Newsom and the banks strike residential mortgage relief deal

Wells Fargo, U.S. Bank, Citi, and JP Morgan Chase will defer payments

Los Angeles /
Mar.March 26, 2020 11:10 AM
California Gov. Gavin Newsom (Credit: Justin Sullivan/Getty Images)
California Gov. Gavin Newsom (Credit: Justin Sullivan/Getty Images)

California Gov. Gavin Newsom announced Wednesday that five of the country’s largest banks agreed to ease pressure on residential mortgage holders affected by the coronavirus pandemic.

Wells Fargo, U.S. Bank, Citi, and JPMorgan Chase will allow borrowers to defer mortgage payments for three months, according to ABC News. They each pledged they would not foreclose or evict borrowers for 60 days and would not report late payments to credit agencies. Around 200 state-chartered banks and credit unions will do the same.

Bank of America, meanwhile, committed to a 30-day grace period, but a spokesperson said the bank could extend that period and had no hard cap.

Newsom didn’t get into specifics of the arrangement, but said anyone who took out a residential mortgage with those banks would be eligible and would have to submit “some form of documentation” to qualify for relief.

Around 1 million Californians have filed for unemployment benefits since March 13, less than two weeks ago. Lenders — including nonbank lenders — could be facing a wave of missed payments and forbearance requests.

Both Newsom and New York Gov. Andrew Cuomo, whose state has been at the epicenter of the outbreak, have been pushing mortgage lenders to ease off borrowers.

New York State this week ordered banks to quickly broadcast to single-family borrowers how they can receive 90-day forbearances on their mortgage payments and to process applications within 10 days of receiving them. That order does not apply to multifamily landlords.

Multifamily landlords holding mortgages with Fannie Mae or Freddie Mac will receive some sort of relief as well, the Federal Housing Finance Agency announced this week. [ABC News]Dennis Lynch


Related Articles

arrow_forward_ios
California Governor Gavin Newsom
Newsom signs flurry of housing bills
Newsom signs flurry of housing bills
Miller Samuel's Jonathan Miller (Getty, Miller Samuel Inc.)
August signed contracts drop 25% in LA, report says
August signed contracts drop 25% in LA, report says
Steve Clark, Derek Reilly, Eric Finnigan, and Jordan Levine ( Steve Clark, Derek Reilly, Jordan Levine, John Burns, Getty)
Fed interest rate hike will continue “softening” of market
Fed interest rate hike will continue “softening” of market
Eric Sussman, Kerry Ann Sullivan, Dana Potter and Eric Finnigan (Eric Sussman, Kerry Ann Sullivan, Dana Potter, John Burns Real Estate)
‘Yawn’ or ‘cold water’ on this week’s rate hike?
‘Yawn’ or ‘cold water’ on this week’s rate hike?
Alhambra takes shot at SB9 with emergency ordinance
Alhambra takes shot at SB9 with emergency ordinance
Alhambra takes shot at SB9 with emergency ordinance
State of California to hand out pandemic-related mortgage relief
State of California to hand out pandemic-related mortgage relief
State of California to hand out pandemic-related mortgage relief
Dip in signed contracts reflects LA’s ongoing inventory squeeze
Dip in signed contracts reflects LA’s inventory squeeze
Dip in signed contracts reflects LA’s inventory squeeze
Downtown LA’s Standard Hotel to shutter permanently
Downtown LA’s Standard Hotel to shutter permanently
Downtown LA’s Standard Hotel to shutter permanently
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...