Gov. Newsom Reaches Deal With Major Banks to Suspend Mortgage Payments, Foreclosures for 90 Days

Four of the nation’s five largest banks have agreed to delay mortgage payments and suspend foreclosures for California homeowners for up to 90 days, as the state continues to respond to the coronavirus outbreak.

On Wednesday, Gov. Gavin Newsom said he had reached agreements with Wells Fargo, JPMorgan Chase, Citibank and US Bank — along with 200 state chartered banks and credit unions. The deal, he said, only applies to California customers who have been directly impacted by the pandemic and its economic fallout.

Bank of America agreed to only a 30-day suspension of mortgages and foreclosures, he added.

“It is significant we have some consistency and we don’t have a patchwork — one bank to another,” Newsom said.

More than 1 million Californians have filed unemployment claims since March 13, Newsom said Wednesday. A week ago, he issued a statewide stay-at-home order, shuttering all but essential businesses.

Tom Bannon, CEO of the California Apartment Association, said the measure will provide welcome relief to millions of mortgage holders across the state.

“People will sleep better tonight than they did last night,” Bannon said.

But the relief isn’t coming soon enough for renters, who still have looming April 1 rent payments. The association has urged its members to act with compassion to freeze rent hikes and halt evictions through the duration of the pandemic.

Newsom has fallen short of imposing a statewide moratorium on evictions that many lawmakers and advocacy groups have said is necessary to provide relief to the millions of California renters who have been furloughed, laid off or seen their hours slashed.

“It’s just irresponsible,” said Leah Simon-Weisberg, legal director with the tenant-rights group Alliance of Californians for Community Empowerment. She noted that the absence of a statewide moratorium has created a confusing patchwork system. “The amount of work he’s creating is completely unnecessary. He should be doing everything he can to take care of this.”

Earlier this month, Newsom issued an executive order clarifying the legal authority cities and counties have to enact their own eviction moratoriums. And on Wednesday, he said he had a team of people working out the legal details to enact a statewide moratorium.

“For me it’s practice, not promise,” he said. “[The] issues are much more complicated than they may appear.”

Governors in Oregon, Washington, New York, Indiana and Maryland have already enacted moratoriums on evictions in their states. And last week, the Federal Housing Finance Agency directed Fannie Mae and Freddie Mac to suspend foreclosures and evictions for at least 60 days for single-family mortgage holders.

Assemblyman Phil Ting, D-San Francisco, introduced legislation last week to enact a moratorium on evictions for renters across the state, but the bill can’t proceed until the Legislature reconvenes next month. On Wednesday, a coalition of 38 lawmakers sent a letter to Newsom urging him to issue a prohibition on all evictions, for whatever cause, unless the tenant poses a serious health or safety threat.

“During this emergency, our state needs one clear order that covers all tenants and does not require proof of a COVID-related loss of income that may be difficult to document,” the letter reads, noting rent for many tenants will be due April 1. “We need to keep everyone who is currently housed where they are so they can shelter in place, follow recommended guidelines and help California flatten the curve.”

Laura Yopihua, 33, runs a house-cleaning business and said all of her scheduled jobs have been canceled. Her husband, who works in construction, has been told to stay home and isn’t working either.

They pay $1,900 to rent their 3-bedroom apartment in Concord, she said. That along with insurance and other bills, plus the cost of food for their family of four, has made them extremely worried about how long they’ll be able to survive without working.

“We’re scared because at the end of the month, we don’t know what to do,” she said. “We’d prefer to buy food than [pay for] rent right now.”

Francisco Dueñas, executive director of Housing Now, a statewide housing advocacy group, said the cost of housing in the Bay Area, which was already unaffordable before the coronavirus struck, will now be all that much harder to pay with millions of residents out of work.

Housing Now recently sent a letter signed by 149 other organizations urging Newsom to enact an eviction moratorium.

“Living in California with our housing being so expensive, there’s already a lot of anxiety around staying in your home,” Dueñas said. “With people losing their jobs, that has only grown.”

On Wednesday, the U.S. Senate was moving toward a vote on a $2 trillion relief package for individuals, states and businesses impacted by the pandemic. The measure includes an additional $600 per week for people who’ve filed unemployment insurance claims in their states — on top of whatever amount the state is paying.

But Newsom on Wednesday acknowledged that may not be enough for people who are still “struggling day in and day out to make ends meet, struggling to feed their families, to feed themselves.”

“We still need to do more,” he added.