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On June 16, 2020, the U.S. Department of Treasury (Treasury) and U.S. Small Business Administration (SBA) published an updated Loan Forgiveness Application for borrowers to complete in order to apply for loan forgiveness under the Paycheck Protection Program (PPP)[1] to conform with the changes to the PPP pursuant to the Paycheck Protection Program Flexibility Act (PPPFA).  The Loan Forgiveness Application is composed of a loan forgiveness calculation form, a related Schedule A worksheet, a representations and certifications form, and an optional PPP borrower demographic information form.  The application is further supplemented by a Loan Forgiveness Application Instructions for Borrowers sheet
Continue Reading Updates to the PPP Loan Forgiveness Application Form

[Update: This is an updated version of an article published on June 5, 2020]

On June 5, 2020, the U.S. President signed into law the Paycheck Protection Program Flexibility Act (PPP Flexibility Act or Act) to provide businesses with greater flexibility and more time to maximize forgiveness of loans received under the Paycheck Protection Program (PPP), as enacted under the Coronavirus Aid, Relief, and Economic Security Act (as amended, supplemented or otherwise modified from time to time, including, without limitation, by the Paycheck Protection Program and Health Care Enhancement Act, applicable federal regulations and interpretive guidance issued by the SBA and Treasury, the CARES Act).  The PPP Flexibility Act has been further supplemented by the (i) Joint Statement, issued on June 8, 2020 by U.S. Treasury Secretary Steven T. Mnuchin and Small Business Administration (SBA) Administrator Jovita Carranza (the Joint Statement) and (ii) Seventeenth Interim Final Rule[1], issued by the SBA on June 11, 2020.
Continue Reading [UPDATED] Paycheck Protection Program Flexibility Act: Major Changes to the PPP

UPDATE (June 22, 2020): COVID-19 Homeowner, Tenant, and Consumer Relief Law of 2020”, last Thursday the bill failed in Assembly.  Many mortgage loan market participants breathed a sigh of relief as the bill would have enacted sweeping new forbearance standards beyond federal CARES Act mandates for residential and multifamily mortgages.

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A proposed piece of COVID-19 relief legislation could have major implications for California lenders and servicers, particularly in the mortgage lending industry, if passed into law. The assembly bill, entitled “COVID-19 Homeowner, Tenant, and Consumer Relief Law of 2020,” (“AB 2501”) is intended to provide relief to residential and multifamily mortgage borrowers, as well as borrowers under loans secured by a mobile home or motor vehicle, by requiring the loan servicers to provide forbearance to borrowers experiencing a financial hardship during the Covid-19 emergency.   It is also notable that borrowers under certain payday loans, known as deferred deposit transactions, would also benefit from AB 2501 although the specified relief is not forbearance but fee restrictions and a requirement for payment plan options in accordance with specified procedures.
Continue Reading AB 2501 – COVID-19 Homeowner, Tenant, and Consumer Relief Law of 2020

[Update: An updated version of this article was published on June 12, 2020]

On June 5, 2020, the U.S. President signed into law the Paycheck Protection Program Flexibility Act (PPP Flexibility Act or Act) to provide businesses with greater flexibility and more time to maximize forgiveness of loans received under the Paycheck Protection Program (PPP), as enacted under the Coronavirus Aid, Relief, and Economic Security Act (as amended, supplemented or otherwise modified from time to time, including, without limitation, by the Paycheck Protection Program and Health Care Enhancement Act, applicable federal regulations and interpretive guidance issued by the SBA and Treasury, the CARES Act).
Continue Reading Paycheck Protection Program Flexibility Act: Major Changes to the PPP

*This post was updated on July 10, 2020.

Below please find a link to the Sheppard, Mullin, Richter & Hampton LLP (Sheppard Mullin) Paycheck Protection Program (PPP) Loan Forgiveness Estimator Workbook (the Workbook), which was created by and is the property of Sheppard Mullin.
Continue Reading Paycheck Protection Program: Loan Forgiveness Estimator Workbook

On May 15, 2020, the U.S. Department of Treasury (Treasury) and U.S. Small Business Administration (SBA) issued the Loan Forgiveness Application for borrowers to complete in order to apply for loan forgiveness under the Paycheck Protection Program Paycheck Protection Program (PPP), as enacted under the Coronavirus Aid, Relief, and Economic Security Act (as amended, supplemented or otherwise modified from time to time, including, without limitation, by the Paycheck Protection Program and Health Care Enhancement Act, applicable federal regulations and interpretive guidance issued by the SBA and Treasury, the CARES Act).  The Loan Forgiveness Application includes a loan forgiveness calculation form and related Schedule A worksheet as well as an optional PPP borrower demographic information form.

Highlights of what we believe to be material new guidance or clarification of existing guidance regarding PPP loan forgiveness are as follows:
Continue Reading Paycheck Protection Program: Key Features of the Loan Forgiveness Application

In the aftermath of the 9/11 attacks, the Appraisal Institute issued guidance to its MAI appraisers regarding the new challenges and limitations on rendering an opinion of real estate value in the wake of a disaster when markets are unstable or chaotic[1].  The Appraisal Institute identified the specific issues and assumptions that affect the appraiser’s ability to employ accepted standards and practices of valuation, going so far as to advise its MAI members that they should not accept assignments that require “competency beyond that of a real estate appraiser,” id., essentially saying that there can be so much uncertainty that MAI appraisers could not render an opinion compliant with accepted standards.  Given that Bankruptcy Courts require credible and admissible evidence of value at several stages of the Chapter 11 process, the absence of persuasive and credible evidence of value means that the party with the burden of proof on the specific valuation issue will fail to carry its burden and should be denied whatever relief  or outcome that  is being sought, perhaps affecting the outcome of the entire Chapter 11 case.  This article summarizes the challenges faced by bankruptcy judges and practitioners in this post-COVID-19 climate of uncertain real estate values.
Continue Reading Post-COVID-19 Appraisals And The Burden Of Proof In Bankruptcy Cases

On May 13, 2020, the U.S. Department of Treasury (Treasury) and U.S. Small Business Administration (SBA) issued an updated Frequently Asked Questions fact sheet (FAQ)[1], which provides interpretative guidance on the Paycheck Protection Program (PPP), as enacted under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act).[2]
Continue Reading Paycheck Protection Program: SBA Issues Further Guidance on its Review of the Economic Uncertainty Certification made by PPP Borrowers

The U.S. Department of Treasury (Treasury) and U.S. Small Business Administration (SBA) issued further interpretative guidance on the Paycheck Protection Program (PPP), as enacted under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), via (i) an updated Frequently Asked Questions fact sheet (FAQ)[1], which was last published on May 6, 2020 and (ii) the distribution of the Eighth Interim Final Rule[2] on May 5, 2020.[3]
Continue Reading Paycheck Protection Program: SBA Extends Prepayment Safe Harbor To May 14, 2020 and Issues Further Interpretive Guidance on Employee Head Count and Affiliation

On April 30, 2020, the U.S. Small Business Administration (SBA) issued its Seventh Interim Final Rule[1] with respect to the Paycheck Protection Program (PPP), as enacted under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act).[2]
Continue Reading Paycheck Protection Program: SBA Issues an Aggregate $20 Million Limit for Entities within a “Single Corporate Group”