Bill > AB238

This bill provides mortgage forbearance relief for borrowers affected by specific wildfires in California declared as a state of emergency in January 2025 (the Eaton Wildfire, Palisades Fire, and Straight-line Winds disaster). The bill allows homeowners experiencing financial hardship directly related to these wildfires to request up to 12 months of mortgage payment forbearance, with initial 90-day periods that can be extended in 90-day increments. Borrowers must request forbearance within six months of the emergency's termination or by January 7, 2027, and must affirm their financial hardship. During the forbearance period, mortgage servicers are prohibited from charging late fees, applying default interest rates, initiating foreclosure proceedings, or negatively reporting the borrower's credit status. The bill applies to residential mortgage loans secured by properties with four or fewer residential units and requires mortgage servicers to notify borrowers within 10 business days about their forbearance request. Additionally, the Department of Financial Protection and Innovation must provide resources and a dedicated assistance phone number for affected borrowers. The bill is designed as an urgent measure to help homeowners impacted by the wildfire disaster avoid economic and social harm by providing temporary financial relief.

Budget and Finance, Business and Industry, Justice

https://leginfo.legislature.ca.gov/faces/billStatusClient.xhtml?bill_id=202520260AB238