California Gov. Gavin Newsom struck a deal with several major banks in the state to suspend mortgage payments for 90 days for those impacted by the coronavirus crisis.
Four of the five largest banks in the state -- Citigroup (NYSE:C), JPMorgan Chase (NYSE:JPM), U.S. Bancorp (NYSE:USB), and Wells Fargo (NYSE:WFC) -- all agreed to provide a three-month grace period for mortgage payments. Also, nearly 200 state-chartered banks and credit unions have agreed to do the same.
The only large bank that did not commit to the 90 days was Bank of America (NYSE:BAC). Bank of America committed to a 30-day grace period, but Newsom is hoping the bank reconsiders and extends it to 90 days.
"Millions of California families will be able to take a sigh of relief," Newsom said. "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 request a forbearance must be due to COVID-19-related hardships, such as the loss of a job or income or some other reason. Borrowers must also be given the opportunity to request additional relief beyond the 90 days if hardships continue. More than 1 million California residents have filed for unemployment since March 13.
Lenders will be required to waive or refund late fees on mortgages for those who have requested assistance. Further, they will not report the late payments to credit reporting agencies.