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Below are our latest posts regarding the coronavirus pandemic.

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Main Street Lending Program – Lessons Learned

As part of the CARES Act the Federal Reserve Bank of Boston has established a special purpose vehicle (SPV) that will purchase a 95% participation in certain qualifying term loans originated by financial institutions. The terms of the loans have been written about elsewhere so we won’t reiterate them here (but would be happy to discuss them with you if you have questions). We recently helped Starion Bank with loan documents for a Main Street Priority Loan that the SPV purchased. It was the SPV’s first purchase in the country. Here are some lessons for those considering making a loan under the Main Street Lending Program umbrella:

CFPB Amends Regulation X to Allow Servicers to Evaluate Borrowers for Certain COVID-19 Related Loss Mitigation Options Based On Incomplete Application

The Consumer Financial Protection Bureau (“CFPB”) has amended Regulation X to temporarily allow mortgage servicers to offer borrowers who are experiencing financial hardship as a result of the COVID-19 pandemic certain loss mitigation options without obtaining a complete loss mitigation application.

U.S. Treasury Department Releases FAQ on the Review of Borrower’s Good Faith Certification Under the Paycheck Protection Program (“PPP”)

On May 13, 2020, the U.S. Treasury Department released FAQ 46, which discusses the SBA’s review of the good faith certification that borrowers are required to make on a PPP Loan Application. Namely, the PPP Loan Application requires borrowers to certify in good faith that the current economic uncertainty makes their request for a PPP loan necessary to support the borrower’s ongoing business operations.

CARES Act Paycheck Protection Program: Use of Agents

A lot of questions have come up about a borrower’s or lender’s use of an “agent” to help the borrower prepare its PPP application or to help the borrower or lender with any other part of the loan processing, monitoring or servicing the loan. The law says that “agents” will be paid by the lender, out of the lender’s fee. Does this mean that the lender has to pay an agent if the borrower seeks assistance and then simply informs the lender that it is using an agent? Is the lender obligated to pay an agent only if the lender has engaged the agent?

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