A Little Relief – From Your Mortgage During the COVID-19 Crisis
MARCH 27, 2020 – Some of you are going to sleep a lot better tonight…
Gov. Gavin Newsom has announced that five major banks and nearly 200 other state-chartered financial institutions agreed to delay mortgage payments and suspend foreclosures for up to 90 days for Californians who lost jobs or are struggling financially because of the COVID-19 pandemic.
And guess what? If you take your bank up on it, your credit score won’t get dinged.
We know everyone is craving good news and relief from compounding stress these days. Heck, it’s hard enough to teach math to your suddenly homeschooled kid when your day job is being an art critic. And worry about mortgage payments, too? Ugh. So, we’re happy to bring you this news and explain what it means.
If you’re thinking, “Geesh! It’s about time!” note that the state has no regulatory authority over the big banks. Newsom probably had to say “pretty please” a lot to get this done.
What you need to know:
- YOU MUST APPLY. The grace period is NOT automatic, and you will have to prove financial hardship caused by COVID-19. Contact your financial institution ASAP. (I hope you love hold music. This might take a while.)
- Who’s in? Citigroup, JPMorgan Chase, U.S. Bank, Wells Fargo, Bank of America, and nearly 200 state-chartered banks and credit unions. Ask your lending institution if it is participating.
- Bank of America committed to a grace period of only 30 days, although we think there’s no harm in asking for more when you call. Newsom said he hopes BofA “will reconsider and join those other banks that are willing to do the right thing.” We do, too.
- You still have to pay. Your debt payment is delayed, not eliminated.
- Fannie/Freddie-backed loans might provide mortgage forbearance for up to 12 months. Learn more here.
- Fees and charges: Generally, some late fees and charges, including early CD withdrawals, could be waived or refunded.
- Foreclosures and evictions: Participating institutions agreed to a 60-day moratorium.
- If your mortgage servicer isn’t communicative or cooperative: File a complaint form with the Department of Business Oversight. Or contact the DBO Consumer Services Office at (866) 275-2677 or (916) 327-7585 or via email at Ask.DBO@dbo.ca.gov.
- What if you need more time? Because no one knows how long the financial impacts of COVID-19 will last, financial institutions and the governor’s office will keep assessing the situation.
- Possible ATM fee and overdraft relief. Newsom also said he’s talking to financial institutions to secure similar relief on ATM fees and overdraft charges. Expect an announcement soon.
- We don’t know yet whether this grace period will affect future refinancing applications. Some banks won’t re-fi if there’s been a recent late payment. So, what exactly will count as a late payment? We’ll find out.
- As soon we know more, we will tell you.
This just in: Eviction ban
- Gov. Newsom issued an executive order today, March 27, banning the enforcement of eviction orders for renters affected by COVID-19 through May 31, 2020.
- Carefully read the order here to understand your rights as a landlord or renter.
- Watch this space for more info about the pandemic’s impact on housing providers.
We are talking to our lending colleagues daily and watching the news closely so we can keep you informed. And, we gotta say, we quite enjoy being the bearer of a little good news.
So, for now, let’s all breathe a sigh of relief.
PS Speaking of relief, do you need a reprieve from shelter-in-place boredom? We got you.
- Play Abio’s SIP B-I-N-G-O game
- Play Abio’s Gratitude Game on Instagram. Anytime you read a post or watch a story about #covid19, write down something you’re grateful for and tag @abioproperties.
- Netflix and chill with “Tiger King.” Escape your current reality and binge-watch this too-crazy-to-be-true-but-it-is documentary series about big cats, cults, mullets, and murder plots. Whoa.
- Call us for a chat about Bay Area real estate: 888-400-ABIO (2246)