California has reached a deal with several financial institutions, including four of the country's five largest banks, to provide relief to homeowners affected by the coronavirus by suspending foreclosures and delaying mortgage payments, the governor announced Wednesday.
The news comes as unemployment claims in the state are soaring.
More than one million residents have filed for unemployment insurance since March 13, Gov. Gavin Newsom says, as workers continue to struggle with job losses and reduced hours, as the state looks to slow the spread of the coronavirus.
JP Morgan Chase, Citi, US Bank, Wells Fargo and a number of other credit unions and state banks committed to a 90-day forbearance on mortgage payments for homeowners who can provide evidence that they've been impacted by the COVID-19 pandemic. Late payments would not be reported to credit rating agencies.
The federal government, through mortgage giants Fannie Mae and Freddie Mac, ordered lenders to give struggling homeowners more flexibility last week. That covers about half of all home loans in the country.
Newsom says he hopes lenders will provide business owners with relief in the coming days too. Thousands of small businesses are struggling in the state, as residents continue to stay home.
The state ordered its 40 million residents to limit themselves to only essential travel last week and Newsom says the mandate will stay in effect for the foreseeable future.
"We can defeat this virus," Newsom says. "But we can't defeat it unless we commit to fulfilling our individual obligations and our collective responsibilities to meet this moment."