Mortgage forbearance: state of emergency: wildfire.

Assembly Members Harabedian and Irwin have proposed mortgage forbearance protections for California homeowners affected by the January 2025 Eaton Wildfire, Palisades Fire, and associated straight-line winds. The legislation enables borrowers experiencing financial hardship due to these disasters to request up to 12 months of mortgage payment forbearance in 90-day increments.

Under the bill, mortgage servicers must respond to forbearance requests within 10 business days and cannot charge late fees or default interest rates during the forbearance period. The provisions apply to residential properties with four or fewer units and require borrowers to affirm their disaster-related hardship. Servicers must report accounts in forbearance as either current or maintaining their pre-disaster delinquency status to credit agencies, without indicating the forbearance arrangement.

The Department of Financial Protection and Innovation will provide online resources about forbearance options, including summaries of federal loan program guidelines and dedicated phone support for borrowers. While the bill establishes these state-level protections, it includes provisions ensuring mortgage servicers can maintain compliance with existing federal servicing requirements for government-backed loans. The legislation takes effect immediately upon passage to address urgent needs arising from the January 2025 disasters.