California Governor Gavin Newsom on Thursday, March 26 announced that financial institutions will provide major financial relief for millions of Californians suffering financially as a result of the COVID-19 outbreak.
“Millions of California families will be able to take a sigh of relief,” said Newsom. “These new financial protections will provide relief to California families and serve as a model for the rest of the nation. I thank each of the financial institutions that will provide this relief to millions of Californians who have been hurt financially from COVID-19.”
The governor secured support from Citigroup, JPMorgan Chase, U.S. Bank, and Wells Fargo and nearly 200 state-chartered banks, credit unions, and servicers to protect homeowners and consumers, his office said.
Under the governor’s proposal, Californians who are struggling with the COVID-19 crisis may be eligible for the following relief upon contacting their financial institution:
90-Day grace period for mortgage payments
Financial institutions will offer, consistent with applicable guidelines, mortgage payment forbearances of up to 90 days to borrowers economically impacted by COVID-19. In addition, those institutions will:
• Provide borrowers a streamlined process to request a forbearance for COVID-19-related reasons, supported with available documentation;
• Confirm approval of and terms of forbearance program; and
• Provide borrowers the opportunity to request additional relief, as practicable, upon continued showing of hardship due to COVID-19.
No negative credit impacts resulting from relief
Financial institutions will not report derogatory tradelines (e.g., late payments) to credit reporting agencies, consistent with applicable guidelines, for borrowers taking advantage of COVID-19-related relief.
Moratorium on initiating foreclosure sales or evictions
For at least 60 days, financial institutions will not initiate foreclosure sales or evictions, consistent with applicable guidelines.
Relief from fees and charges
For at least 90 days, financial institutions will waive or refund at least the following for customers who have requested assistance:
• Mortgage-related late fees; and
• Other fees, including early CD withdrawals (subject to applicable federal regulations).
Loans held by a financial institution may be serviced by another company.