Proving once again that California is a leader in COVID-19 proactivity, the state secured support from major lenders such as Citigroup, JPMorgan Chase, U.S. Bank, Wells Fargo and nearly 200 state-chartered banks and credit unions to potentially allow individuals economically impacted by COVID-19 to receive a 90-day grace period to make mortgage payments. Details vary, but some institutions may allow a reimbursement for payments made. Moreover, the lenders have agreed that this three-month deferral on paying one’s mortgage will not be allowed to negatively impact the borrower’s credit. Of note is that Bank of America has not agreed to the 90-day pledge; however, it has agreed to a 30-day grace period, and is prepared to extend its pause beyond 30 days if necessary.
This should be of great help to those struggling to pay their mortgages; however, careful optimism demands that individuals be wary of this good news. Individuals who apply will have to adequately prove and document their inability to pay because of COVID-19. Moreover, this appears to be a self-regulated effort, and it is yet to be determined what level of oversight will be available to assure that the forbearance is properly provided.
Full details can be seen at: https://www.gov.ca.gov/2020/03/25/governor-gavin-newsom-announces-major-financial-relief-package-90-day-mortgage-payment-relief-during-covid-19-crisis/