FHLBank Topeka is committed to supporting the funding needs of our members. We recognize that many of you are assisting borrowers affected by the COVID-19 pandemic by offering loan modification and payment forbearance options. To help support you in this time, we are enacting temporary collateral relief provisions. Please read below for more details on these options.
Loans with Forbearance Plans and Modifications Agreements
We are offering increased collateral flexibility through acceptance of various types of forbearance plans and loan modification agreements. Such loans will continue to be eligible collateral, assuming the loans continue to meet all other eligibility requirements detailed in the Member Products and Services Guide (MPSG).
Refer to the Schedule of Eligible Collateral in our MPSG for more details. The first page of the schedule, page 80, shows the temporary underwriting requirement changes we are enacting.
Forbearance Plans and Loan Modifications with Electronic Signatures
We know that a “wet” signature may not always be possible in these times. For that reason, we will accept loans that have modifications or forbearance plans executed via electronic signature in compliance with the Electronic Signatures in Global and National Commerce Act (i.e. E-SIGN). The forbearance plan or modification must be accompanied by an original note that has a “wet” signature from all borrowers. Please retain the original document.
LIBOR-linked Loan Collateral Reporting Postponed
On Jan. 6, 2020, we announced that our regulator, the Federal Housing Finance Agency directed us to make changes to our Qualifying Collateral Determination (QCD) form effective with the March 31, 2020, reporting period. In light of the current operating environment for our members, new requirements to report additional information on adjustable-rate loans linked to the London Interbank Offered Rate (LIBOR) will be postponed until September 30, 2020.
We hope that this temporary relief will help you serve your customers more easily in these trying times. These options will be available until further notice. We plan to provide written notice at least 10 business days prior to ending the provisions.
If you have questions, please contact a member of our Credit team listed below:
- Lance Liby, Chief Credit Officer | 785.478.8140
- Tom Bliss, Director of Credit Administration | 785.478.8149
- Kylie Mergen, Director of Financial Services | 785.478.8203
- Amber Myers, Collateral Review Coordinator | 785.478.8195