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NEW YORK — JPMorgan Chase and Bank of America are easing mortgage repayment conditions for customers affected by the Los Angeles wildfires, as residents grapple with one of the most destructive natural disasters in the city's history.
Chase Home Lending is providing disaster forbearance for mortgage customers affected by the wildfires, parent firm JPMorgan said on Monday. Bank of America also said its program includes the possibility of mortgage forbearance tailored to customer needs.
Forbearance allows borrowers to temporarily pause repayments on their loans or pay lower amounts.
Bank of Montreal told Reuters the Canadian lender was also providing forbearance for affected customers.
JPMorgan's forbearance program will initially last for three months and can be extended in three-month increments for up to 12 months. However, options exist to stretch the relief period beyond that mark based on the investor or insurer.
Borrowers often turn to banks for such aid to help ease the cost of rebuilding. However, the strain on the industry's profitability from the unpaid loans can also prompt lenders to retreat from markets prone to natural catastrophes.
"The Los Angeles wildfires underscore the urgent need for financial institutions to prioritize climate risk management," said Laurent Birade, banking industry practice lead at Moody's.
"Banks with significant exposure to impacted sectors in their loan portfolios must understand, identify, measure, and manage their climate risk exposure through scenario analysis to ensure more resilient and sustainable financial operations."
Separately, Wells Fargo pledged $1.3 million from its foundation to support immediate and long-term wildfire relief efforts, a spokesperson for the bank said on Monday.
At least 24 people have died due to the fires.
Contributing: Pritam Biswas and Saeed Azhar
