Bank of America (NYSE:BAC) is giving a large group of its borrowers a large break. The company is allowing 50,000 of them to defer their mortgage payments, Bloomberg reported Wednesday. Those customers may defer their payments for up to three months due to the financial impact of the SARS-CoV-2 coronavirus outbreak.
In mid-March, the bank announced that mortgage clients facing hardship could request that it grant both deferrals and refunds for late fees on their payments.
According to a spokesman for the bank quoted by Bloomberg, those 50,000 customers have various kinds of mortgages, and many are not backed by federal agencies. Federally backed loans qualify for the forbearance provisions in the federal government's recently passed coronavirus stimulus bill. This permits them to halt mortgage payments for a minimum of six months, with a possible extension of six more.
Below the federal level, some governments have enacted their own mortgage-relief initiatives. A prominent example is California, which recently agreed to a deal with several top banks operating in the state on a 90-day deferral program for borrowers affected by the economic fallout of the coronavirus outbreak. Bank of America is one of those banks, as are California-headquartered Wells Fargo and Citigroup.
Bank of America is one of the top mortgage lenders in the country. In 2019, its residential mortgage loan portfolio reached over $236 billion in size. That represented growth of 13% over the 2018 figure.
On Thursday, Bank of America stock closed the day just over 4% higher, exceeding the gains posted by major stock indexes.