Newsom Signs Mortgage Protection Bill For California Wildfire Victims

In an effort to support Los Angeles wildfire victims, California Gov. Gavin Newsom on Monday signed into law Assembly Bill 238, which requires mortgage lenders to help borrowers experiencing financial hardship due to the disasters through mortgage forbearance for up to 12 months.

The legislation expands on a January announcement that 270 state-chartered banks, credit unions, and mortgage lenders and servicers committed to providing mortgage relief for property owners in designated wildfire areas as a result of the devastation in Los Angeles and Ventura counties.

As a result, the institutions agreed to offer forbearance for wildfire survivors for at least 90 days. Many lenders voluntarily offered forbearance for up to 12 months without reporting payment details to credit reporting agencies.

It was later reported by an NPR affiliate, LAist, that some banks were not following the rules and that homeowners were facing demands for repayment. The outlet reported that the California Department of Financial Protection and Innovation (DFPI) received 121 complaints related to issues like balloon payments, credit reporting and insurance.

“Homeowners rebuilding after a disaster need all the support they can get, including grace in light of this incredible hardship,” Newsom said in a statement. “This bill is a welcome expansion of the forbearance agreements my administration secured earlier this year with major national and state-chartered lenders to offer mortgage relief to LA fire victims.

“Recovery requires an all-hands-on-deck approach, and I look forward to additional conversations with lenders in the coming months about how we can continue to support survivors together.”

Monday’s announcement builds upon Newsom’s June launch of the CalAssist Mortgage Fund. The program offers up to $20,000 or three months of mortgage payments to residents whose homes were destroyed or made uninhabitable by state- or federally declared disasters between January 2023 and January 2025.

About 11,000 residential properties totaling $51.7 billion in value were impacted by January’s wildfires, according to a June report from Redfin. The wildfires destroyed more than 57,000 acres and 16,000 structures, according to an estimate from CAL FIRE.