Major Banks Agree To Relief For Vulnerable Homeowners

KCBS Radio Afternoon News
March 25, 2020 - 1:42 pm

Mortgage relief is coming to California homeowners impacted by the coronavirus outbreak.

Gov. Gavin Newsom announced Wednesday afternoon that four of the nation’s five largest banks — Wells Fargo, Citibank, JP Morgan Chase and US Bank — have now agreed to a 90-day grace period on mortgage payments. Additionally, more than 200 state chartered banks and credit unions have also agreed to a 90-day forbearance on foreclosures and mortgage payments.

“It is significant that we have some consistency, that we don’t have a patchwork one bank to another," said Newsom. "So we wanted to engage our nation’s largest banks and see if we could create some continuity, some consistency across their ranks.”

Bank of America has agreed to a shorter 30 day grace period, which Newsom said he hopes will be extended.

“I hope they will reconsider and join those other banks that are willing to do the right thing," he said.

Eligible homeowners can defer payments during the grace period without an impact to their credit score. The Governor said he and his staff continue to work with banks on adjustments to ATM and overdraft fees, which he hopes will be announced in the coming days. 

Newsom says the development is timely as more than 1 million Californians have now filed for unemployment since March 13. The state would have expected to see about 2,500 claims per day or 22,500 for the same period. 

Earlier on Wednesday, the  Senate announced a $2 trillion stimulus package.

“No one is naive about the magnitude of this crisis and I’m not suggesting that the magnitude of this stimulus will even meet the moment, i certainly have strong points of view that there will need to be more in the future," said Newsom. "But let me just acknowledge good work and let me just acknowledge progress.”

At least $10 billion of that will go to California just under the state grants that have been allotted, and likely much more direct support will make its way to the state under this bill. ​