Mort­gage re­lief for home­own­ers

The state reaches a deal with ma­jor banks to help those fac­ing fore­clo­sure or strug­gling to make pay­ments.

Los Angeles Times - - FRONT PAGE - By Phil Wil­lon, Liam Dil­lon, Sarah Parvini and James Rainey

SACRA­MENTO — With coro­n­avirus cases con­tin­u­ing to rise across much of Cal­i­for­nia and many work­ers un­em­ployed in­def­i­nitely, sev­eral ma­jor banks and other lenders have agreed to pro­vide mort­gage re­lief to home­own­ers strug­gling to make their monthly pay­ments. The as­sis­tance ar­rives as more than 1 mil­lion Cal­i­for­ni­ans ap­plied for un­em­ploy­ment ben­e­fits over the course of just 12 days through Wed­nes­day be­cause of lay­offs or re­duced hours amid the pan­demic, Gov. Gavin New­som said Wed­nes­day.

Eligible home­own­ers would be able to de­fer mort­gage pay­ments for at least three months and perhaps longer if they suf­fer hard­ship due to the pan­demic. Late pay­ments would not be re­ported to credit agen­cies.

Along with the mort­gage as­sis­tance, New­som is urg­ing the lenders to ex­tend fi­nan­cial re­lief to small busi­nesses and stu­dent loan re­cip­i­ents “in the days and weeks to fol­low,” ac­cord­ing to an email sent re­cently to fi­nan­cial in­sti­tu­tions by state Department of Busi­ness Over­sight Com­mis­sioner Manuel P. Al­varez.

The moves came as pub­lic health of­fi­cials re­ported a con­tin­ued in­crease in COVID-19 cases, in­clud­ing in Los An­ge­les County, where the county health of­fi­cer on Wed­nes­day or­dered that all those who test pos­i­tive for the coro­n­avirus self-iso­late, along with those in close contact with the in­fected.

Of­fi­cials con­firmed 138 new COVID-19 cases Wed­nes­day in the state’s most pop­u­lous county, for a to­tal of more than 800. Three ad­di­tional deaths brought the to­tal in Los An­ge­les County to 13. Statewide, more than 3,100 of those tested have been con­firmed to have in­fec­tions, while 67 have died.

Pub­lic health of­fi­cials em­pha­sized that the ac­tual num­ber of peo­ple in­fected is al­most cer­tainly higher, but an ac­cu­rate count is im­pos­si­ble be­cause so few tests have been given.

The mort­gage re­lief pack­age that New­som de

scribed at an af­ter­noon news con­fer­ence will come from four of the na­tion’s largest banks — Wells Fargo, U.S. Bank, Ci­tibank and JPMor­gan Chase — as well as 200 state-char­tered banks and credit unions.

“We still have peo­ple that are strug­gling to get back to where they were be­fore the Great Re­ces­sion,” New­som said of the fi­nan­cial strug­gles Cal­i­for­ni­ans have ex­pe­ri­enced, now ex­ac­er­bated by the coro­n­avirus out­break.

New­som noted that an­other huge lender, Bank of Amer­ica, agreed to al­low cus­tomers to de­fer mort­gage pay­ments only for one month, but said he is hope­ful the bank “will do the right thing” in the near fu­ture.

Bank of Amer­ica dis­puted New­som’s as­ser­tion that it re­sisted pro­vid­ing more gen­er­ous mort­gage re­lief to home­own­ers. “Bank of Amer­ica is de­fer­ring mort­gage pay­ments on a monthly ba­sis un­til the cri­sis is over,” spokesman Bill Halldin said.

The con­tin­ued spread of the coro­n­avirus and the re­sult­ing wreck­age of the econ­omy sug­gest the need for even greater fi­nan­cial re­lief for con­sumers, Al­varez said in his email.

“As we con­tinue the bat­tle on the pub­lic health front, we must also brace our­selves for a fi­nan­cial cri­sis that is only be­gin­ning,” Al­varez wrote. “Now is the time for all in­sti­tu­tions, pub­lic and pri­vate, to do our part in staving off a tsunami of fi­nan­cial harm bar­rel­ing to­ward Cal­i­for­nia con­sumers.”

The gov­er­nor’s an­nounce­ment came a week af­ter he or­dered all Cal­i­for­nia res­i­dents to stay home to help stem the spread of the virus, with lim­ited ex­cep­tions for es­sen­tial work­ers, in­clud­ing doc­tors, nurses, gro­cery store em­ploy­ees and truck­ers.

Thou­sands of Cal­i­for­ni­ans have lost their jobs or seen their work­ing hours dra­mat­i­cally re­duced, par­tic­u­larly in the hos­pi­tal­ity and service in­dus­tries. And the hard­ships fall on mil­lions in the state who al­ready strug­gle to make mort­gage and rent pay­ments, given sky­rock­et­ing hous­ing costs.

The fed­eral govern­ment this month an­nounced that Amer­i­cans with loans backed by the gov­ern­mentspon­sored agen­cies Fan­nie Mae or Fred­die Mac would be eligible to de­fer mort­gage pay­ments and be shielded from fore­clo­sure if they could not af­ford to make pay­ments be­cause of the out­break.

More than 30 state law­mak­ers on Wed­nes­day sent a let­ter to New­som ask­ing for a statewide evic­tion mora­to­rium. They say fewer than 50 lo­cal gov­ern­ments — out of the 539 cities and coun­ties statewide — have passed mora­to­ri­ums as the gov­er­nor urged last week.

Hous­ing ad­vo­cates also called for an evic­tion ban statewide, par­tic­u­larly for those who aren’t work­ing as a re­sult of the coro­n­avirus. New­som has said he will take ad­di­tional steps if he be­lieves lo­cal ju­ris­dic­tions are failing to pro­tect their res­i­dents.

Of­fi­cials warned that the worst days of the pan­demic in Cal­i­for­nia are yet to come.

Los An­ge­les Mayor Eric Garcetti said the city could be six to 12 days from see­ing a surge in in­fec­tions and hos­pi­tal­iza­tions like the one now aff lict­ing New York City, where the death toll has dra­mat­i­cally in­creased in re­cent days.

“It’s com­ing,” Garcetti said. “The peak is not here yet. The peak will be bad. Peo­ple will lose their lives.”

San Fran­cisco lead­ers is­sued a sim­i­lar warn­ing, say­ing it was “plau­si­ble” the city could face a cri­sis sim­i­lar to the one in New York and fall 1,500 ven­ti­la­tors and 5,000 hospi­tal beds short of the num­bers needed.

“It is not even a ques­tion as to whether we will need more,” Mayor Lon­don Breed said dur­ing an hour­long news con­fer­ence. “Sadly, things are go­ing to get worse.”

In light of the ex­pected surge, govern­ment of­fi­cials were work­ing to find ad­di­tional hospi­tal beds. More than 1,000 beds will be provided by the Navy ship Mercy, which will ar­rive in Los An­ge­les on Fri­day, ear­lier than ex­pected, ac­cord­ing to Pen­tagon Press Secretary Alyssa Farah.

Of­fi­cials in Los An­ge­les and San Fran­cisco re­jected sug­ges­tions from Pres­i­dent Trump that there could be a quick eas­ing of re­stric­tions.

Garcetti said An­ge­lenos should be “pre­pared for a cou­ple months like this.”

“I know that ev­ery­body is hope­ful, and some are putting out that hope of us be­ing back in churches by Easter or syn­a­gogues by Passover or restart­ing the econ­omy in a cou­ple weeks,” Garcetti said. “I think we owe it to ev­ery­body to be straight­for­ward and hon­est. We will not be back to … that level of nor­mal in that short pe­riod of time.”

Dr. Grant Col­fax, San Fran­cisco’s pub­lic health direc­tor, con­curred.

“I know there are peo­ple out there who will lead you to be­lieve our ef­forts are too ag­gres­sive,” Col­fax said, “but I can­not stress enough just how vi­tal they are.”

Los An­ge­les County Pub­lic Health Department Direc­tor Bar­bara Fer­rer also said res­i­dents should not ex­pect an im­me­di­ate re­turn to nor­mal­ity.

“We would be fool­ish to not pre­pare for a sim­i­lar sce­nario in L.A. County,” she said. “We talk about num­bers, but these aren’t num­bers — these are peo­ple’s lives.”

Marcio Jose Sanchez As­so­ci­ated Press

LUIS ESTRADA and other hos­pi­tal­ity work­ers wait to ap­ply for un­em­ploy­ment ben­e­fits at the Hos­pi­tal­ity Train­ing Academy in Los An­ge­les this month. Gov. Gavin New­som said more than 1 mil­lion Cal­i­for­ni­ans ap­plied for un­em­ploy­ment ben­e­fits in less than two weeks.

Mel Mel­con Los An­ge­les Times

A FIFTH-GRADER re­ceives a lap­top from prin­ci­pal Jeff Rick­ert of EARTHS Mag­net School in New­bury Park for online learn­ing. State of­fi­cials have warned that the worst days of the pan­demic are yet to come.

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