Clarification on Stay-at-Home Orders for DFPI Licensees
Last week, Gov. Gavin Newsom issued a new stay-at-home order to protect the health and well-being of all Californians and to continue facilitating a consistent approach across the state to slow the spread of COVID-19.
The order took effect on Dec. 5 and requires regions in which hospital lCU (Intensive Care Unit) availability drops below 15 percent to implement the stay-at-home order within 24 hours. The regional orders must then remain in effect for at least three weeks. The DFPI received questions about whether the new retail 20 percent capacity limitation applies to branches and customer-facing locations.
To clarify, banks, credit unions, mortgage lenders and servicers, and other financial service providers are considered essential businesses under the state order. Accordingly, retail or other capacity limits do not directly apply. However, licensees should continue promoting measures that maintain social distancing and anti-congregating practices and continue following CDC guidelines. Please consult with State and local public health departments regarding COVID-19 requirements and restrictions.
While DFPI Offices will be closed, licensees can still reach us at (866) 275-2677 or Ask.DFPI@dfpi.ca.gov.
Renter, Landlord COVID-19 Relief Program Extended
Gov. Gavin Newsom, on June 28, 2021, signed legislation that expands and extends the CA COVID-19 Rent Relief program designed to provide financial relief to renters and landlords with unpaid rental debt because of the pandemic.
The rent relief program re-authorized in AB 832 pays 100 percent of unpaid rent payments from April 1, 2020 through November 1, covers some utility bills, and provides other protections for tenants who suffered COVID-related financial hardships. Landlords also may apply through the program for funds to cover unpaid rents.
To assist renters and landlords with the application process, a Local Partner Network of community-based organizations are available throughout the state to provide assistance and support with the rent relief program. The list of organizations can be found here: https://housing.ca.gov/covid_rr/index.html.
Consumer financial relief information and advisories
The State of California is working to soften the financial impact of COVID-19 on residents who are struggling to pay their mortgage and bills. At Governor Gavin Newsom’s request, Citigroup, JP Morgan Chase, US Bank, Wells Fargo, and nearly 200 state-chartered banks, credit unions, and mortgage lenders and servicers have committed to providing relief for consumers and homeowners in California.
Californians who are struggling with the COVID-19 crisis may be eligible for the relief detailed below after contacting their financial institution or debt servicer.
- List of participating financial institutions: https://dfpi.ca.gov/covid19-updates-fi/.
- List of participating student loan servicers: https://dfpi.ca.gov/contact-information-for-private-student-loan-servicers/
The DBO also encourages businesses and consumers to be extra vigilant of fraud, scams, and unlawful activities seeking to exploit the pandemic and associated financial uncertainties. The following consumer alerts detail situations to be aware of and how to protect yourself:
- Advisory to Consumers on Private Placements
- Advisory to Small Businesses with Merchant Cash Advance Contracts
- Consumer Alert: Be Vigilant Against Scams and Unlawful Activities Seeking to Exploit Heightened Economic Anxieties
90-day grace period for all mortgage payments
If you are impacted by COVID-19, these financial institutions will offer, consistent with applicable guidelines, mortgage-payment forbearances of up to 90 days, which allow you to reduce or delay your monthly mortgage payment. In addition, they will:
- Give you a streamlined process for requesting forbearance for COVID-19-related reasons, supported with available documentation;
- Confirm approval of and terms of forbearance program; and
- Provide you the opportunity to extend your forbearance agreement if you continue to experience hardship due to COVID-19.
Relief from fees and charges for 90 days
For at least 90 days, financial institutions will waive or refund mortgage-related late fees and other fees including early CD withdrawals.
No new foreclosures for 60 days
Financial institutions will not start any foreclosure sales or evictions, consistent with applicable guidelines.
No credit score changes for accessing relief
If you are taking advantage of this COVID-19-related relief, late or missed payments will not be shared with credit reporting agencies and will not affect your credit score, consistent with applicable guidelines.
Privately held student loans
Under the new initiative negotiated by California and other states, students with commercially owned Federal Family Education Loan or privately held student loans who are struggling to make payments due to the COVID-19 pandemic may also be eligible for expanded relief. Such borrowers should immediately contact their student loan servicer to identify options that are appropriate to their circumstances.
Questions and answers on financial relief
How do I get mortgage relief and/or forbearance?
You should contact and work directly with your mortgage servicer to learn about and apply for available relief. Please note that financial institutions and their servicers are experiencing high volumes of inquiries.
How long will the forbearance last?
The terms of a forbearance will be agreed to between you and your mortgage service. Financial institutions will confirm approval of and terms of the forbearance program.
What effect will this have on my credit report?
Consistent with applicable guidelines, financial institutions will not report derogatory information (e.g., late payments) to credit reporting agencies but may report a forbearance, which typically does not alone negatively affect a credit score.
How long will these programs last?
It is still unclear how severe or how long the COVID-19 impacts will be. Financial institutions have committed to necessary relief and will be assessing the ongoing conditions and necessity of continuing relief.
What if my financial institution isn’t offering this relief?
At this time, JP Morgan Chase, US Bank, Wells Fargo and Citigroup, and over 200 state-chartered banks, credit unions are supporting these commitments. The state will welcome any other institution that would like to meet the moment and provide much-needed financial relief to Californians.
What if I already made a payment or was hit with a fee because of COVID-19?
These measures go into effect as of March 25, 2020.
Is the mortgage relief available to businesses?
The relief is currently only available for residential mortgages.
What if my mortgage servicer is not communicative or cooperative?
You can file a complaint with the Department of Business Oversight (DBO) through their online complaint form at https://dfpi.ca.gov/file-a-complaint. You can also get assistance by contacting the DBO Consumer Services Office at (866) 275-2677 or (916) 327-7585, and through email at Ask.DBO@dbo.ca.gov.
Licensee guidance from BCSH and the DFPI:
The Business, Consumer Services and Housing Agency (BCSH) and the Department of Business Oversight (DBO) have issued guidance below to limit foreclosures and evictions of those experiencing financial hardships associated with closures and other steps taken to contain the coronavirus.
- Guidance to Broker-Dealers and Investment Advisers (BDIA) During the COVID-19 Pandemic (PDF)
- Guidance for Financial Institutions During the COVID-19 Pandemic (PDF)
- Guidance to Finance Lenders, PACE Administrators, Deferred Deposit Originators, and Premium Finance Companies (PDF)
- Guidance for Escrow Agents, Finance Lenders and Servicers, Student Loan Servicers, Residential Mortgage Lenders and Servicers, and Mortgage Loan Originators During the COVID-19 Pandemic (PDF)
- Notice to Securities and Franchise Filers (PDF)
- California Department of Public Health – Information on Coronavirus Disease 2019 (COVID-19)
- California Department of Public Health daily updates on COVID-19
- Governor Newsom Issues Executive Order to Protect Renters and Homeowners During COVID-19 Pandemic
- Governor Newsom Announces Additional Relief for Californians Impacted by COVID-19
- North American Securities Administrators Association (NASAA) Coronavirus COVID-19 Resource page
- U.S. Department of Education: Coronavirus and Forbearance Information for Students, Borrowers, and Parents
DFPI Issues Guidance to Debt Collectors, Mortgage Lenders, and Servicers
The DFPI on April 15 issued reminders to debt collectors, mortgage lenders, and servicers about protections for California renters and homeowners experiencing economic hardship under the COVID-19 pandemic.
Under California law, any “unpaid rent or other unpaid financial obligation of a tenant” that came due between March 1, 2020, and June 30, 2021, may qualify as COVID-19 rental debt and be subject to certain protections, DFPI Commissioner Manuel P. Alvarez noted in a message to debt collectors.
A similar notice to mortgage lenders and servicers noted the requirements under the COVID-19 Small Landlord and Homeowner Relief Act of 2020 and encouraged then to work with affected customers and communities to avoid foreclosures.
If you have been financially affected by COVID-19, you may be eligible for:
- Unemployment insurance
- Eviction protection
- Mortgage relief
- Small business and employer relief
- Food assistance
- No credit score changes
Get more information and the latest resources from the Governor’s COVID-19 updates website.