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/
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California has required employers to “indemnify” employees for “necessary expenditures or losses incurred by the employee in direct consequence of the discharge of his or her duties, or of his or her obedience to the directions of the employer” in substantially the same terms since 1937 under Labor Code § 2802.
