A year after wildfires destroyed thousands of homes and businesses in the Los Angeles area, California Governor Gavin Newsom said on Tuesday that a group of banks agreed to extend mortgage relief beyond the typical year of forbearance.
Bank of America (BAC) is offering qualifying customers up to two additional years of forbearance, beyond the initial 12-month period, for those who plan to rebuild their home, the governor’s office said in a press release.
Wells Fargo (WFC), JPMorgan Chase (JPM), U.S. Bancorp (USB), and Citigroup (C) have agreed to streamline the process for requesting at least one additional forbearance period for up to 90 days for qualified borrowers.
Additional forbearance may require approval from investors such as Freddie Mac (FMCC) and Fannie Mae (FNMA), the statement said.
The agreement for the additional forbearance also includes terms consistent with the governor’s January 2025 agreement with the banks. Under that plan, banks agreed to waive mortgage-related late fees accruing during the forbearance period and to not include lump sum payments under payment options. They also won’t report late payment of forbearance amounts to credit reporting agencies.
California also expanded its eligibility for the CalAssist Mortgage fund that provides mortgage assistance grants to homeowners. The $125M package includes direct assistance and mortgage counseling, with more than $100M available in direct relief.
Governor Newsom also said he’ll explore a new financing program to help survivors bridge the shortfall between insurance payouts and the cost of rebuilding. Lenders and financial institutions, including Bank of America (BAC) and members of the California Mortgage Bankers Association, are launching new lending products to help homeowners finance the reconstruction of homes destroyed in the LA fires.