With millions of Californians temporarily out of work, Gov. Gavin Newsom Wednesday announced that four of the nation’s five largest financial institutions have agreed to give residents of the state a little extra time to repay missed home mortgage payments.
Newsom said that he had received “personal commitments” from the heads of Wells Fargo, U.S. Bank, JPMorgan Chase, and Citi that the banks would waive payments owed by customers “affected by COVID-19” for at least 90 days.
More than 200 state-chartered banks have agreed to do the same, Newsom said. Bank of America will give customers only 30 days to catch up on payments.
The governor acknowledged that the state lacks oversight over the nation’s largest banks, but said that he had “absolute certainty” they would follow through on their promise.
According to a release from the governor’s office, the guarantee also includes a two-month freeze on foreclosures and three months of late fee waivers. This relief won’t come automatically; homeowners will have to submit documentation proving they’ve been financially impacted by COVID-19.
Last week, President Donald Trump announced a temporary halt to foreclosures on mortgages backed by government-sponsored corporations Freddie Mac and Fannie Mae, or by the Federal Housing Administration.
Meanwhile, the Federal Housing Finance Agency announced Wednesday that both Fannie Mae and Freddie Mac will offer mortgage forbearance to the owners of apartment buildings—as long as they agree not to evict tenants affected by the novel coronavirus outbreak.
Statewide orders in place requiring residents to stay at home unless stocking up on food or medicine, exercising, or traveling to workplaces deemed “essential” have placed many Californians into a state of unexpected financial uncertainty. Newsom said that the state had received more than 1 million unemployment claims since March 13.
A federal aid package moving through congress would provide emergency financial assistance to most Americans, including additional funds for those out of work.
Still, Newsom said, “that doesn’t mean much when it comes to negotiating with, for example, your mortgage [company].”
In Los Angeles, an executive order issued by Mayor Eric Garcetti temporarily bars landlords from evicting tenants impacted by COVID-19 for nonpayment of rent.
Stronger renter protections are now being considered by the Los Angeles City Council, and at least one member of the council urged the governor to issue tenant protections statewide.
“Homeowners aren’t the only ones with bills to pay, and renters need answers before the end of the month,” said Councilmember David Ryu in a statement. “Protecting California’s economy means protecting California’s working families, and we must suspend rent payments and commercial mortgages on residential properties and small businesses.”
Comments
What if your mortgage isn’t with any of these 4 banks? There should be some sort of help from other mortgage lenders.
By Jayp567 on 03.25.20 8:44pm
I agree with David Ryu and have written him on this issue. As he says, "Homeowners aren’t the only ones with bills to pay, and renters need answers before the end of the month," said Councilmember David Ryu in a statement. "Protecting California’s economy means protecting California’s working families, and we must suspend rent payments and commercial mortgages on residential properties and small businesses."
By GJJ3000 on 03.26.20 9:31am
How about just pay your rent on time? Can’t do that? Just move back in with mommy and daddy until you learn to be more financially responsible. Start by learning about "emergency fund." Stop depending on others to pay for your incompetence and irresponsibility.
By Ty1990 on 03.26.20 9:31am
I guess the Cheesecake Factory should move back in with mommy and daddy? I don’t see you complaining about the giant corporations that are suddenly crying that they have no savings and need a bailout.
By saltmine on 03.26.20 9:42am
Comparing personal finance to cash flow of a large business is like saying the Coronavirus is not a danger because people die from the flu and car accidents. The government and businesses have an understanding that if businesses continually reinvest profits in order to grow and hire more employees to grow the taxable base as well as the economy the business itself will have access to capital during a downturn . These businesses are the ones that facilitate the tax revenue from the employees to the government. If every business held 6 months of cash on hand we would have nowhere near the economy and jobs we have now . Personal finance should be looked at differently and one should have a solid back up of funds because you see when shit hits the fan the government is not going to make everything OK. What we need is compassion and money for the working people as well as their bosses so hopefully there will be a job to go back to at some point.
By Mr Balls on 03.26.20 10:11am
Gee, maybe that’s why the economy in this country is such a ponzi scheme… individuals living hand to mouth are supposed to miraculously hold three months of savings at all times, while big business in America — beneficiary of relentless corporate welfare — can’t be bothered to do the same?
By corner soul on 03.26.20 11:28am
Great sum up ! That’s exactly what’s going on. Its not exactly that they can’t be bothered though, these large corporations are just giving every reason in the tax code to spend and distribute all of their profits and cash on hand and rely on super cheap money to borrow. The government benefits from not only interest on the money loaned to banks but the government also benefits from more tax paying employees paying into the system. The individual worker is also given a lot of benefits to put money into a 401K – adding more cash to the system. Ultimately the government needs the companies to drive GDP growth and add tax payers so that’s why they will always bail their ass out.
By Mr Balls on 03.26.20 2:15pm
And now the music has finally stopped… buckle up
By corner soul on 03.26.20 3:55pm
Cheesecake Factory that has 38800 employees? Let me rephrase so you get my point: Cheesecake Factory that has created 38800 jobs?
By Tempo Rary on 03.27.20 2:47pm
How about just pay your mortgage on time? Can’t do that? Just sell your apartment building and move back in with mommy and daddy until you learn to be more financially responsible. Start by learning about "emergency fund." Stop depending on your tenants to pay for your incompetence and irresponsibility.
There, fixed it for you, you gaping fucking asshole.
By Greyvagabond on 03.26.20 10:34am
what if you are the tenant? the reality is 95% of Americans are not sitting on 12 to 18 months of cash reserves just in case something happens. Banks have no interest in repossessing property anyway – it’s better in the long run to work with people who find themselves in trouble until things pick up again.
By LAoneWay on 03.26.20 11:23am
My point exactly; tenants, landlords, and businesses are all in this together. Nobody is to "blame," and everybody should be offered the same type of relief. Yelling at tenants for not anticipating an unprecedented viral outbreak is ghoulish.
By Greyvagabond on 03.26.20 12:23pm
People should have an emergency fund. There are many events besides a virus that require access to emergency funds, including earthquakes, loss of a job, unexpected expenses, etc. No one goes through life unscathed.
Conversely corporations need strong balance sheets in turbulent times, particularly cyclical industries like airlines.
Both groups may need help now and it may make economic sense to do so, but it should be painful. Or else we just have groundhog day.
By Mitche444 on 03.26.20 2:22pm
Keep in mind, this does not mean you get a "free mortgage" for 90 days. You are just kicking the can down the road. The mayor of LA actually made a decent comment when he categorized the "stimulus" package as a "survival" package.
By _Bird_ on 03.26.20 2:25pm
Whoever has entered into a mortgage agreement without precisely that amount (3 months) in reserve, at the minimum, well…
By Tempo Rary on 03.27.20 2:53pm
Welcome to LA and the hysteria bidding wars, which caused people to spend their entire savings on a down payment.
By nated111 on 03.29.20 12:34am
Not surprising that many LA residents cannot afford 3 months mortgage in case if income disruption. The buying hysteria in Los Angeles housing led to fantasy pricing, where panic bidding and buying led people to spend 100% of their savings on a down payment and have no recourse for income losses. We’ll soon see the repercussions of these irresponsible decisions when the short sales come to market.
By nated111 on 03.28.20 8:02pm
Banks will be cooperating with anyone who has a mortgage and can’t pay right now, especially if the number of people needing relief is high. In that case, foreclosing on everyone who can’t pay would make their portfolios virtually worthless and our economic system would collapse. The virus is no one’s fault. That said folks who bought recently will have a very difficult time and many won’t make it.
By calzada on 03.31.20 4:24pm
LA bidding wars probably leaves homeowners in a pickle spending all they got hurt to secure the home in the first place. This is just a delay. We pray the unemployment doesn’t reach 40 million but it’s already at 7 million in counting. Will the jobs he suddenly restored when this current quarantine ends for people to catch up on their mortgages?!
By Drew Simms on 04.02.20 8:41pm