(SACRAMENTO, CA) – Today, Assemblymember John Harabedian’s (D-Pasadena) Mortgage Forbearance Act, has been signed by Governor Gavin Newsom.
AB 238, the Mortgage Forbearance Act, provides essential relief to survivors of the Los Angeles Fires by allowing a pause on mortgage payments for up to a year. Fire victims entering into forbearance will not face any penalties or credit damage during the pause in payments. Importantly, the bill also prohibits lenders from requiring lump sum payments at the conclusion of the forbearance period, allowing homeowners to focus on rebuilding.
“For months since the fires, survivors have been forced to make two housing payments: one for their temporary rental accommodations and another mortgage payment for a house that either doesn’t exist anymore or is uninhabitable due to smoke and ash damage. AB 238 will ease the financial burden that too many families are facing by allowing them to pause their mortgage payments for up to a year while they get back on their feet,” said Assemblymember Harabedian (D-Pasadena).
After the fire, Assemblymember Harabedian worked with the Governor to secure initial commitments of 90-day forbearance periods from nearly 400 lenders in California. AB 238 takes effect immediately. If you encounter any difficulties with your servicer, please notify the Department of Financial Protection and Innovation (DFPI) which is charged with ensuring your rights under this new law are upheld. You can also contact Assemblymember Harabedian’s district office at (626) 351-1917 for assistance.
The Governor’s decision has brought us a step closer to recovery.
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