Numerous financial institutions have committed to a temporary grace period period for mortgage payments of California families impacted by the novel coronavirus outbreak, Gov. Gavin Newsom announced Wednesday.
Four of the nation’s five largest banks — Wells Fargo, Citi, JPMorgan and US Bank — have agreed to defer the payments for 90 days, according to Newsom.
Bank of America will waive them for 30 days, he said.
A spokesman for the BofA told KTLA in an emailed statement that the financial institution is deferring mortgage payments
The bank will be deferring mortgage payments on a monthly basis nationally — not just in California — “until the crisis is over,” the statement read. “At this point, ‘until the crisis is over’ could be up to 90 days or longer.”
Nearly 200 state-chartered banks and credit unions have also committed to a 90-day grace period on mortgage payments.
The delayed payments will not affect credit ratings.
“Families should not lose their homes because of COVID-19,” Newsom tweeted after the announcement. “A big sigh of relief for millions of CA families.”
The governor noted that the stimulus package passed by Congress will increase unemployment payments by $600 per week — that’s on top of the up to $450 California provides weekly — but even that extra cash may not be able to help families struggling financially because of the pandemic.
“When we talk about unemployment insurance, we talk about a $600 increase beyond what states are already providing on a weekly basis for the next four months, that doesn’t mean much when you’re facing the burden and the cost associated with, for example, your mortgage,” he said.
Since March 13, more than 1 million residents have filed for unemployment benefits, according to Newsom.
All “nonessential” businesses in California have been forced to close temporarily because of a statewide “stay-at-home” order the governor issued late last week to help mitigate the virus’ spread.
All homeowners with mortgages are eligible to have their payments deferred, regardless of their income, according to Newsom. However, they must submit some type of documentation to lenders that demonstrate how they’ve been negatively impacted financially due to the outbreak.
He did not provide further information about the process.
Newsom is urging people to “pause” and get their mortgage documents in order before calling, noting that banks will be overwhelmed if everyone contacts their lender right away.
“If every single person with a residential mortgage makes a phone call at the same time to their bank, those call centers will collapse,” Newsom said. “So I hope folks take a little bit of time.”
The state is working with banks on other issues like overdraft charges and ATM fees. More details will be announced on those in the coming days, according to Newsom.
“The job is not done,” he said. “But we think it’s a significant announcement.”
It’s unclear if any help will be provided to renters, though the governor has signed a sweeping executive order that would offer them some protection by allowing local governments to temporarily halt foreclosures and evictions.
Those protections will be in effect through at least May 31.
As of Tuesday afternoon, California has seen more than 2,500 confirmed cases of COVID-19, resulting in 53 deaths, according to the state’s Department of Public Health.
Those numbers are expected to increase dramatically, with Newsom saying last week that more than half of the state’s population of about 40 million could become infected within the next eight weeks without drastic action.