As a result of the coronavirus pandemic, Arizona banks and their borrowers are facing economic uncertainty. Bankruptcy filings are on the rise, and many eligible borrowers are opting to file under the Small Business Reorganization Act of 2019 (SBRA), a new fast-track bankruptcy option that alters lenders’ and other creditors’ rights in certain Chapter 11 bankruptcy cases.
This memorandum is in regard to some of the changes we are seeing in the title insurance industry due to COVID-19. While the issues and impact may vary slightly by county and by title company, this memorandum addresses the following three (3) recurring concerns:
The Coronavirus Aid, Relief, and Economic Security Act (the CARES Act) is the largest financial assistance legislation ever enacted, and was signed into law on March 27, 2020. It allocates $2 trillion for businesses, individuals, federal agencies, and state and local governments, and was designed to distribute capital quickly and broadly.
Banks must be proactive and prepared to assist their borrowers in the uncertain times ahead. Here are several recommendations as to the things your bank can be doing to be proactive and prepared with respect to your loan portfolio.