Bill > AB238

This bill establishes temporary mortgage forbearance protections for borrowers impacted by specific wildfires in California (the Eaton Wildfire, Palisades Fire, and Straight-line Winds) declared as a state of emergency in January 2025. Borrowers experiencing financial hardship directly related to these wildfires can request forbearance for residential mortgage loans secured by properties with 4 or fewer units by submitting a request to their mortgage servicer before January 7, 2027, or six months after the state of emergency's termination. The bill requires mortgage servicers to offer an initial 90-day forbearance period, extendable in 90-day increments up to a maximum of 12 months. During this forbearance period, servicers cannot charge late fees, apply default interest rates, initiate foreclosure proceedings, or negatively report the borrower's credit status. Borrowers must affirm their financial hardship, and servicers must notify borrowers of their forbearance request status within 10 business days. The Department of Financial Protection and Innovation is required to provide online resources and a dedicated assistance telephone number. The bill aims to provide financial relief to homeowners impacted by these specific wildfire disasters and takes effect immediately as an urgency statute to help prevent economic and social harm.

Budget and Finance, Business and Industry, Justice

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