USAA to return $520MM to members sheltering-in-place, offers housing assistance

Property-casualty insurer USAA will return $520 million to members who comply with social distancing requirements, and pledged $4.4 million to nonprofits responding to the pandemic alongside property insurance and mortgage relief.

USAA Bank is offering special payment assistance programs for eligible members including a 60-day payment extension on consumer loans, special mortgage and home equity line of credit payment assistance, and a 90-day credit card payment deferral. The credit automatically will apply to their bill, no need to call or apply, USAA said in a release.

USAA companies provide insurance, banking, investments, retirement products and advice to 13 million current and former members of the U.S. military and their families. As a member-owned association, USAA returns a portion of profits to members. This payment brings the total amount returned to members since January 2019 to nearly $3 billion.

“We understand the impact this pandemic is having on our country and especially our military community and their families, many of whom also are working on the front lines of the crisis. Returning premiums provides timely help for our members,” said USAA President and CEO Wayne Peacock.

Data show members are following guidance to shelter-in-place, which leads to fewer driven miles driven and accidents member with an auto insurance policy in effect as of March 31, 2020, will receive a 20% credit on two months of premiums.

Financial relief for members experiencing financial difficulties include keeping current property or auto insurance policies and waiving late payment fees on USAA property  and auto insurance coverage through June 17, 2020.

USAA Life Insurance Company is offering special payment arrangements on life and health insurance policies, including a 60-day extension to the 30-day grace period; and waiving and reimbursing payments for COVID-19 related testing on or after Feb. 4, 2020, for Medicare holders. The company also ordered most of its 35,000 staff to work from home.

LendingTree: 71% of Small Biz owners fear they will never recoup COVID-19 losses

Up to 71% of more than 1,200 small business owners who participated in a LendingTree survey at the end of March worry that losses caused by the pandemic are unrecoverable despite workforce adjustments, emergency funding and billions in government relief.

The online survey contacted SB owners who had previously applied for funding through LendingTree’s small business lending database via email using Qualtrics from March 24-30, 2020. More than half, 57% of respondents, expect to lose at least 50% of their revenue in the next 90 days due to COVID-19.

“Unfortunately attempts by lawmakers to clear a path for rapid funding have so far fallen short as too many businesses are unsure or unable to access funds fast enough to save jobs,” said Hunter Stunzi, SVP of Small Business and Investments at LendingTree.

In addition, the evolving Small Business Administration rules, systems and processes, along with the overwhelming demand are confusing lenders, he added. “Technology-enabled non-bank lenders have not yet been deputized to be part of the solution, but that’s an avenue that should be considered.”

About 70% of SB owners adjusted their workforce while they stay open and try to source emergency funding, as 37% laid off employees, 43% reduced hours working hours, and 12% implemented pay cuts. Of the 49% businesses that temporarily closed, more than three-quarters were legally required under shelter-in-place and social distancing mandates.

At 47%, nearly half of the SB owners surveyed have taken on debt to keep their business afloat. An additional 34% attempted to seek financing but did not succeed. Only 3% of those surveyed received financing. More than half, 59% would use funds to cover payroll.

Eight in 10, SB owners said they have “no idea” where to get emergency funding for their business right now – and 69% do not have enough cash on hand to sustain their business for the next 90 days. As of March 30, up to 39% of SB owners had taken on credit card debt, the biggest debt category compared to business or personal loans that averaged at 14%.

Even though businesses expect to benefit from The Coronavirus Aid, Relief and Economic Security Act, which sets aside $350 billion in small business loans that include nearly zero interest options – it is not clear whether it is enough.

SBA COVID-19 disaster loans include Economic Injury Disaster Loans (EIDL), available at up to $2 million, with interest rates capped at 3.75% – designed to cover fixed debts, payroll costs, accounts payable and other business expenses. EIDL applicants also could receive a $10,000 forgivable loan advance.

Patch Homes rebrands as Noah, offers pandemic relief to homeowners

Home equity financing fintech Patch Homes, is rebranding as Noah, to reflect its homeownership based partnership where Noah provides financing to homeowners in exchange of home equity sharing.

Noah is offering homeowners debt-free access to their home equity sharing product “without adding monthly payments or interest,” according to a release. The San Francisco based company is helping homeowners in financial hardship to unlock “tens or hundreds of thousands of dollars” of their home equity.

The fintech will offer all new customers a $1,000 bonus at closing, and will wave all administrative and processing fees for existing Noah customers who decide to take advantage of its Homeowner Protection Program until May 1, 2020.

If homeowners find themselves unable to keep up with mortgage or property tax payments, or they need to make an emergency roof replacement, for example, Noah’s Homeowner Protection Program will make payments on the homeowner’s behalf. All protective advances offered through the program will be interest-free for the first 90 days.

Differently from traditional lenders that offer home equity loans or lines of credit, Noah provides homeowners with upfront financing in exchange of shares in a percentage of the home’s future appreciation or depreciation. As a result, Noah shares the risk with the homeowner in the long-term.

Noah gives homeowners cash payments for expected financial expenses or unexpected emergencies alike, and assists borrowers who may not be able to refinance or get other financing due to credit history challenges.

Access to debt financing through a bank or private lender, usually takes some time to process, said Noah Founder, Sahil Gupta, while the COVID-19 outbreak is forcing many homeowners to look for solutions, Noah provides a new alternative to home equity loans and HELOCs. “There has already been twice as much demand for this program in the first quarter of 2020 compared to all of 2019,” Gupta said.

Founded in 2016, Noah operates in 20 U.S. metro areas including in Southern California, the San Francisco Bay Area, Portland, Seattle, Denver, Boulder, Colorado Springs, and Salt Lake City. Noah’s investors include Union Square Ventures, Breega Capital, and Techstars Ventures.  

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