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Assembly committee advances bill to extend mortgage forbearance for LA wildfire survivors
Summary
The Assembly Judiciary Committee voted to move AB 238, which would allow wildfire-affected homeowners in Los Angeles County to request up to 180 days of initial mortgage forbearance with the option to extend to one year; the bill cleared committee on a voice/roll-call and will go to Appropriations.
Assemblymember Harabedian introduced AB 238 on the Assembly Judiciary Committee floor, telling members the bill would create a clear, accessible safety net for Los Angeles County wildfire survivors by allowing borrowers to request an initial mortgage forbearance of up to 180 days, with the option to extend for additional relief up to one year in total.
The bill’s author said preliminary data show widespread property loss and displacement in the January wildfires in Los Angeles County and argued that short-term relief already provided by many lenders — a governor-led industry agreement for 90 days’ relief — is insufficient for long-term recovery. “Without relief, these mounting financial burdens could trigger a wave of foreclosures,” the author said in committee testimony.
A coalition of tenants’ and labor groups supported the bill in committee. Renee Bayardo, testifying for RISE Economy and HPP CARES, said HPP CARES is a California nonprofit housing counseling organization and that many families they assisted at disaster resource centers had lost their homes and face the hardship of paying mortgage and rent at the same time. Matt Lachey of SEIU California and Doug Subers of the California Professional Fire Fighters also expressed support.
Financial-industry groups raised concerns but characterized them as constructive, not formal opposition. Vanessa Lugo of the California Bankers Association said banks were already offering relief and urged amendments to avoid conflicts with investor and guarantor rules. Indira McDonald of the California Mortgage Bankers Association and other servicer representatives asked the author to align the bill with GSE (government-sponsored enterprise) and investor guidelines, saying servicers face contractual obligations that could conflict with a state-mandated forbearance period without documentation checks. Several industry witnesses asked that compliance with existing federal/state disaster-relief servicing guidelines be deemed compliance with the bill.
Committee members thanked the author and supporters and pressed for continued negotiations with industry; the author committed to amendments to add documentation checkpoints after the first 180 days and to continue talks about potential conflicts with investor/GSE rules. The committee moved the bill to the Assembly Appropriations Committee.
Votes and procedural outcome: the committee recorded the motion to move AB 238 to appropriations and completed a roll call; members recorded in the transcript as voting “aye” include Kalra; Bauer; Bridal (author); Brian; Chen; Connelly; Harabedian; Pacheco; Pappan; Stephanie; and Ziburr; Sanchez was recorded as not voting. The motion passed and AB 238 was referred to Appropriations.
Why it matters: The bill targets borrowers displaced or otherwise financially affected by the Los Angeles wildfires by creating a state-level forbearance option intended to prevent foreclosures and reduce housing instability while allowing negotiations with mortgage servicers and investors to continue.
What’s next: Committee members and stakeholders said they expect amendments before floor consideration to address servicer/investor conflicts and to define documentation and check-in requirements after the initial forbearance period.
