JPMorgan Chase JPM-N and Bank of America BAC-N are preparing to ease 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. BofA 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.
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.”
At least 24 people have died due to the fires.
Firefighters raced to contain the frontiers of two Los Angeles wildfires that burned for the sixth straight day on Sunday, taking advantage of a brief respite in hazardous conditions before high winds were expected to fan the flames anew.
Reuters