Gov. Murphy signed an executive order announcing a 90-day grace period on mortgage payments for borrows in economic hardships because of the pandemic. He is also calling on banks to waive late fees and asks credit card companies to lower interest rates. Gov. Murphy expects landlords getting mortgage relief to pass that to tenants as rent relief.
Homeowners statewide affected by the virus will have a 90-day grace period from mortgage payments, from which there can be no late fees and no credit downgrades, Murphy says.
Acting on a commitment to provide financial relief to New Jersey homeowners, Governor Phil Murphy today announced that financial institutions will provide mortgage forbearance and financial protections for New Jerseyans facing economic hardship as a result of 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,” said Governor Murphy. “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, Governor Murphy secured support from Citigroup, JPMorgan Chase, U.S. Bank, Wells Fargo, and Bank of America, in addition to over 40 other federal and state-chartered banks, credit unions, and services to protect New Jersey homeowners. More financial institutions are expected to sign on in the coming days. The New Jersey Bankers Association, CrossState Credit Union Association and the Mortgage Bankers Association of New Jersey have endorsed this initiative and are encouraging all their members to adopt these policies.
Under Governor 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 institution:
90-Day Grace Period for Mortgage Payments
Financial institutions will offer, consistent with applicable guidelines, mortgage payment forbearances of up to 90 days to borrowers economically impacted by COVID-19. In addition, those 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, as practicable, upon continued showing of hardship due to COVID-19.
No Negative Credit Impacts Resulting from Relief
Financial institutions will not report derogatory tradelines (e.g., late payments) to credit reporting agencies, consistent with applicable guidelines, 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, consistent with applicable guidelines.
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 (subject to applicable federal regulations).
Last week, Governor Murphy signed Executive Order No. 106, which imposed a moratorium on removing individuals from their homes pursuant to an eviction or foreclosure proceeding while the Order is in effect. Tenants cannot be asked to leave their homes for nonpayment of rent during this time.
Governor Murphy also announced that the Department of Community Affairs received an additional $13 million in federal funds as part of its annual renewal for the Section 8 Housing Choice Voucher Program. These funds, based on the increased utilization New Jersey achieved in the program last year, are critical to helping current voucher tenants maintain their housing stability during the coming year.