okay we're going to talk about reverse mortgages for a few minutes now and we'll also be some information in the disaster section about it um as some of you may know the thing about a reverse mortgage is it's a reverse mortgage and so the person receives money from the company rather than makes payments they might get it in a lump sum they may get it monthly and it allows a lot of older people to age in place essentially at the same time the homeowner still needs to be paying their taxes and insurance and if they don't that's essentially a conditioned precedent to getting to keep the mortgage and so when people hit financial trouble or they have health problems often they're unable to keep paying their taxes and insurance and they may have challenges related to that and these rules address that question the other issue that these rules address is if two people are married and one person is substantially older than the other it may be that the older person got the reverse mortgage and the other person who's younger doesn't get the reverse mortgage they're not on the loan but if the older person dies and that's the loan then the younger person's not on the loan and may have a hard time getting the mortgage company to pay attention to them to accept their payments and especially to lower the payment if they need a lower payment we're going to go back to that other slide again and i'm going to now go through the details on slide 45. okay so these are specific covered rules just for reverse mortgages and the key here is it's similar to what the cares act provides and we didn't really go into this detail before so i'll explain it now which is you can get a forbearance for up to six months and then you can ask for an extension of that forbearance for up to another six months that's how long the cares act forbearance is in general so that also applies if you have a reverse mortgage except here the payment isn't the mortgage loan payment it's the payment of the taxes and insurance and if you're not able to make that then your mortgage is in trouble and so here it's giving you an extension for the amount of time to kind of get your house in order which is important and the other thing that it's extending is if the borrower on the reverse mortgage dies and the non-borrowing spouse is still in the home they have certain deadlines that they need to meet and those deadlines are also extended by the same deadline in timeline of up to a year the other thing is that there may be people who have reverse mortgages who fell behind on their taxes and insurance and they're already in an active repayment plan for those property charge defaults and they can get a forbearance on that payment plan under the cares act so hud has been very flexible there and that's been very helpful now we'll do the next slide so there's two categories of people who um are the non-borrowing spouse or the survivor if you know if my spouse died and he was on the reverse mortgage or she was on the reverse mortgage and i won't then i have to figure out what to do as the survivor to get acknowledged and to essentially get to stay in my house and to keep the mortgage going and so for people who got their loans more recently you know after august 2014 or kind of the middle of the month um they there's a new rule and people essentially have 90 days after the person dies to raise their hand but that timeline is being extended by the cares act for another year and so that's very helpful that entire extension is applying in that circumstance and then on the next slide you'll see the rule for most people who have reverse mortgages got them before 2014 and there's a very specific process they need to go through the surviving spouse to raise their hand and be able to stay in their home and that entire process has also been extended for up to year so the actual deadline for raising their hand was last march right when the pandemic was starting and instead what we've got is an extra year because of the cares act so that's been very very helpful so just a quick reminder that borrowers who can't pay their mortgage can really benefit from a chapter 13 bankruptcy the thing about a chapter 13 is you can make arrangements for paying your mortgage in a chapter 13. this is a specific slide about how it could help for a reverse mortgage borrower um and there are some details in here i was going to turn it over to lynn so she can just walk you through a couple of these and then she'll take it from here to start the disaster section thank you elise um and i did want to mention there there are still some questions that remain relating to reverse mortgages and and the differing uh extensions and timelines and elise and a couple of her colleagues worked on a very thorough letter to hud just to try to get some clarification on some of the gaps um in the in discrepancies between the mortgagee letters um themselves and and prior um prior uh custom with reverse mortgages so that's available if um anyone wants to contact me directly but i did want to mention that the two cases at the bottom uh particularly machad harman was a case that was handled by our office and michal was a similar one where a survivor was filing a bankruptcy case to try to pay the amounts that were due under the reverse mortgage for survivors and the bankruptcy court allowed the heirs to proceed with a repayment chapter 13 repayment plan as survivors because the death of the borrower remained person was not considered a it is a default in a reverse mortgage death is a default but it was not the type of default that would harm the person who was trying to get relief through a chapter 13 bankruptcy and pay off the loan so next we're going to talk about disaster options i'm going to talk about just a few very minor things and go through these really quickly and then turn it back over to at least for the forbearance but so you you figured out what type of loan you've checked on the foreclosure moratorium um specifically nationally you have eviction may or may not be relevant so what i'm going to talk about are credit reporting and late charges and then at least we'll cover the forbearance and loss mitigation so credit reporting we don't have a lot of guidance um for all types of loans but for you can see what the what freddie and fanny have said about suspension of credit reporting um and for freddie no reporting if in for negative reporting if they're in a forbearance or repayment or uh temporary payment plan and it's very similar to um freddie but not as as broad as fanny's temporarily suspending credit reporting for delinquencies but there's some some differences in older versions of their their guidelines so it's somewhat up in the air um given the state of fcra litigation now i'm not sure how um how much i'd want to push whether or not what what they're doing is right or wrong but you have that information um so fha they uh have the servicer must suspend reporting of delinquency um if it's disaster related and the borrower is doing what they're supposed to be doing which is basically nothing if they're in forbearance va encourages suspension of credit reporting and the usda no delinquency reporting can i just say one thing which is we didn't put in a credit reporting slide for covid the covet policy is different which is whatever you were before you still are so if you were on time when you needed a forbearance because you saw that you wouldn't make your next payment you'll still be reported as on time if you were late you're still supposed to be reported as late thank you thank you um and so late charge suspension um you see freddie fannie somewhat similar to their stances on credit reporting um i'm not going to go through those and you can see the fha va and usda rules or guidelines relating to credit reporting and so i'll turn it over to you elise um on the forbearance so um before we talk about forbearance i just want to say a couple of things because this is my last group of slides and then lin's gonna finish up one is i didn't say this at the beginning because we were kind of in the middle but i just want to thank you for having me there are a lot of really great people in florida doing incredible work and it's a real honor to be a part of that thank you to kathy for organizing thank you to carlin for keeping track of everything and let me just say that it's a real honor to work with lynn when i first started at the national consumer law center lynne was already illuminary and she was already walking around at our conferences knowing a ton and it's really a great opportunity to be here with everybody um that's all i wanted to say other than everything we're saying today could evolve and please stay tuned so um this is about a forbearance that you might be able to get um in a disaster and we're just walking you through what you know the policies are for the gses on this slide and then in the next policy in the next slide it's for the next one over and there are 12-month forbearances and that's very similar to what you can get under covid um except the rules are slightly different in terms of you know what you might have to show or whether you have to get it renewed after six months um i want to point out that on this slide that you know while fannie and freddie essentially require the offering of a forbearance if you need it and you can meet their standard i mean that's also true for fha the va and usda only encourage forbearances and we haven't been able to fix that so other than the forbearance the real question especially after a natural disaster is can you afford your you know to resume your mortgage payment or are you going to need to make a change and so this is i think the clearest waterfall of all the ones and all the slides that we have this is for fannie mae and freddie mac it starts with this payment deferral that's the plan that if you can resume your payments you resume your mortgage payments and the amount that you owed goes on the back as a balloon there used to be these other modifications for people who have done this before the disaster mod and the extend mod which were you know essentially what was similar about them is that your loan term got longer nd the big difference is now that in the deferral your loan term's not getting any longer you're just going to owe the total at the end of your loan term and as of now the deferral is the required top of the waterfall and then if you can't resume your payment you're essentially looking to get a loan modification we're very interested in learning whether this flex modification from the gses which is anything but flexible it's a one-size-fits-all payment decrease based on a percentage of your payment we're very interested in knowing whether those are affordable for your clients um ever since before they were announced we've been very concerned about that so if you have any intel about that i'd really appreciate you sharing it and then obviously if you can't afford a modification um there are different ways to lose your house more or less gracefully so fha has a an automatic foreclosure moratorium of 90 days that happens after a natural disaster and that's very helpful and you can see here in the later slide in the later bullet um information about these non-borrowing spouses that we were talking about before so their deadlines get extended the last bullet is interesting if you've got a pr presidentially declared you know major disaster area then the deadline for the company to file the foreclosure is extended for 90 days um so that the person has you know an opportunity to um apply so this is after the moratorium you've got the 90-day moratorium and then the company has to file foreclosure 90 days after that if payments aren't being made the tricky part is they can file foreclosure earlier they don't have to wait that 90 days but they may and so your client theoretically should try to get a loan modification before that 90 days is over but the foreclosure may start anyway and we're trying to get them to fix that they have a very similar policy for covid and we're concerned about it let us know if you see problems with that so there are two kinds of fha mortgages the regular kind forward mortgages and the reverse kind so this is a slide about the forward mortgages you can get a special kind of modification not just the regular fha hamp where essentially you can extend you know the loan up you know to a 30-year loan and you can get one each time there's a disaster which in florida might mean that some people have certainly had more than one and then there's again this partial claim and it can be combined with the loan modification so you could use some of the tools of the modification to lower the payment and then also stick some at the end and that is often what makes the payment um affordable for people just one um term to share with people this idea of the trial payment plan the trial payment plan is you know three months at the beginning where the person has to show essentially that they can afford to make the payment i know we're at time and i think we're going to go over for just a few minutes and so we want to get this information to you guys and we appreciate it um so a big issue about reverse mortgages is the whole idea is that you're aging in place and so you're supposed to live in the home but after a disaster and sometimes just because you're sick and you're in the hospital but certainly after a disaster people are displaced and so these slides are about ways in which people have faced challenges showing that they're still in the home and that it is their primary residence even if they're living in a trailer because their home is uninhabitable and so essentially the forward rule which doesn't technically apply to hecam's but to reverse mortgages which are also called heckums um is that as long as you can show that you're intending to return to the home then you get to stay um on the mortgage and so that's an ar an argument you can make similarly here even though the rule isn't as clear and also the second bullet is talking about how you can also designate other people because especially reverse mortgage borrowers may have a hard time keeping up with everything so lynn knows a lot more about hecam occupancy issues but let me just say that people have a variety of options if they're facing default because they're perceived as having moved out they can move back in they can show documentation that it's still their primary residence like utilities or other bills like that and they can describe that it was a displacement just due to a natural disaster and if they're having other challenges with certification requirements and they're over 80 there are also additional accommodations that they can get through the at-risk extension there was a woman in puerto rico who was displaced after hurricane maria and she got a notary essentially to help her put a letter together with her legal services lawyer proving that she lived in the home and she signed it with her thumb because she didn't write and um you know it was a big deal but she worked with her lawyer and she sent it in and she got to stay in her home so there are ways to do that but it requires you know some hoops to go through just briefly on the last slide here and i'll turn it back over to lynn these are disaster rules for va in usda there are some options you know for va there's no more trial period plan the big thing i would say about usda loans is figure out if it's a direct loan or a guaranteed loan the rules are very different the rules here are for guaranteed loans the direct loan options are much more limited thank you for having me thank you so much elise for doing this i i i can't just say how much i really appreciate it and i know that we are past time but i understand from kathy that we have a few more minutes so i wanted to thank you kathy and carlin all as always have really made this an easy process for us um and so if y'all will just give me the the where am i the five four three two one when you want me to get ready to stop and i'll just i'll shut it down but i'll keep going until you tell me and if i don't get through everything again you're welcome to contact me um individual and i will um answer any questions you have okay great and i was going to say if you have to leave early don't worry we're recording all of it um so you will get that as well as all the material okay so now we're going to talk now this uh is a poll question um that i'd like for folks to answer and we'll do this one very quickly um basically we're and we'll go ahead and launch that while i uh babble on um carlin basically we're just going to find out a general idea of the people who are attending familiarity with regex and the notice of error and request for information options and again this is reverse mortgages um which at least did perfect on um and regex are kind of my two things i really like to do so please feel free to contact me about either but at least gave you all the information you need okay so okay um so it doesn't look like there has been a robust um notice of error and request for information use within the audience and that's fine um i think if you is something that you're interested in you'll find them very useful tools so and we'll keep going so the the cfpb servicing rules found in regex specifically 12 cfr 1024 41 with respect to loss mitigation um applies only to mortgage servicers so you have to make sure if you're going to send and i'm going to talk specifically about notices of errors and requests for information just to keep it simple um if you are sending a notice of error to the entity that owns your loan uh for instance if you're if you have a fannie mae held on loan and you send a letter to fannie mae telling them that their servicer is not handling the mortgage correctly they'll probably ignore it without consequence uh perhaps but if you want to if your true intent is to get information or to make the servicer aware of an error you want to make sure that you send it to the right person you send it to the right address if if it is not sent to the designated servicer's designated notice of error request for information address it can be ignored without consequence and that's a bit of an overstatement but we'll just go with that you just want to make sure you send it to the right place if they the servicer does not have a notice of error or request for information address on the monthly statement sent to the borrower or or on their website you can send it to wherever you think will be most effective but you really need to make sure that you're getting it you have the right address so it's gonna cover that most first lien loans um fannie freddie fha va etc but not for open-ended lines of credit or reverse mortgages now i will say that specifically relating to the notices of error and the request for information not the site i just provided for loss mitigation you can send a notice of error and i've used them rather robustly in my reverse mortgage practice and you can also send a request for information because although a reverse mortgage is not included in the loss mitigation portion because you don't make payments you the regex notice of error and request for information does do apply to reverse mortgages um so but these are the differing areas that were that the um cfpb servicing rules um regex applied to there's a real nice two-pager um printout that they the cfp put out back in 2014 that's the simplest and most uh thorough explanation i have seen about what the the what is covered under the cp under the cfpb servicing rules in regex and what is not so the next slide um in the next slide um so what is in request for information exactly what it sounds like and what's a notice of error exactly um what it sounds like if you're trying to figure out who owns the loan to figure out what type of loan you what type of relief options you have a request for information may satisfy that or a request under the federal truth and lending act notices of error i would just i mean you can read the slide but obviously i'd make like to make a couple of comments about notices of error one and again i can't emphasize this enough send it to the right address actually have an error if you're going to send out one of these and tell the servicer what you believe the error is and then tell them you know exactly the things that you need um information or documentation to help explain the error and ask them to look into it and they can write you back and say we don't think there's an error deal with it or they can fix the error so if you if you find yourself and you will in many instances having to send a second notice of error make that equally as targeted and specific i know it has been a practice at the beginning just to throw everything in the kit plus a kitchen sink and a notice of error a request for information please don't do that if you want it to be taken seriously ask for five bits of information tell them five errors and if you send a second one of either make it just a little bit different than the first one you did think um dispute letters and fcra litigation so these are the types of things and then we'll move on from that slide without me going into it any further um of the the different things that you can um claim that there has been an error relating to i just worked on an amicus brief that was filed in a case where the court circuit court i believe it's second i could be wrong on that but um anyway they were the court found that that loss mitigation and and default servicing was not um servicing pursuant to the cfpb regulations and so you couldn't send a notice of error relating to um a a survey loss mitigation servicing issues i'm assuming the same with the rfi um some very talented people who are members of naca um and uh with the help of nclc and also nclc was on the amicus brief that we wrote um in that case and so hopefully it will the court will do the right thing in that instance so not covered the beginning of the loan the underwriting of the loan um duplicative over broad um one year after the loan has been satisfied um so these are the sort these are sort of things i was already talking about but remember origination and underwriting by definition are don't really relate to the collection or servicing of the loan so that is somewhat intuitive and so the good thing about and i've just got about two more minutes the good thing about notices of error and resp and request for information this provides the servicer they have deadlines they have timelines i usually send mine certified mail return receipt requested because they have five days to acknowledge receipt in 30 to 45 days depending on what you're what you're requesting to respond um if it's a dual tracking issue and keeping in mind dual tracking is when the servicing arm of the um the loan they're going forward with loss mitigation and maybe even even putting you in a trial payment period but the litigation side is going full steam ahead as if nothing was going on on the loss mitigation side and and i wish i had the time to tell you several stories that would just shock you about individuals in different departments with servicers do not communicate and they communicate even less with their attorneys so if you assume that the attorneys know what the servicer's doing they don't the attorney knows what the owner's doing they don't that the accounting department knows what the servicing depart the collection department knows they don't they don't communicate with one another at all which you can use to it to your advantage but it can also be very frustrating if you're not using these tools okay i've talked about that quite a bit so i won't mention anything further about that and we can move on to the next slide so in a response to the notice of error the response has to be either the error has been corrected or after reasonable investigation we don't think there's an error and this is why and that last part is very important jeff golott um was a big part of the underlying case uh renfro which you can find is a very good case on uh notices of error with service or violations so i believe we are nearing the end um this is a book that you must have if i can say that um it is um it is really the guidebook that that i mean i think every legal services program in the state has a set of these that are dog-eared um and maybe not so much now that everything is electronic but for old folks um like me um they still like to use books mine's pretty worn and so that basically is the end of the presentation for today so i'll stop talking um there are several more slides and you're welcome to um contact me if you would like and i may bug elise some if she doesn't mind but we really really appreciate your patience with us and going over the time we appreciate your patience with us going so quickly um and we just appreciate what you're doing and just keep doing it all right thank you lynn and elise for the presentation today and thank you all for attending um and as i said earlier you'll get all this information probably next week we'll get the video um the powerpoint and all of the information along with an email address from lynn and elise and um i hope to see you back next thursday because next thursday we'll be talking about renters um so thank you all and thank you carlin um for helping today bye everybody bye bye thanks bye