Plain English Breakdown
The source text states the bill takes effect immediately but does not provide a specific calendar date for when it became law, only that it was chaptered on September 22, 2025.
Wildfire Mortgage Forbearance Relief Act
This law allows homeowners facing financial hardship from the January 2025 wildfires to request a pause on mortgage payments for up to one year without late fees or foreclosure actions.
What This Bill Does
- Allows borrowers experiencing financial hardship directly due to specific January 2025 wildfire disasters to request forbearance on their residential mortgage loans.
- Requires servicers to offer an initial payment pause of up to 90 days, which can be extended in 90-day steps upon borrower request for a maximum total period of 12 months.
- Prohibits servicers from charging late fees or default interest rates during the forbearance period.
- Bans servicers from starting foreclosure processes, seeking court orders to sell homes, or carrying out evictions related to foreclosure while the borrower is in forbearance.
- Requires credit reporting agencies to report these accounts as current or delinquent based on specific rules and prohibits them from noting that payments are in forbearance.
Who It Names or Affects
- Homeowners with mortgages secured by properties containing four or fewer residential units who suffered financial hardship directly due to the Eaton Wildfire, Palisades Fire, or Straight-line Winds.
- Mortgage servicers managing loans for affected borrowers.
- The Department of Financial Protection and Innovation.
Terms To Know
- Forbearance
- A temporary pause in mortgage payments agreed upon by the lender and borrower during a hardship caused by a disaster.
- Mortgage Servicer
- The company that collects monthly mortgage payments from borrowers and manages their loan accounts.
Limits and Unknowns
- Eligibility is limited to loans secured by residential real property improved by four or fewer units.
- Borrowers must affirm under penalty of perjury that they are experiencing financial hardship directly due to the wildfire disaster.
- The law takes effect immediately as an urgency statute, but no specific calendar date for enactment was provided in the source text.