New Jersey Governor Phil Murphy Saturday announced that financial institutions will provide mortgage forbearance and financial protections for New Jerseyans facing economic hardship as a result COVID-19.
“Millions of hardworking New Jerseyans are suffering financial losses through no fault of their own as a result of the economic downturn brought on by COVID-19,” Murphy said. “With this initiative, we can ensure that no one loses their home during this public health crisis. I commend our private sector partners for doing their part to reduce financial uncertainty for New Jersey families.”
Building on a similar initiative in California, Murphy secured support from Citigroup, JPMorgan Chase, U.S. Bank, Wells Fargo, Bank of America, and more than 40 other federal and state-chartered banks, credit unions, and mortgage servicers. More financial institutions are expected to sign on in the coming days, state officials said. The New Jersey Bankers Association, CrossState Credit Union Association and the Mortgage Bankers Association of New Jersey have endorsed the initiative and are encouraging all of their members to adopt the policies.
Under Murphy’s proposal, New Jerseyans who are struggling financially as a result of COVID-19 may be eligible for the following relief upon contacting their financial institutions:
90-Day Grace Period for Mortgage Payments
Financial institutions will offer mortgage payment forbearances of up to 90 days to borrowers economically impacted by COVID-19. The 90 days would be tacked on to the mortgage period, as opposed to requiring one lump sum payment after the grace period. In addition, institutions will:
- Provide borrowers a streamlined process to request a forbearance for COVID-19-related reasons, supported with available documentation;
- Confirm approval of and terms of forbearance program; and
- Provide borrowers the opportunity to request additional relief if hardship due to COVID-19 continues.
No Negative Credit Impacts Resulting from Relief
Financial institutions will not report derogatory tradelines (e.g., late payments) to credit reporting agencies for borrowers taking advantage of COVID-19-related relief.
Moratorium on Initiating Foreclosure Sales or Evictions
For at least 60 days, financial institutions will not initiate foreclosure sales or evictions.
Relief from Fees and Charges
For at least 90 days, financial institutions will waive or refund at least the following for customers who have requested assistance:
- Mortgage-related late fees; and
- Other fees, including early CD withdrawals
Officials said financial institutions and their servicers are experiencing high volumes of inquiries. They recommend that residents use financial institutions’ online portals when available for quicker service. Loans held by a financial institution may be serviced by another company, officials noted.
Last week, Murphy signed Executive Order No. 106, which also imposed a moratorium on removing individuals from their homes pursuant to an eviction or foreclosure proceeding, while the order is in effect. Tenants also cannot be asked to leave their homes for nonpayment of rent during this time.
For more information on COVID-19 related mortgage relief, visit the New Jersey Department of Banking and Insurance website.