America’s five largest banks have agreed to defer mortgage payments for homeowners impacted by the coronavirus outbreak.
JP Morgan Chase, US Bank, Wells Fargo and Citibank will postpone foreclosures and offer forbearance on mortgage payments for 90 days, California Governor Gavin Newsome announced Wednesday.
He stated that Bank of America had ‘unfortunately’ only committed to 30 days of protections, before a spokesperson later clarified that that the bank ‘will work with customers on a monthly basis until the end of the crisis’ which ‘could end up being longer than 90 days.’
Two hundred state-chartered banks and credit unions in California have also agreed to the mortgage relief, at the behest of Newsom and other officials.
The announcement comes as shocking new figures from the Department of Labor reveal that 3 million new unemployment claims were filed in the week of March 14 – 21. Authorities in at least 20 states have ordered residents to stay home to stop the spread of COVID-19, causing much of the country to effectively shut down.
The previous record for new unemployment claims in a single week was in 1982 – when there were 695,000 applications filed.
According to The Washington Times, Newsom claimed that all Americans will be eligible for the big banks’ mortgage deferments, regardless of income.
However, homeowners must provide ‘some form of documentation’ to prove that they have been impacted by COVID-10.
DailyMail.com has contacted JP Morgan Chase, US Bank, Wells Fargo, Citibank and Bank of America for specific details on documentation that will be needed.
DailyMail.com has also asked JP Morgan Chase, US Bank, Wells Fargo and Citibank whether they will follow BOA’s pledge to postpone foreclosures and offer forbearance on mortgage payments should the coronavirus crisis stretch beyond 90 days.
The promise from the big banks follows an earlier announcement from the federal government, which declared that people with loans from government sponsored agencies Fannie Mae or Freddie Mac would be eligible to defer their mortgage payments.
The government has also been attempting to implement other measures in a bid to blunt the economic fallout from the coronavirus crisis.
On Wednesday, the Senate unanimously passed a $2trillion economic relief bill, which will see checks sent to more than 150 American households.
The bill will expand unemployment benefits and provide a $367 billion program for small businesses to keep making payroll while workers are forced to stay home.
Most Americans making less than $75,000 as a single tax filer would receive a $1,200 direct payment under the bill. The payments would go out by direct deposit for those who have recently paid taxes or received tax refunds that way, but for others physical checks will be sent.
Last week, President Trump signed a separate relief bill into law, in a bid to stave off the country being crippled by coronavirus.
That $105 billion bill provides safety net programs for Americans affected by COVID-19, including paid sick and family leave.
The legislation also provides free testing for the highly contagious virus, which has infected more than 9,000 Americans.
However, thus far, economic rescue efforts have failed to mitigate the fallout from COVID-19.
Three million people filed claims between March 14 and March 21, according to the Department of Labor on Thursday morning.
In the week ending March 14, the number of initial claims was 282,000 – meaning 3,001,000 new ones have been filed since then.
The report says service industries – specifically food and accommodation – are the hardest hit but that claims are also coming from the healthcare industry and from people who work in manufacturing, entertainment and arts.
Before the virus hit, unemployment in the US was at its lowest in 60 years and the economy was stronger than it had ever been.
The highest number of new unemployment claims was in Pennsylvania, where there were more than 360,000. California saw an increase of 130,000 and there was an increase of 180,000 in Ohio.
But the data does not reflect the fact that since March 21 – when the data was compiled was – states like New York have closed all non-essential businesses, sending millions of people home from work.
There is also anecdotal evidence that people who have tried to file claims online have not been able to, and there are millions of people in the country who despite being put out of work by the virus, are not eligible to file because of their immigration status or visa requirements.