Plain English Breakdown
Checked against official source text during the last sync.
California Disaster-related Mortgage Relief Act
This law allows homeowners to request a pause on mortgage payments if their home becomes uninhabitable due to a federally declared disaster.
What This Bill Does
- Allows borrowers to request payment pauses when their residential property is uninhabitable because of a federal disaster declaration.
- Requires lenders to offer an initial forbearance period of up to 180 days, which can be extended in 90-day steps for a total maximum of 12 months.
- Counts any pause time given before the official disaster declaration as part of the allowed forbearance limit.
- Prohibits lenders from charging late fees or default interest rates during the payment pause period.
- Requires lenders to report these accounts on credit reports without marking them specifically as being in forbearance.
Who It Names or Affects
- Homeowners whose residential property has become uninhabitable due to a federally declared disaster.
- Mortgage servicers who manage the loans for these homeowners.
- The Attorney General, district attorneys, and county counsel who can enforce this law in court.
Terms To Know
- Forbearance
- A temporary pause or reduction of mortgage payments agreed to by the lender.
- Uninhabitable
- A home that is not safe for people to live in due to damage from a disaster.
- Mortgage Servicer
- The company or bank that collects mortgage payments and manages the loan account.
Limits and Unknowns
- This relief only applies to homes damaged by a federally declared disaster, not all emergencies.
- Borrowers must affirm under penalty of perjury that their home is uninhabitable due to the disaster.