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.