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Lowenstein Sandler LLP

Lucas C. Maranhao

Lucas C. Maranhao

Associate 

Expertise

  • Corporate
  • Debt Financing
  • Corporate Governance & Compliance
  • Capital Markets & Securities

WSG Practice Industries

Activity

Lowenstein Sandler LLP
New Jersey, U.S.A.

Profile

Lucas advises clients on a broad array of corporate legal matters. His practice focuses on securitization transactions, asset purchases and sales, public and private mergers and acquisitions, and general corporate governance issues.

Prior to joining the firm, Lucas interned for a Washington, D.C. law firm, where he investigated potential FDCPA and TCPA claims. Before entering the practice of law, Lucas worked for the Massachusetts Department of Telecommunications and Cable, where he negotiated resolutions to consumer disputes, researched state regulations governing telecommunication and cable companies, and compiled detailed case files for use in settling consumer complaints.

Bar Admissions

    New Jersey

Education

Duke University School of Law (J.D. 2018)
Northeastern University (B.S. 2015), Psychology and Political Science, cum laude
Areas of Practice

Capital Markets & Securities | Corporate | Corporate Governance & Compliance | Debt Financing | Mergers & Acquisitions | Mortgage & Structured Finance | Private Equity

Articles

TALF 2020 Update
Lowenstein Sandler LLP, April 2020

On April 9, 2020, the Federal Reserve Bank of New York (the Federal Reserve) announced updates to the 2020 Term Asset-Backed Securities Loan Facility (TALF). The updates include expanding the eligible underlying asset classes to include both newly originated collateralized loan obligations issued on or after March 23, 2020, and legacy commercial mortgage-backed securities (CMBS) issued prior to March 23, 2020...

The Revival of TALF–TALF 2020 (or TALF 2.0)
Lowenstein Sandler LLP, April 2020

In response to the current credit crisis triggered by the COVID-19 pandemic, on March 23, the Federal Reserve Bank of New York (the Federal Reserve) revived the Term Asset-Backed Securities Loan Facility (TALF) first established in 2008. TALF was created to increase consumer access to business and consumer loans by providing a source of liquidity for certain newly issued asset-backed securities (ABS) backed by such loans...

Key Structured Finance and Secondary Market Loan Trading Provisions of the CARES Act
Lowenstein Sandler LLP, March 2020

On March 27, 2020, President Trump signed into law the Coronavirus Aid, Relief, and Economic Security (CARES) Act (the “Act”). This alert summarizes key structured finance and secondary market loan trading provisions of the Act...

Additional Articles

On March 27, 2020, President Trump signed into law the Coronavirus Aid, Relief, and Economic Security (CARES) Act (the “Act”), and the President signed it into law. This alert summarizes key structured finance and secondary market loan trading provisions of the Act. 

Single Family Residential Mortgage Loans

  • Between February 1, 2020, and June 30, 2020, a mortgage borrower with a federally backed mortgage loan related to a 1-4 family residence who has suffered a financial hardship directly or indirectly caused by the COVID-19 emergency may, regardless of delinquency status, request a forbearance of their principal and interest mortgage payment by directly requesting such forbearance from their mortgage servicer.
  • For purposes of such forbearance requests, a “federally backed mortgage loan” is any mortgage loan (i) guaranteed by the FHA, (ii) insured under Section 255 of the National Housing Act, (iii) guaranteed under section 184 or 184A of the Housing and Community Development Act of 1992, (iv) made by the Dept. of Agriculture, (v) guaranteed or insured by the Dept. of Agriculture or the Dept. of Veterans Affairs, or (vi) purchased or securitized by the Federal Home Loan Mortgage Corporation or the Federal National Mortgage Association.
  • Such forbearance shall be granted for up to 180 days, and the forbearance period may be extended an additional 180 days at the borrower’s request.
  • During the forbearance period no fees, penalties, or interest shall accrue beyond the amounts scheduled or calculated as if the borrower made all contractual payments on time.
  • The servicer shall require no documentation beyond the borrower’s attestation that they have suffered a financial hardship directly or indirectly caused by the COVID-19 emergency. 
  • At the request of the borrower, either the initial or extended forbearance period may be shortened.
  • During the 60-day period beginning on March 18, 2020, no servicer of a federally backed mortgage loan may initiate any judicial or nonjudicial foreclosure process, move for a foreclosure judgment or order of sale, or execute a foreclosure-related eviction or foreclosure sale.

Multifamily Residential Mortgage Loans

  • Until the earlier of December 31, 2020 or the termination date of the national emergency related to the COVID-19 outbreak (the “Covered Period”), any borrower with a federally backed mortgage loan related to a multifamily (5 or more families) residence who (i) was current on their mortgage loan as of February 1, 2020, and (ii) affirms to their mortgage servicer that they have suffered a financial hardship directly or indirectly caused by the COVID-19 emergency may request a forbearance of their principal and interest mortgage payment by making an oral or written request for such forbearance from their mortgage servicer.
  • For purposes of such forbearance requests, a “federally backed mortgage loan” is any mortgage loan that (i) is made in whole or in part, or insured, guaranteed, supplemented, or assisted in any way, by any federal agency, (ii) is made under or in connection with a housing or urban development program administered by the Secretary of Housing and Urban Development or a federal agency, or (iii) is purchased or securitized by the Federal Home Loan Mortgage Corporation or the Federal National Mortgage Association.
  • The mortgage servicer shall document the hardship and forbearance shall be granted for up to 30 days, and the forbearance period may be extended for two additional 30-day periods at the borrowers request, provided such request is made (i) prior to the end of the Covered Period and (ii) 15 days prior to the end of the current forbearance period.
  • At the request of the borrower, the forbearance period may be discontinued.
  • During the 60-day period beginning on March 18, 2020, no servicer of a federally backed mortgage loan may initiate any judicial or nonjudicial foreclosure process, move for a foreclosure judgment or order of sale, or execute a foreclosure-related eviction or foreclosure sale.
  • Any multifamily borrower that receives a forbearance may not (i) evict a tenant solely for nonpayment, (ii) charge any late fees, charges, or penalties to any nonpaying tenant, (iii) provide any tenant with a notice to vacate, or (iv) require a tenant to vacate before the date that is 30 days after the date such notice was provided.

Business Loans

  • The Act creates a new type of U.S. Small Business Administration (“SBA”) loan program called the “Paycheck Protection Program.” General information regarding the Paycheck Protection Program can be found here.
  • Loans made under the Paycheck Protection Program (“covered loans”) are eligible to be sold in the secondary market consistent with rule under the current SBA Section 7(a) program.
  • Repayment of a covered loan is subject to deferral for a minimum of six months and a maximum of one year.
  • Until June 30, 2020, if a covered loan is sold on the secondary market and an investor declines to approval a permitted deferral request of a lender, the Administrator of the SBA shall purchase the covered loan so that the impacted borrower may receive such deferral.

Student Loans

  • All federal students loan payments shall be suspended through September 30, 2020, and all interest accruing thereon for such period shall be waived.
  • A “federal student loan” is a student loan made under the William D. Ford Federal Direct Loan Program and the Federal Family Education Loan Program.
  • All suspended payments shall be treated as paid for purposes of credit reporting agency reporting.
  • For the purpose of any federal public service loan forgiveness or loan rehabilitation program, all suspended payments shall be treated as if the payment was made.
  • Servicers of federal student loans shall suspend all involuntary collection payments, including wage garnishment, reduction of tax refund, and reduction of social security benefits, through September 30, 2020.
  • For a summary of responses by private lenders and the states to the COVID-19 emergency with respect to student loans, see here.

Consumer Credit Reporting

  • If a servicer makes a payment accommodation with respect to a current credit obligation or account of a consumer that has not been charged-off and the consumer honors the terms of the accommodation (including, if applicable, by not making payment where no payment is due), the servicer shall report the credit obligation or account as current.
  • If a servicer makes a payment accommodation with respect to a noncurrent credit obligation or account of a consumer that has not been charged-off and the consumer honors the terms of the payment accommodation, for as long as the payment accommodation is in effect, the servicer shall report the credit obligation or account as maintaining the delinquency status in effect before the payment accommodation was made.
  • If a servicer makes a payment accommodation with respect to a noncurrent credit obligation or account of a consumer that has not been charged-off and the consumer brings the credit obligation or account current while the payment accommodation is in effect, the servicer shall report the credit obligation or account as current.
  • For purposes of consumer credit reporting, a “payment accommodation” includes an agreement to defer one or more payments, make a partial payment, forbear any delinquent amounts, modify a loan or contract, or any other assistance or relief granted to a consumer who is affected by the coronavirus disease 2019 (COVID-19) pandemic during the covered period.
  • For purposes of credit reporting, the “covered period” shall mean the period from January 31, 2020, until the later of 120 days from the date of enactment of the Act or 120 days after the termination of the COVID-19 national emergency.

Relief from Troubled Debt Restructurings

  • During the period from March 1, 2020, until the earlier of the December 31, 2020, and 60 days after the termination of the COVID-19 national emergency (the “applicable period”), financial institutions may elect to suspend (x) U.S. GAAP requirements for loan modifications related to the COVID-19 pandemic that would otherwise be categorized as troubled debt restructurings and (y) the determination that loan modifications caused by COVID-19 pandemic effects are troubled debt restructurings.
  • Any suspension will be applicable for the term of the loan modification, but only for modifications occurring during the applicable period and for loans that were not more than 30 days delinquent as of December 31, 2019. Modifications may include forbearance arrangements, interest rate modifications, repayment plans, and other similar principal or interest payment deferrals or delays.
  • The appropriate federal banking agency (as that term is defined in § 3 of the Federal Deposit Insurance Act and including the National Credit Union Administration) of each financial institution will defer to the financial institution’s decision to make a suspension of the relevant U.S. GAAP requirements and/or troubled debt restructuring determinations.
  • If financial institutions elect to make the suspensions discussed above for modified loans, the financial institutions should maintain records regarding the amount of loans involved and the appropriate federal banking agencies are permitted to collect data on such loans for supervision.

Relief from CECL Standards

  • Banks and savings associations whose deposits are insured by Federal Deposit Insurance Corporation, credit unions, bank holding companies, and any of their affiliates are not required to comply with the Financial Accounting Standards Board Accounting Standards Update No. 2016-13 (“Measurement of Credit Losses on Financial Instruments”).
  • The primary applicable standard is the current expected credit losses (“CECL”) methodology used for estimating credit losses allowances.
  • The suspension of this requirement will end on the earlier of December 31, 2020, and the termination of the COVID-19 national emergency.

Relief under the Act has been considered ‘Phase III’ of the federal government intervention into the secondary market. Phase III may not be the final intervention.

To see our other material related to the pandemic, please visit the Coronavirus/COVID-19: Facts, Insights & Resources page of our website by clicking here. 

Under the Coronavirus Aid, Relief and Economic Security Act (CARES Act), all principal and interest payments on federally held student loans are automatically suspended through September 30, 2020. Individuals are not required to contact federal student loan servicers in order to receive the benefit of these changes. Approximately 92 percent of the $1.6 trillion total outstanding student loan debt is owed to federal lenders.

In contrast, privately held loans, including Federal Family Education Loan Program (FFELP) loans held by commercial lenders and Perkins Loans held by academic institutions, receive no relief under the CARES Act. Private loan lenders have taken alternative approaches to addressing strained borrowers in the face of a global pandemic. In contrast to the automatic forbearance of federal student loans offered by the CARES Act, borrowers applying for relief must contact their loan servicer directly in order to apply for relief.

Below is a short summary of the approaches taken by several major lenders in response to the COVID 19 pandemic:

Navient

Navient is offering up to three months of disaster forbearance to qualified FFELP and private loan borrowers who request it. The program will bring eligible loans “current” and postpone payments for up to three months. Interest will continue to accrue during that time but will not be capitalized at the end of the forbearance period.

Discover

Student loan borrowers are advised to reach out directly to discuss options for relief, but no new programs have been introduced that relate directly to the COVID-19 pandemic.

Earnest

Earnest is offering up to three months of postponed payments, through a disaster forbearance, to qualified clients who request it. Interest accrues during forbearance but will not be capitalized (added to the unpaid principal) at the end of the forbearance period. Borrowers are encouraged to use the website to request forbearance and include the following information:

  • Details of how the individual has been financially impacted;
  • The industry the individual works in; and
  • An anticipated date the individual estimates they could resume payments.


Laurel Road

Student loan borrowers are advised to reach out directly to discuss options for relief, but no new programs have been introduced that relate directly to the COVID-19 pandemic.

Citizens Bank

Citizens Bank is offering all borrowers a three-month forbearance if needed, temporarily postponing payments for that period. Interest will continue to accrue on the loan but will not be capitalized at the end of the period. Individuals that still require assistance at the end of the three-month period can request an additional three-month forbearance. At the end of the forbearance period, the loan would re-amortize, and the monthly payment amount would be adjusted.

SoFi

SoFI is allowing borrowers impacted by COVID-19 to apply for a payment deferral. Borrowers experiencing hardship at the end of the deferral period are encouraged to reach out to discuss further options.

Commonbond

As a result of COVID-19’s classification as a natural disaster, Commonbond borrowers can apply to take advantage of “natural disaster forbearance.” This program operates similarly to standard forbearance plans but can be used through the end of the national emergency declaration. During the forbearance period, interest will continue to accrue. Importantly, there are no fees for participating, and any time spent in natural disaster forbearance will not affect an individual’s ability to later use standard forbearance programs.

College Ave

College Ave offers a “Disaster Forbearance program” that temporarily suspends payments on College Ave student loans for three months. The loan will continue to accrue interest during this period, but the interest will not be capitalized once the forbearance period closes. Borrowers are encouraged to contact College Ave directly to discuss the program.

Additionally, New York and New Jersey have announced plans to provide relief for borrowers of student loans funded through state-funded programs:

New York

Prior to the passage of the CARES Act, New York Governor Andrew Cuomo and Attorney General Letitia James announced on March 17, 2020, that the state would temporarily stop collection of all outstanding student loan debt owed to State University of New York schools. This moratorium is scheduled to last until at least April 15, 2020. This directive applies to student loan debt that is past due and owed to a school belonging to the SUNY system.

New Jersey

On March 19, 2020, Governor Murphy announced financial relief options for students and families repaying loans borrowed through the New Jersey College Loans to Assist State Students program. Borrowers of NJCLASS loans must go to the Higher Education Student Assistance Authority (HESAA) website and fill out an application for relief due to financial hardships owing to the COVID-19 pandemic. HESAA has announced greater leniency in its review of these applications to account for the coronavirus.

To see our other material related to the pandemic, please visit the Coronavirus/COVID-19: Facts, Insights & Resources page of our website by clicking here. 


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