Brian Moynihan, CEO of Bank of America, told CNBC on Friday that his bank has helped nearly half a million customers defer their mortgage payments.
“What we mean by that is for our mortgage customers, if you have your mortgage with us, we just tack it on at the end. So, if it’s 28 years left on your mortgage, somewhere out there, 28 years from now if you don’t move, you don’t pay off your mortgage, or something like that doesn’t go on, you’ll have to make up the three payments that you made up in the summer here,” Moynihan said.
He added the idea of deferring the payment is to “defer the impact.” He also said the main key of the recently-passed $2.2 trillion CARES Act is to make sure money stays in the hands of people so they live and continue paying their bills.
“The other question is, I think incumbent upon employers like us, is keep the people employed, keep paying them—they should be able to pay their bills,” he said.
Moynihan put the half a million homeowners helped into perspective, saying Bank of America has 66 million customers. However, he noted there are still many people working and able to pay their bills.
“They’re still working, and they should pay their bills, would be my advice to the people, not only to a policy question but also the fiscal management question. So, we’re working with people who are losing their jobs. We have to preserve the ability to have cash flow,” Moynihan said.
The U.S. Department of Housing and Urban Development (HUD) announced a tailored set of mortgage relief options for homeowners with FHA-insured mortgages who have been impacted by COVID-19.
HUD states, effective immediately for those who cannot make mortgage payments due to the virus, servicers must extend deferred or reduced mortgage payment options for up to six and also provide an additional six months of forbearance if requested by the borrower.
This measure implements provisions contained in the CARES Act signed by President Donald Trump on March 27.
“The last thing any of us wants is for Americans to lose their homes unnecessarily while we continue to fight this invisible enemy. If you’re struggling, immediate help is now available. The FHA will continue to work with stakeholders to ensure that the loss mitigation options that are offered for both forward and reverse borrowers are appropriately tailored for the present situation,” said Dr. Benjamin Carson, Secretary of HUD.