You have to commend the golf industry – all across our sport there has been a collective effort to battle Covid-19, and so far our unified efforts have been successful in promoting our sport, protecting our businesses and employees, keeping up with the fast-changing medical information, and navigating the Byzantine maze of state-to-state and even county-to-county rules and restrictions.
What follows is a brief, but concise guide to basic available resources for yourself, your course, and your employees. It is by no means comprehensive, and the landscape changes from hour to hour, (so consult your resources constantly for the latest updates), but here are the basics:
On March 27, 2020, Congress passed and the President signed the Coronavirus Aid Relief and Economic Security Act (or CARES Act for short). This provides relief to homeowners with federally-backed loans who are in imminent danger of defaulting on their home loan due to a COVID-19-related hardship or who actually have defaulted due to the impact of Covid-19.
Federally backed loans are almost exclusively owned by one of the following federal agencies – FHA, USDA, VA, Fannie Mae and Freddie Mac. You must first determine if your loan is federally-backed before applying for relief under the CARES Act. Remember: just because your loan documents were written on paper that says “FannieMae” or FreddieMac” does not mean your loan is actually owned by those entities. Loans change hands with alarming frequency, and some banks use Fannie or Freddie paper for loans that are not federally-backed. You can simply Google the on-line look-up tool for Fannie or Freddie to determine if your loan is protected by those entities. Alternatively, you can call the HUD National Servicing Center for more information at 877.622.8525.
First and foremost, the CARES Act initiated a foreclosure moratorium; a bank or servicer cannot start a new foreclosure action, (in any state, whether by judicial or extrajudicial means) nor can they move forward with existing foreclosure actions by applying for judgments. They also cannot execute a foreclosure-related eviction.
They are, happily, encouraged to negotiate settlements. The CARES Act moratorium ended last Friday, but this week HUD extended it indefinitely.
Second, yet equally important, the CARES Act provides a temporary forbearance for homeowners of federally-backed loans. Any borrower experiencing financial hardship, directly or indirectly, may request a forbearance regardless of whether they are delinquent or not, and it is mandatory that the bank give it. All a borrower has to do is allege a hardship – orally or in writing – and it must be granted, no questions asked.
What is forbearance? A reduction or suspension of mortgage payments for a set amount of time, These payments are neither forgiven nor waived; they must be paid back. They also do not cover the taxes and insurance on your home – those are still owed separately and apart from the mortgage loan. The forbearance shall be granted for up to 180 days and shall be extended an additional 180 days at the request of the borrower. The borrower can also request any forbearance period be shortened.
Rule Number One in this regard: if you can afford to pay your mortgage, pay it. It’s always more expensive not to. Fees get added, delays happen, and confusion results at best. Banks are so bad at customer service that it’s a good thing for us they’re not doctors. So only apply for a forbearance if you cannot afford your mortgage payment.
What happens when forbearance ends? Again, everything depends on your loan. But with most federal loans, you do not have to pay everything back in a lump sum at the end of the forbearance. You might get put on a repayment plan, you might get a deferral – a non-interest bearing lien for accrued arrears that would be due at the end of your loan – or they could extend the life or “term” of your loan a number of months equal to the forbearance period. (If you have an escrow shortage, you may have to pay that separately.) There are also several types of loan modifications offered, depending on a borrower’s income and loan status.
For more information contact the FHA National Servicing Center or email firstname.lastname@example.org or call 1.877.6228525. (Not to sound like a recorded message, but call volume has been enormous, so you may have a long wait time.)
If your loan is not federally backed, your options depend on the owner or investor in your loan. You should review the website of the loan owner or investor or write to them requesting for information with their loss mitigation procedures and how to apply for relief options.
For those who have lost jobs or been furloughed, there are also several relief programs in addition to normal unemployment benefits, including three pandemic specific options: Pandemic Emergency Unemployment Compensation (PEUC), Pandemic Unemployment Assistance (PUA), and Pandemic Unemployment Compensation, (PUC). Those in need of assistance first should apply for Unemployment Insurance Benefits through their state’s Department of Labor. Note: if you live in one state, but work in another (as many in our industry do) you should apply for benefits in the state where you worked, not the state where you live.
The CARES Act also gives states the option of extending unemployment compensation to independent contractors and other workers who are ordinarily ineligible for unemployment benefits. Contact your state’s unemployment insurance office for more information.
PANDEMIC EMERGENCY UNEMPLOYMENT COMPENSATION (PEUC) is for individuals who were on UIB but exhausted their 26 weeks of benefits. PEUC provides an additional 13 weeks of protection and may be extended in the future.
If you don’t meet your state’s usual requirements for unemployment benefits (typically up to a year of full-time work history), you may still be eligible for benefits under the PANDEMIC UNEMPLOYMENT ASSISTANCE program (PUA). Under this program, for the period from January 27, 2020, to December 30, 2020, states are able to provide benefits to people with shorter work histories and for others who don’t qualify for traditional UIB. You can apply through your state’s Department of Labor website. You’ll need some patience – requests have become overwhelming, so much so that in New York, Your Author’s home state, you can only apply on certain days: Last Name beginning A-F on Monday, G-N on Tuesday, O-Z on Wednesday, and then open enrollment on Thursday through Saturday.
Lastly, PANDEMIC UNEMPLOYMENT COMPENSATION (PUC) is available to recipients of regular UI and PUA and provides an additional $600 per week until July 2020.
SMALL BUSINESS LOANS
The Paycheck Protection Program is a loan designed to provide a direct incentive for small businesses to keep their workers on the payroll. The Small Business Association, (SBA) will forgive loans if all employees are kept on the payroll for eight weeks and the money is used for payroll, rent, mortgage interest, or utilities. (Due to likely high subscription, at least 75% of the forgiven amount must have been used for payroll). You can apply through any existing SBA 7(a) lender or through any federally insured depository institution, federally insured credit union, and Farm Credit System institution that is participating. Other regulated lenders will be available to make these loans once they are approved and enrolled in the program. You should consult with your local lender as to whether it is participating in the program. For affiliation rules applicable to the Paycheck Protection Program.
View a list of lenders participating in the Paycheck Protection Program by state.
The following entities affected by Coronavirus (COVID-19) may be eligible:
- Any small business concern that meets SBA’s size standards (either the industry based sized standard or the alternative size standard)
- Any business, 501(c)(3) non-profit organization, 501(c)(19) veterans organization, or Tribal business concern (sec. 31(b)(2)(C) of the Small Business Act) with the greater of:
- 500 employees, or
- That meets the SBA industry size standard if more than 500
- Any business with a NAICS Code that begins with 72 (Accommodations and Food Services) that has more than one physical location and employs less than 500 per location
Sole proprietors, independent contractors, and self-employed persons
This loan has a maturity of 2 years and an interest rate of 1%. No collateral or personal guarantees are required. Neither the government nor lenders will charge small businesses any fees.
The loan will be fully forgiven if the funds are used for the costs listed above, and loan payments can also be deferred for six months. Forgiveness is based on the employer maintaining or quickly rehiring employees and maintaining salary levels. Forgiveness will be reduced if full-time headcount declines, or if salaries and wages decrease. The loan forgiveness form and instructions include several measures to reduce compliance burdens and simplify the process for borrowers, including:
- Options for borrowers to calculate payroll costs using an “alternative payroll covered period” that aligns with borrowers’ regular payroll cycles
- Flexibility to include eligible payroll and non-payroll expenses paid or incurred during the eight-week period after receiving their PPP loan
- Step-by-step instructions on how to perform the calculations required by the CARES Act to confirm eligibility for loan forgiveness
- Borrower-friendly implementation of statutory exemptions from loan forgiveness reduction based on rehiring by June 30
- Addition of a new exemption from the loan forgiveness reduction for borrowers who have made a good-faith, written offer to rehire workers that was declined
Download Paycheck Protection Forgiveness Loan Forgiveness Instructions and Application here.
GETTING YOUR STIMULUS PAYMENT
If you have not already gotten your $1,200 stimulus check from the IRS, you can simply go here to sign up for direct deposit of your stimulus money and/or check on the status of the processing of your payment. For once, something to do with the IRS is easy: just input information from last year’s tax return and other typical ministerial information, and you’ll get an automatic reply. Your Author signed up on a Thursday and got the money deposited in his account the following Wednesday.
Finally, GCSAA website is a treasure trove of specific and useful information for all members. There are disaster relief fund links, “back to golf” PSA videos, minimum maintenance guidelines, webinars and town hall briefings with other powerful industry players such as the PGA of America’s Seth Waugh, updates on lobbying efforts, and small business guides. Next month: GCT surveys you – America’s superintendents – and gets updates John Fulling Jr., current president of the GCSAA. Would you like your voice heard?
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When not reporting live from major sports championships or researching golf courses for design, value and excitement, multiple award-winning sports writer Jay Flemma is an entertainment, Internet, trademark, and banking lawyer from New York. His clients have been nominated for Grammy and Emmy awards, won a Sundance Film Festival Best Director award, performed on stage and screen, and designed pop art for museums and collectors. Twitter @JayGolfUSA