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 on Sept. 15 by California Gov. Gavin Newsom.
The mortgage forbearance bills by Assemblymember John Harabedian, D-Pasadena, who represents the devastated Eaton fire zone, follow a law enacted last year that gave victims of the Jan. 7 fires up to 12 months of mortgage relief.
“Wildfire recovery does not end when the flames are extinguished,” Harabedian said in a statement. “Unfortunately we know that climate change will make natural disasters more frequent and severe throughout California.”
AB 1847 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.
AB 1842 establishes a statewide program providing up to 12 months of mortgage relief for homeowners whose homes are made uninhabitable after a federally declared emergency.
“These 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’s commitment to recovery must be just as enduring,” Newsom said in a statement.
The governor created a voluntary program 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.
Months later, he signed AB 238, 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.
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.
That led to complaints from some borrowers who told The Times that they had difficulty getting relief or were told by their mortgage lenders or servicers if they didn’t want to pay it back in a lump sum, they would have to get a loan modification that could raise their interest rate.
Harabedian has said that most of the contracts and guidelines of Fannie Mae and Freddie Mac — the government-sponsored organizations that hold or guarantee the majority of U.S. mortgages — do not bar loan deferrals.
The extension bill, AB 1847, strengthens the deferral language so borrowers have greater certainty about their repayment options when they exit the program, Harabedian’s office noted.
Andrea Luquetta, an attorney for the Center for Responsible Lending, a non-partisan group that advocates for consumer friendly financial practices, said the changes strengthen the forbearance program for Jan. 7 fire victims.
“Servicers are required to offer deferral of the forborne payments to the end of the loan as the default option,” she said.
The statewide mortgage relief bill signed Tuesday by Newsom, AB 1842, builds on the Los Angeles County program. However, homeowners can only qualify for a forbearance if their homes are in a federally declared disaster zone.
The legislation was limited due to complaints by mortgage services that many mortgage contracts and guidelines do not have allowances for state-declared emergencies. However, homeowners do not need to cite any financial hardship to qualify for relief.
Luquetta said the Center for Responsible Lending also supported the bill establishing the statewide program.
“Forbearance works, it’s been proven in analysis after it’s been used in other states (such as Texas and Louisiana after Hurricane Harvey) and now more Californians can access it when they need it,” she said.