California Governor and Financial Services Agree to COVID-19 Consumer Relief
On Wednesday, March 25, 2020, California Governor Gavin Newsom and a long list of mortgage lenders and servicers—including major banks and nearly 200 state-chartered banks, credit unions, and servicers—reached an agreement to provide much needed relief to homeowners and consumers. This agreement is similar to provisions for federally backed mortgage loans in the stimulus legislation, summarized here, that passed the U.S. Senate on the same day.
The group has agreed to various relief provisions for COVID-19-related hardship in areas, including mortgage forbearance, credit reporting, foreclosure and eviction, and fees and charges. The Governor’s website has published the announcement, and a consumer information page for obtaining financial relief has been added to the state’s COVID-19 response web site.
Forbearances of up to 90 days will be offered to borrowers, consistent with applicable guidelines, to borrowers economically impacted by COVID-19. In addition, borrowers will be provided with a streamlined process to request forbearance, confirm approval and terms of the forbearance, and be provided the opportunity to request additional relief for continuing hardship. Some supporting documentation may be required.
Financial institutions have agreed, consistent with guidelines, to not report negative credit to consumer reporting agencies for borrowers experiencing hardship and utilizing COVID-19 related relief.
Foreclosure and Eviction
Foreclosure sales and evictions will not be initiated by financial institutions for at least 60 days, consistent with applicable guidelines.
Fees and Charges
For a minimum of 90 days, financial institutions have agreed to waive or refund mortgage-related late fees and other fees, including early CD withdrawals (subject to applicable federal regulations) for consumers who have requested COVID-19 assistance.
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