California Emergency Mortgage Relief Act.

Plain English Breakdown

The official source does not specify the exact duration after an emergency during which homeowners can request help.

California Emergency Mortgage Relief Act

The California Emergency Mortgage Relief Act allows homeowners to request mortgage payment forbearance if their home becomes uninhabitable due to an emergency, and sets rules for how long this relief can last.

What This Bill Does

• Allows people who live in homes that become unsafe because of an emergency to request a break from paying their mortgage.
• Requires lenders to offer up to six months of initial forbearance, which can be extended by the borrower's request up to one year total.
• Prohibits lenders from charging late fees or higher interest rates during this time.
• Requires lenders to report these situations as if payments are current on credit reports.

Who It Names or Affects

• Homeowners who face emergencies making their homes uninhabitable
• Lenders and mortgage servicers

Terms To Know

Forbearance

A period when a lender allows a borrower to delay or reduce payments on a loan.

Mortgage Servicer

The company that collects mortgage payments and manages the account for the lender.

Limits and Unknowns

• Does not specify how long after an emergency homeowners can request this help.
• Requires local agencies to handle additional responsibilities without extra funding from the state.

Official Summary Text

AB 1842, as amended, Harabedian.
California Emergency Mortgage Relief Act.
Existing law authorizes a borrower who is experiencing financial hardship that prevents the borrower from making timely payments on a specified residential mortgage loan due directly to a specified state of emergency proclaimed by the Governor, or a specified federally declared disaster, to request forbearance on their residential mortgage loan, as prescribed. Existing law requires a mortgage servicer, except as specified, to offer mortgage payment forbearance for an initial 90-day period that may be
extend
extended
up to a maximum forbearance period of 12 months and prohibits a mortgage servicer from assessing any late fees to the borrower’s account or charging a default rate of interest during
the forbearance period.
This bill would, among other things, similarly authorize a borrower to request forbearance on a residential mortgage loan, as defined, secured by
a
residential real property that has become uninhabitable as a direct result of an emergency, as specified. The bill would require the borrower to affirm that as a direct result of an emergency, a residential unit is uninhabitable. Because the bill would expand the crime of perjury, the bill would impose a state-mandated local program.
This bill would, except as specified, require a mortgage servicer to offer mortgage payment forbearance of a period of up to an initial 180 days, to be extended at the request of the borrower in 90-day increments, up to a maximum forbearance period of 12 months. The bill would provide that the forbearance period includes any period of
forbearance related to the emergency that a mortgage servicer has provided to a borrower before the effective date of these provisions. The bill would also prohibit a mortgage servicer from assessing any late fees to the borrower’s account or charging a default rate of interest during the forbearance period.
This bill would require a mortgage servicer to report the credit obligations of borrowers under an emergency-related forbearance plan in compliance with the federal Fair Credit Reporting Act. For accounts granted emergency-related mortgage payment relief, the bill would prohibit mortgage servicers from furnishing information during the forbearance period indicating that the payments are in forbearance and would require them to report the credit obligation or account as current or delinquent, as specified.
This bill would authorize a borrower to bring a certain civil action to enforce these provisions.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a specified reason.

Current Bill Text

Download Bill PDF