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Guest Blog by James Brody, Mortgage Banking Practice Chair, Johnston | Thomas, Attorneys at Law, PC

This topic is especially relevant for Mortgage Bankers, Lenders, and Brokers who utilized a Paycheck Protection Program Loan (“PPP”) during the darkest days of the COVID crisis. The PPP paid out over $800 million in loans that helped countless individuals hold onto their businesses, but now this unexpected debt is holding businesses and the economy back.

At first glance, the forgiveness process appears simple. A PPP borrower must complete an application for forgiveness and submit the application to its lender. The lender is then responsible for approving or denying the borrower’s forgiveness application by verifying certain documentation and calculations and then requesting payment from the SBA, as applicable. While this sounds like it should be straight forward, we have seen numerous PPP Loan Forgiveness Applications be denied and have already been retained to help a number of mortgage bankers with their appeals!

Along those lines, if your request for PPP Loan Forgiveness has been denied, you should first carefully review the Loan Decision letter from SBA, which will typically indicate the reason for denial of forgiveness.

Next, the timing for an appeal petition is vital because your appeal petition must be filed with OHA within thirty (30) calendar days after the appellant’s receipt of the final SBA loan review decision.

Also, it is important to note that an Appellant must provide their lender with a copy of the timely appeal petition upon filing, in order for the lender to extend the deferment period of the PPP loan until a final decision is issued under § 134.1211.

In summary, if your PPP Loan Forgiveness Applications has been denied, the timing of your response and filing a proper appeal is critical. Make sure to consult with your counsel to determine what procedural steps need to be taken and to ensure there will be no delays!

Otherwise, should you have any questions and/or concerns regarding the appeal process, please feel free to contact me at:

James W. Brody, Esq.

Johnston | Thomas, Attorneys at Law, PC

E: [email protected]

T: 415/246-3995

About James Brody

As the Chairman of the Mortgage Banking Practice Group, Mr. Brody actively manages all the complex mortgage banking litigation, mitigation, and compliance matters for Johnston Thomas and its diverse clientele.

Being one of the founding and managing attorneys for his prior mortgage banking firm, as well as having practiced law for close to 20 years, with nearly 15 of those years being spent in the mortgage banking industry, Mr. Brody has been instrumental in the firm’s development and in its continued success.

Mr. Brody has successfully resolved hundreds of mitigation and litigation cases that involve complex mortgage fraud schemes, as well as large-scale repurchase and/or make-whole disputes, in connection with loans that were securitized and/or sold to third parties (e.g., Lehman Bros., Aurora, FNMA, Freddie Mac, ResCap, RMBS Trusts, CitiMortgage, JPMorgan Chase, and more).

Mr. Brody’s experience centers on those legal issues that arise during and through loan originations, loan purchase sales, loan securitizations, foreclosures, bankruptcies, and repurchase and indemnification claims.