Legislation that will extend mortgage relief to victims of the January 2025 Los Angeles County wildfires and establish a similar permanent program for disaster victims statewide was signed into law Tuesday by Gov. Gavin Newsom.<\/p>\n
The mortgage forbearance bills by Assemblymember John Harabedian (D-Pasadena), who represents the devastated Eaton fire zone, follow a law enacted last year<\/a> that gave victims of the Jan. 7 fires up to 12 months of mortgage relief.<\/p>\n \u201cWildfire recovery does not end when the flames are extinguished,\u201d Harabedian said in a statement. \u201cUnfortunately we know that climate change will make natural disasters more frequent and severe throughout California.\u201d<\/p>\n AB 1847<\/a> extends relief for a total of 24 months for L.A. County homeowners suffering financial hardship whose homes remain uninhabitable. It also gives them until Jan. 7, 2029, to apply for the additional forbearance.<\/p>\n AB 1842<\/a> establishes a statewide program providing up to 12 months of mortgage relief for homeowners whose homes are made uninhabitable in a federally declared emergency.<\/p>\n \u201cThese new protections will make insurer obligations clearer and give homeowners more financial flexibility when they need it most. As fire seasons across the West become a year-round reality, California\u2019s commitment to recovery must be just as enduring,\u201d Newsom said in a statement.<\/p>\n The governor created a voluntary program<\/a> in January 2025 within weeks of the firestorms in Altadena, Pacific Palisades and nearby areas that 420 institutions signed on to and that initially provided just three months of relief.<\/p>\n Months later, he signed AB 238<\/a>, a Harabedian bill that provided for 12 months of mortgage relief and banned late fees, foreclosures and negative reports to credit bureaus for homeowners who receive it.<\/p>\n The law also prohibited mortgage lenders and servicers from requiring borrowers to pay back any forbearance in a lump sum, but it otherwise did not specify repayment terms. However, any forbearance was limited by the legal language in the mortgage.<\/p>\n That led to complaints from some borrowers who told The Times that they had difficulty<\/a> getting relief or were told by their mortgage lenders or servicers that if they didn\u2019t want to pay it back in a lump sum, they would have to get a loan modification that could raise their interest rate. <\/p>\n Harabedian has said that most of the contracts and guidelines of Fannie Mae<\/a> and Freddie Mac<\/a> \u2014 the government-sponsored organizations that hold or guarantee the majority of U.S. mortgages \u2014 do not bar loan deferrals.<\/p>\n The extension bill, AB 1847, strengthens the deferral language so borrowers have greater certainty about their repayment options when they exit the program, Harabedian\u2019s office noted.<\/p>\n