JPMorgan Chase and Bank of America are easing mortgage repayment conditions for some customers affected by the recent wildfires in Los Angeles. The city is facing one of the most destructive natural disasters in its history.
According to Reuters, on Monday (January 13), JPMorgan Chase announced that its subsidiary, Chase Home Lending, is providing disaster-based loan repayment deferment services for mortgage customers impacted by the Los Angeles wildfires. Bank of America also mentioned that their plans include the possibility of customizing mortgage repayment deferment terms based on customers’ needs.
These measures allow mortgage borrowers to temporarily suspend loan repayments or pay lower amounts.
Bank of Montreal in Canada told Reuters that they are also offering relief to affected customers.
JPMorgan Chase’s repayment deferment program initially lasts for three months and can be extended in three-month increments, up to a maximum of 12 months. However, the choice to extend the grace period depends on the situation of investors or insurers.
Borrowers often seek this kind of assistance from banks to help alleviate the costs of rebuilding after a disaster. However, unpaid loans can put pressure on the profitability of the industry, which may lead lending institutions to withdraw from markets prone to natural disasters.
Laurent Birade, Banking Business Director at Moody’s, stated: “The Los Angeles wildfires highlight the urgent need for financial institutions to prioritize climate risk management.”
“Banks with larger industry risk exposures in their loan portfolios must understand, identify, measure, and manage their climate risk exposures through scenario analysis to ensure financial activities are more resilient and sustainable,” he added.
Furthermore, a spokesperson for Wells Fargo stated on Monday that the bank has committed $1.3 million from its foundation to support current and long-term wildfire relief efforts.
The wildfire has resulted in at least 24 fatalities.