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Assemblymember John Harabedian (D - Pasadena) and Assembly Speaker Robert Rivas announced the launch of an Outcomes Review of Assembly Bill 238, the Mortgage Forbearance Act, which requires mortgage servicers to offer up to 12 months of forbearance to homeowners experiencing financial hardship due to the January 2025 Los Angeles wildfires. The Outcomes Review program is a new oversight program designed to evaluate compliance outcomes from legislative enactments. In a press release announcing the review, Assemblymember Harabedian stated that he has received reports of lender noncompliance with the mortgage forbearance law.
In addition to the review of outcomes associated with AB 238, Harabedian also announced the introduction of two new bills: Assembly Bill 1847, which would extend the mortgage forbearance provisions enacted under the law by two additional years, andAssembly Bill 1842, which would create a statewide mortgage forbearance program for future natural disaster survivors, under which borrowers could pause mortgage payments whenever a state of emergency is declared by the Governor or the federal government. In announcing the oversight and bill introductions, Assemblyman Harabedian noted that recovery from the Eaton and Palisades fires has proven longer and more complex than initially anticipated. Insurance claim delays, labor and materials shortages, permitting backlogs, and escalating rebuilding costs have left many homeowners displaced well beyond the original forbearance period. The California Department of Financial Protection and Innovation has received 233 consumer complaints about mortgage forbearance since January 2025, with 92 percent resolved in favor of consumers, according to state data released last month. The Mortgage Forbearance law that was signed into law in September 2025 required mortgage servicers to respond to forbearance requests within 10 business days and prohibited late fees, foreclosure proceedings, and negative credit reporting during the forbearance period. Lenders are prohibited from demanding lump-sum repayment at the end of forbearance if the borrower was current on their mortgage before the fire. Comments are closed.
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