Emergency Mortgage Relief Act Advances to Senate

Assembly Bill 1842 (Harabedian), seeks to enact the California Emergency Mortgage Relief Act. The bill passed the Assembly on a vote of 58-14 despite arguments from the financial services industry that the bill creates duplicative compliance obligations and conflicts with the federal disaster framework.  

​The bill authorizes a borrower to request forbearance on a residential mortgage loan that has become uninhabitable as a direct result of conditions resulting from an event that was the subject of a proclaimed state of emergency issued by the Governor or by the federal government. A mortgage servicer would be prohibited from assessing any late fees to the borrower′s account or charging a default rate of interest during the forbearance period.
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The bill specifically states that it applies to state and federal depository institutions, licensees under California Finance Lenders Law, licensees under the California Residential Mortgage Lending Act and licensees under the California Real Estate Law. The bill does protect the validity of trustee’s sales and sales to bona fide purchasers