Going Through Changes: Transitioning to a LIBOR-less World for Consumer Loans (Part II)

In our January 27, 2020, Legal Update (“Part I”), we discussed the legal and regulatory issues faced by US consumer lenders and servicers as they prepare for the eventual transition away from LIBOR. In Part I, we noted that the question of how holders and servicers of adjustable-rate loans that use LIBOR as an index should proceed was largely unanswered at the time. Since then, Fannie Mae, Freddie Mac, and the Consumer Financial Protection Bureau have all issued guidance to help ease the transition for originators, holders, and servicers as they navigate the quickly approaching post-LIBOR world. In this Legal Update, we summarize this guidance.