CREF Policy Update May 13, 2021

Commercial and multifamily developments and activities from MBA relevant to your business and our industry.

1. Federal Judge Vacated CDC Eviction Moratorium but Paused Impact

On Wednesday, a D.C. Circuit Federal Judge issued an opinion and order vacating the Center for Disease Control and Prevention’s (CDC) nationwide eviction moratorium, ruling the CDC exceeded its authority. Hours later, the Department of Justice (DOJ) announced it would appeal the court’s ruling on behalf of the CDC. The DOJ also requested the court stay its order vacating the moratorium pending the appeal. The court granted a temporary administrative stay to provide time to rule on the DOJ’s motion for a stay.

• Why it matters: The CDC order is currently scheduled to expire on June 30, 2021.
• What’s next: The DOJ will file an appeal from the court’s order vacating the moratorium. The judge in this case will rule on the DOJ’s motion for a stay of the order vacating the nationwide moratorium, pending completion of the appeal.

For more information, please contact Bruce Oliver at (202) 557-2840 or Grant Carlson at (202) 557-2765.

2. New York Governor Signs Eviction and Foreclosure Moratorium Extension 

On Wednesday, New York Governor Andrew Cuomo signed into law an extension of the state moratorium on residential and small landlord evictions and foreclosures.

• Why it matters: The legislation extends the state moratorium on residential eviction and eviction for small-business tenants and foreclosures for some landlords until August 31, 2021.
• What’s next: MBA is working with state trade groups to follow and respond, if necessary, to new developments.

For more information, please contact William Kooper at (202) 557-2737 or Grant Carlson at (202) 557-2765.

3. CFPB, FTC Issue Letter to Landlords; CFPB Issues Disclosure Rule 

On Monday, the Consumer Financial Protection Bureau (CFPB) and the Federal Trade Commission (FTC) sent a joint letter to the nation’s largest apartment owners reminding them of their obligations under the ongoing CDC national eviction moratorium.

• Why it matters: Monday was also the effective date for the CFPB’s interim final rule imposing a requirement on landlords to disclose the CDC eviction moratorium in connection with an eviction action.
• What’s next: MBA will continue to work with trade association partners to encourage the administration to refrain from extending the CDC eviction moratorium.

For more information, please contact Bruce Oliver at (202) 557-2840 or Grant Carlson at (202) 557-2765.

4. FHFA Publishes Final Rule on GSE ‘Living Wills’

This week, the Federal Housing Finance Agency (FHFA) announced the finalization of a proposed rule that would require Fannie Mae and Freddie Mac (the GSEs) to develop resolution plans, or “living wills.” These living wills, similar to those required by the largest banks, would be designed to facilitate a rapid and orderly resolution if the GSEs must be placed into receivership. The final rule, which will be implemented largely as proposed, will require the GSEs to demonstrate how core business lines would be maintained under such a scenario.

• Why it matters: FHFA has placed a strong emphasis on addressing safety and soundness concerns with the GSEs, and living wills are seen as a tool to preserve the viability of core operations and minimize systemic risk resulting from the failure of one or both of the GSEs.
• What’s next: FHFA also published a fact sheet summarizing the final rule. MBA will continue to work with FHFA on future rulemakings related to the GSEs’ safety and soundness, as well as actions to reduce the disruptive nature of limits on purchases of second homes and investor properties, or the use of the cash window.

For more information, please contact Sasha Hewlett at (202) 557-2805.

5. Commercial and Multifamily Mortgage Delinquencies Decreased in April

Delinquency rates for mortgages backed by commercial and multifamily properties decreased again in April, reaching the lowest level since the onset of the COVID-19 pandemic. This is according to the latest monthly MBA CREF Loan Performance Survey, released on Monday.

• What it says: The balance of commercial and multifamily mortgages that are not current decreased again in April to its lowest level since April 2020. Loans backed by lodging and retail properties continue to see the greatest stress, but also the most improvement.
• Jamie Woodwell, MBA’s Vice President of Commercial Real Estate Research, said, “New and early-stage delinquencies have fallen significantly from earlier in the pandemic, but later-stage delinquency rates have stayed high, as lenders and servicers work through the options for troubled properties. Vaccine rollouts, strong consumer balance sheets, and pent-up demand are all positive signals, both for new delinquencies and for working out troubled properties.”

For more information, please contact Jamie Woodwell at (202) 557-2936.

6. Updated RIHA Study: Less Than 10 Percent of Homeowners and Renters Have Missed More Than Two Payments during the COVID-19 Pandemic

On Wednesday, MBA’s Research Institute for Housing America (RIHA) released a first-quarter 2021 update of its study, “Housing-Related Financial Distress During the Pandemic.” The study contains innovative household survey data on rent, mortgage, and student loan payment patterns from the Understanding America Study (UAS), an internet panel survey of over 8,000 households specially tailored to analyze the impact of the pandemic.

• What it says: Slightly under 5 million households did not make their rent or mortgage payments in March 2021, an improvement from December 2020 and the lowest number since the onset of the COVID-19 pandemic. Overall, 23.7% of renters and 14.2% of homeowners have missed at least one housing payment during the pandemic, but only 8.6% of renters and 6.8% of homeowners missed more than two payments. The study found that 37.1% of student debt borrowers have missed more than two payments.  
• Edward Seiler, Executive Director, RIHA, and MBA’s Associate Vice President, Housing Economics, says, “RIHA’s study continues to provide an accurate, real-time picture of households’ ability to make their housing and student debt payments during the COVID-19 pandemic. The expected acceleration in hiring and economic growth during the rest of the year should help most affected households resume their housing and student debt payments before expanded unemployment benefits expire at the end of September.”  

For more information, please contact Eddie Seiler at (202) 557-2739.

7. State Trackers

• State eviction moratorium and legislative activity tracker available here.

For more information, please contact William Kooper at (202) 557-2737 or Grant Carlson at (202) 557-2765.

8. Upcoming and Recent MBA Education Webinars on Critical Industry Issues

MBA Education continues to deliver timely programming that covers the spectrum of challenges, obstacles and solutions pertaining to our industry. Below, a list of upcoming and recent webinars, which are complimentary to MBA members:

• Key FDCPA Compliance Issues and Considerations – May 18
• Harnessing and Leveraging Data in Today’s CRE Markets – May 18
• Introduction to Commercial Mortgage-Backed Securities – May 19
• CONVERGENCE: The Future Is Female: How Women Are Shaping the Future of Housing – May 26
• Retail 3.0: Re-envisioning Retail – May 26
• Benchmarking for Performance and the Performance Ratios Every Mortgage Banker Must Know – June 24

MBA members can register for any of the above events and view recent webinar recordings by clicking here.For more information, please contact David Upbin at (202) 557-2890

MBA members can register for any of the above events and view recent webinar recordings by clicking here.

For more information, please contact David Upbin at (202) 557-2890.