It was not immediately clear what it would take to qualify for the payment freeze; Newsom urged consumers not to immediately flood bank call centers with questions.
California Gov. Gavin Newsom said Wednesday that four of the nation’s five biggest banks and more than 200 state-chartered banks and credit unions have committed to 90-day mortgage waivers “for those that have been impacted by COVID-19.”
At the midday press briefing, the governor also said that state unemployment claims have skyrocketed during the outbreak, reaching some 1 million new claims since March 13.
Newsom said in a press briefing he has spent time over the last several weeks working to create consistency among the nation’s largest banks as well as banks around the state of California to provide financial relief for homeowners who have been directly affected by the coronavirus pandemic.
Newsom said Wells Fargo, U.S. Bank, Citibank and J.P. Morgan Chase have joined with banks in California to provide “forbearance on foreclosures and on mortgage payments.” The governor said Bank of America did not agree to the same pledge.
“Unfortunately, Bank of America did not publicly commit to that,” Newsom said. “They just committed to 30 days. I hope they will reconsider and join those other banks that are willing to do the right thing by at least extending that commitment to their customers for 90 days.”
Shortly after Newsom’s briefing, Bank of America tweeted that mortgage customers can “request to defer your payments on a monthly basis until this crisis is over,” if they are impacted by COVID-19.
To our mortgage customers – if you are impacted by Coronavirus you can request to defer your payments on a monthly basis until this crisis is over. https://t.co/OtvewifQPt
— Bank of America News (@BofA_News) March 25, 2020
It was not immediately clear what the requirements would be for homeowners to qualify for a waiver, but Newsom said the state will look to create an easy-to-navigate process and indicated more details will become available in the coming days.
“There’s no income provisions that are part of the announcement we have made today,” Newsom said. “It is COVID-related. Some form of documentation (will be required, but) we want to ease the document side of this.”
The governor said bank CEOs urged him to caution homeowners against flooding phone banks with calls following his announcement so as not to overwhelm the system.
“If every single person with a residential mortgage makes a phone call to their bank at the same time, those call centers will collapse,” Newsom said. “The bank CEOs were quite candid with me about the concern around surge.”
Newsom also said he has a team in place looking at the legal parameters of creating a statewide moratorium on evictions for renters, but said “issues are more complicated than they appear.” On March 17, Newsom issued an executive order that allows cities and counties to adopt legislation that would stop landlords from evicting tenants who miss their next rent payments. Union City and Palo Alto are among the Bay Area communities that have already moved to being eviction moratoriums.
“If we don’t see things materialize and manifest in very short order, we reserve the right to look at a state overlay,” Newsom said Wednesday.
