Assembly committee places wildfire mortgage-forbearance bill on suspense after lender concerns

Assemblymember Matt Herbedian introduced AB 238 to the Assembly Appropriations Committee on March 19, 2025, saying the bill "provides crucial safety net for LA County wildfire survivors." Under the measure, borrowers could request an initial forbearance of up to 180 days, with the option to extend "for additional relief if needed for up to 1 year maximum."

The bill drew immediate support from consumer advocates. Robert Harrell, executive director of the Consumer Federation of California, said the measure was an "important measure for wildfire survivors."

Industry witnesses warned the committee the bill, as drafted, risked conflict with existing federal loss-assistance programs and investor servicing contracts. Vanessa Lugo of the California Bankers Association said the industry had already provided coordinated relief and that AB 238 as written could "unintentionally create rules that clash with the guidelines and contract investors must follow." Indira McDonald of the California Mortgage Bankers Association echoed those concerns, urging amendments to align the bill with federal government-sponsored enterprise (GSE) and federal agency servicing rules so servicers would not be placed in conflict with investor contracts.

Assemblymember Hadwick, representing a fire-prone northern district, said she sympathized with wildfire victims but raised equity concerns about creating a new statewide approach that might treat recent victims differently than prior fire victims; she stated she "will be abstaining."

After discussion, the author asked for an "I" vote and committee staff placed AB 238 on the suspense file for consideration at the end of the hearing. At the Appropriations suspense hearing later the same day the committee substituted a motion and moved AB 238 forward (committee record: due pass on a roll call).