Over the past week, credit unions across California received numerous news items regarding an important mortgage forbearance issue in Sacramento.

Serval days ago, Governor Gavin Newsom announced a commitment from more than 160 lending institutions last week to provide mortgage relief for fire survivors impacted by the 2025 Los Angeles-area firestorms. These lenders agreed to streamline the process for requesting at least one additional forbearance period of up to 90 days for qualified borrowers, beyond the 12-month commitment required by Assembly Bill 238 (Assemblymember John Harabedian — D-Pasadena), which the governor signed into law last year

Credit unions have once again stepped up to support their membership during this challenging time. Here’s how:

• The commitment provides additional forbearance of up to 90 days to impacted customers, subject to approval by investors such as Fannie Mae and Freddie Mac, and consistent with the terms of the governor’s January 2025 agreement with banks.
• This includes offering payment options that do not include lumpsum (balloon) payments, waiving any mortgage-related late fees that accrue during the forbearance period, and not reporting late payments on forbearance amounts to credit reporting agencies.

This Week’s Announcement

On Thursday of this week, the governor also announced a further expansion of the CalAssist Mortgage Fund Program for survivors of qualified disasters, including the 2025 Los Angeles firestorms. This includes expanding the relief period from 3-12 months of mortgage payments, with a total increase to $100,000.

Under the expanded program, eligible homeowners may receive 12 months of mortgage payments, paid directly to their mortgage servicers. Assistance is available to homeowners who are current on their mortgage, in forbearance, or behind on payments. Families who previously received three months of assistance will be offered additional support, bringing total assistance to a full year.

For additional information on eligibility or the program, click here.

Assemblymember Harabedian’s Measures

Harabedian, whose district was devastated by last year’s wildfires, introduced two measures that will also impact forbearance:

• Assembly Bill 1847 would extend the protections and framework of AB 238 for an additional two years — for a total of three years — while allowing borrowers to repay the money through a deferral that extends the mortgage. This would take effect immediately if signed into law.
• Assembly Bill 1842 would provide statewide mortgage forbearance for homeowners whose residences are rendered uninhabitable by a state of emergency declared by the governor or the federal government.

Under AB 1842, homeowners would be able to pause mortgage payments temporarily without late fees, penalties, or foreclosure risk, and with protections for credit reporting. In addition, mortgage servicers would be required to file a monthly report to the California Department of Financial Protection and Innovation (DFPI) on the number of forbearance requests received, approved, and denied during a declared emergency. The report would also require a reason for denial.

AB 1842 also allows a borrower to bring a civil action against a mortgage servicer for violations of the law.

“We are engaging with the author on these new pieces of legislation and will continue to update credit union leaders on these bills as they make their way through the long legislative process,” said Robert Wilson, senior vice president of state advocacy for California’s Credit Unions.

If you have any comments or questions, please email Robert Wilson.