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Committee advances Harabedian mortgage-forbearance bill for wildfire survivors amid lender concerns
Summary
AB 238 would allow borrowers affected by recent Los Angeles wildfires to request an initial mortgage forbearance of up to 180 days, with extensions for up to one year. The Assembly committee approved the bill and referred it to Judiciary, but mortgage industry groups urged amendments to align the measure with federal investor guidelines.
The Assembly Banking and Finance Committee voted to do pass AB 238 (Harabedian) and referred the bill to the Committee on Judiciary; the clerk recorded a 6-0 vote with some members not voting.
AB 238 would let borrowers affected by specified wildfire disasters request an initial forbearance on mortgage payments for up to 180 days, with the possibility of extension for a total of up to one year. Assemblymember Harabedian said the measure is intended to prevent foreclosures and allow time for survivors to rebuild.
Harabedian described neighborhoods wiped out by the Palisades and Eaton fires and cited preliminary estimates that many borrowers in the affected area face mortgage delinquency risks. He said, "AB 238 provides a critical safety net for LA County wildfire survivors," and committed on the record to bring amendments that would add documentation requirements and periodic check-ins after the first 180 days.
Witnesses for the bill included Renee Bayardo (reading testimony for HPP Cares), SEIU representatives, and other nonprofit and firefighter groups. Bayardo said survivors had to evacuate without documents and often face paying both rent and mortgage for destroyed homes; she testified that AB 238 would allow homeowners to "pause their mortgage payments for up to 360 days without accruing additional interest, penalties, or negative credit reporting." (Bayardo read testimony submitted by an organization; the committee record shows the testimony as provided.)
Lender groups, including Vanessa Lugo of the California Bankers Association and Indira McDonald of the California Mortgage Bankers Association, registered concerns rather than outright opposition. They said banks and servicers had already offered a 90-day forbearance and that state law should be aligned with existing federal guidelines and investor (GSE) rules to avoid conflicts with servicing agreements. Lugo asked that servicers who follow investor loss-mitigation guidelines be deemed in compliance with any new state requirement.
Assemblymember Blanca Rubio moved the bill; Assemblymember Soria seconded. The clerk recorded the roll as: Valencia — yes; Chen — not voting; Dixon — not voting; Fong — yes; Krell — yes; Michelle Rodriguez — yes; Blanca Rubio — yes; Soria — yes. The committee clerk recorded the motion as passed and referred to Judiciary. Harabedian and stakeholders committed to continue negotiations on amendments ahead of subsequent committee stops.
