On Wednesday, California Governor Gavin Newsom said four banks — Wells Fargo, Citibank, JPMorgan and US Bank — had delayed payments on California loans by 90 days.
Bank of America has pushed back the California loan by a month. But it said it would consider monthly delays, which could be more than 90 days, depending on the duration of the crisis.
When it comes to who qualifies, Newsom says everyone can qualify, no matter how much or how little they earn. Homeowners will only have to submit “some kind of document” but have not provided details.
Until then, Newsom has asked banks to stop foreclosures and evictions until at least May 31 to help homeowners ease the financial burden of the outbreak.
Foreclosure is when a lender forcibly repossessions a home after a borrower is unable to make payments. For example, when the owner of a house loses his job and can’t afford the monthly payment, the lender takes the house back and auctions it off to pay off the rest of the loan.
In addition, the following agencies have also proposed countermeasures:
The Federal Deposit Insurance Corp has asked banks to take steps “reasonably and prudently” to help consumers affected by the outbreak.
The Federal Housing Finance Agency, the Federal Housing Administration and Fannie Mae have given hardship to struggling borrowers Forbearance’s forbearance option, which means it can temporarily defer monthly payments.
Some banks have set up new help websites with advice on how to deal with the crisis. If you are in financial trouble, please contact your lender immediately and never miss the payment deadline!
On March 18, the federal government announced a minimum 60-day foreclosure and eviction moratorium on all single-family home mortgages backed by Fannie Mae, Freddie Mac and the Federal Housing Administration. These include FHA-backed reverse loans, also known as Home Equity Coversion Loans, but they do not apply to private mortgages that are not backed by the government.
As discussed in the previous Flyhomes article, a home equity conversion loan is the conversion of home equity into cash. So this is a loan where if you have $200,000 of equity in your home right now, you can take some of that and take out a second loan.
Just like an ordinary loan, the bank will give you the money in a lump sum after approval, and you pay the principal and interest each month. This interest rate is generally fixed.