Eco­nomic help on the way

Mort­gages: Many banks to ex­tend pay­ment grace pe­riod in Cal­i­for­nia

San Francisco Chronicle - - FRONT PAGE - KATH­LEEN PEN­DER

Gov. Gavin New­som an­nounced Wed­nes­day that four of the na­tion’s five largest banks have agreed to sus­pend mort­gage pay­ments for 90 days for Cal­i­for­nia home­own­ers af­fected by the coro­n­avirus.

Wells Fargo, JPMor­gan Chase, Ci­tibank and U.S.

Bank, along with about 200 state­char­tered banks and credit unions, agreed to the 90­day grace pe­riod, he said.

Congress, mean­while, was strug­gling to pass a stim­u­lus bill that would pro­vide most Amer­i­cans with di­rect pay­ments of $1,200 for each adult and $500 for each child younger than 17. The bill also would pro­vide ex­panded un­em­ploy­ment ben­e­fits, even to those who are not eligible for reg­u­lar state un­em­ploy­ment ben­e­fits be­cause they are self­em­ployed, haven’t worked long enough or ran out of ben­e­fits. Some banks agreed to tem­po­rar­ily sus­pend mort­gage pay­ments for cus­tomers na­tion­wide af­ter fed­eral reg­u­la­tors an­nounced last week they are halt­ing all fore­clo­sures and

evic­tions of home­own­ers for at least 60 days on mort­gages backed by Fan­nie Mae, Fred­die Mac and the Fed­eral Hous­ing Ad­min­is­tra­tion. They also urged all home­own­ers fac­ing fi­nan­cial dif­fi­culty to contact their loan ser­vicer and ask for a for­bear­ance for up to 12 months. Dur­ing this time, they could make no or re­duced pay­ments without in­cur­ring late fees or a hit to their credit rat­ing. That pol­icy ap­plies to govern­ment­backed loans on homes and con­dos with one to four units, in­clud­ing rental prop­er­ties. It did not ap­ply to jumbo or other loans that do not have a govern­ment guar­an­tee.

Chase said it is of­fer­ing a “90­day pay­ment for­bear­ance” for mort­gage cus­tomers na­tion­wide who have been im­pacted by the coro­n­avirus. Wells Fargo said it will grant an “im­me­di­ate 90­day pay­ment sus­pen­sion” for any home lend­ing cus­tomer who asks for as­sis­tance. Although the waiver is avail­able on all loans in­clud­ing jum­bos, at the end of the 90­day pay­ment sus­pen­sion, the bor­rower could be of­fered other options in­clud­ing a con­tin­ued sus­pen­sion or longer­term loan mod­i­fi­ca­tion, “depend­ing on the loan in­vestor and other fac­tors,” Wells Fargo spokesman Ruben Pulido said in an email.

New­som said that Bank of Amer­ica had agreed to only a 30­day pay­ment waiver. How­ever, bank spokesman Wil­liam Halldin said in an email, “Bank of Amer­ica is de­fer­ring mort­gage pay­ments on a monthly ba­sis un­til the cri­sis is over.” At this point, “un­til the cri­sis is over” could be up to 90 days or longer.” On loans owned by the bank, de­ferred pay­ments would be added to the end of the mort­gage.

Con­sis­tent with fed­eral guide­lines, New­som said the banks agree­ing to the 90­day pay­ment grace pe­riod will not charge late fees or re­port late pay­ments to credit re­port­ing agen­cies, nor will they ini­ti­ate fore­clo­sure sales or evic­tions for at least 60 days. Cal­i­for­nia home­own­ers won’t be charged in­ter­est while their loan pay­ments are sus­pended, said Nathan Click, a spokesman for the gov­er­nor.

New­som also praised Congress for work­ing to pro­vide ad­di­tional ben­e­fits to the un­em­ployed.

Un­der the lat­est ver­sion of the bill, nearly all un­em­ployed work­ers would get $600 per week, plus their state ben­e­fit if they get one, for up to four months. In Cal­i­for­nia, where the max­i­mum weekly ben­e­fit is $450 for 26 weeks, some peo­ple could get up to $1,050 for four months. In ad­di­tion, peo­ple who ran out of reg­u­lar state ben­e­fits af­ter 26 weeks could get an ad­di­tional 13 weeks of fed­er­ally funded ben­e­fits.

The stim­u­lus pay­ments provided in the bill would go to “all U.S. res­i­dents with ad­justed gross in­come up to $75,000 ($150,000 mar­ried), who are not a de­pen­dent of an­other tax­payer and have a work eligible so­cial se­cu­rity num­ber,” ac­cord­ing to a Se­nate fi­nance com­mit­tee sum­mary.

They would be eligible for the full $1,200 per adult or $2,400 for a mar­ried cou­ple fil­ing jointly. In ad­di­tion, they would get $500 per child.

Above those in­come lim­its, the pay­ment would be grad­u­ally re­duced and would reach zero at $99,000 in in­come for sin­gles, $146,500 for head of house­hold fil­ers with one child and $198,000 for joint fil­ers with no chil­dren. The top of the phase­out range would be higher the more chil­dren a fam­ily has.

Only chil­dren younger than 17 would qual­ify for the $500 pay­ment, ac­cord­ing to Mark Lus­combe, prin­ci­pal an­a­lyst at Wolters Kluwer Tax I Ac­count­ing.

“For the vast ma­jor­ity of Amer­i­cans, no ac­tion on their part will be re­quired in or­der to re­ceive a re­bate check as IRS will use a tax­payer’s 2019 tax re­turn if filed, or in the al­ter­na­tive their 2018 re­turn,” the sum­mary said. Those who ex­ceeded the limit on their lat­est tax re­turn would not get the pay­ment.

Peo­ple with no in­come, as well as those whose in­come comes en­tirely from meansteste­d ben­e­fit pro­grams, would also be eligible. How­ever, to get the pay­ment, peo­ple would need to file a tax re­turn so the IRS can con­firm their el­i­gi­bil­ity.

Peo­ple will re­ceive a pay­ment via di­rect de­posit, perhaps within a mat­ter of weeks af­ter the bill is ap­proved, if the IRS has their bank in­for­ma­tion. If not, they will have to wait for a check, which could take four or five weeks, ac­cord­ing to the com­mit­tee.

These de­tails could change be­fore a bill is passed.

Rich Pe­dron­celli / As­so­ci­ated Press

ov. avin New­som says banks agree­ing to the 90­day grace pe­riod will not charge late fees.

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