SACRAMENTO, Calif. – Five of the nation's largest banks have agreed to temporarily suspend residential mortgage payments for people affected by the coronavirus, California Gov. Gavin Newsom said Wednesday.
The announcement came as Newsom provided yet another grim statistic about the economic devastation from the virus: 1 million Californians have filed for unemployment benefits since March 13 as businesses shut down or dramatically scaled back because of a statewide “stay-at-home” order to prevent the spread of the virus.
Meanwhile, Newsom said California is rapidly expanding its supply of equipment for health care workers and hospital beds in anticipation of the expected surge in patients that will come as more people are infected. Testing for the virus is accelerating quickly as the state adds locations for the public to get checked.
“We are leaning in to meet this moment," Newsom said.
Wells Fargo, US Bank, Citi and JP Morgan Chase will defer mortgage payments for three months. State chartered banks and credit unions will offer similar deferrals. The banks also pledged not to initiate foreclosure sales or evictions for the next 60 days. And they promised not to report late payments to credit reporting agencies.
Newsom said everyone is eligible, regardless of how much money they make. He said homeowners must submit “some form of documentation,” but did not give details.
“I thought the Great Recession was overwhelming, and we really had to react. This one is much bigger,” said Diana Dykstra, CEO of the California-Nevada Credit Union League. “People’s health is on the line, it’s deeper and broader than that crisis was. It was a housing crisis. This is a crisis for everyone."
Newsom criticized Bank of America for only agreeing to waive mortgage payments for one month. But Bank of American spokesman Bill Halldin said the company isn't capping its offer at 30 days. It will consider delaying payments on a monthly basis that could extend beyond 90 days depending on the length of the crisis.