As the nation’s economy unravels from the effects of Covid-19, here’s some good news: At least one major bank is offering consumer and small business clients mortgage relief and other consumer-friendly breaks.
HousingWire reported late Thursday that Bank of America is offering clients a mortgage deferral program on loans in the bank’s portfolio:
Bank of America announced Thursday afternoon that it is extending “additional support for consumer and small business clients experiencing hardship from the impact of the coronavirus.” Included among those support options is the ability to defer mortgage payments.
According to the bank, Bank of America mortgage and home equity customers can request to defer their payments while the virus crisis rages. The payments would then be added to the end of their loan.
Mortgage relief options are coming daily as the entire country struggles with the financial impact of the coronavirus, which has forced the shuttering of many businesses.
Earlier this week, the Department of Housing and Urban Development, Fannie Mae and Freddie Mac announced the suspending of foreclosures and evictions for at least 60 days. This has not come up in Texas, yet, but the state of New York has already decreed that certain borrowers could forgo their mortgage payments for up to 90 days.
Here’s how Bank of America’s mortgage relief program works: borrowers can get a “break” on their payments now, but will have to make those payments eventually, tacking them onto the end of the loan. So a 30-year mortgage would be 30 years plus three months.
There is no word on the payment of interest during the three-month pause. The bank says the payment deferral program will be made on a case-by-case basis, and can be extended on a month-to-month term.
And this is important: BofA says there will be no negative credit bureau reporting for up-to-date clients, something I have been concerned about.
Bank of America has 66 million consumer and small business clients, and mortgage brokers I spoke to say they expect other banks to follow suit with the mortgage deferral and freeze on negative credit reports.
BofA, along with other banks, is also pausing foreclosure sales, evictions, and repossessions, and offering some consumer-friendly breaks for clients:
Consumer and Small Business deposit accounts
Clients can request refunds including overdraft fees, non-sufficient funds fees, and monthly maintenance fees.
Consumer and Small Business credit cards
Clients can request to defer payments, refunds on late fees.
Small business loans
Clients can request to defer payments, refunds on late fees.
Auto loans
Clients can request to defer payments, with payments added to the end of the loan.
Clients facing financial hardships related to the coronavirus are encouraged to visit the company’s Client Resources website and contact the client services team for assistance, Bank of America said in a release.
