Fire Survivors Say AB 238 Foreclosure Protections Fell Short as AB 1847 Seeks Stronger Mortgage Relief for 2 years
At a hearing on with the Friday, 3/20, Assemblymember Harabedian and Assembly Banking and Finance Committee Chair Assemblymember Avelino listened to Eaton and Palisades fire survivors relay how mortgage servicers delayed or denied relief required under AB 238, the Mortgage Forbearance Act, even though the law requires up to 12 months of forbearance for homes destroyed or made uninhabitable by the January 2025 fires and bars late fees, foreclosure activity, negative credit reporting, and lump-sum repayment demands. Survivors described being stonewalled by lenders, while lawmakers cited complaint data showing that more than 90% of cases brought to the California Department of Financial Protection and Innovation were resolved in consumers’ favor. In response, Assemblymember John Harabedian said he introduced AB 1847 to extend forbearance protections from 12 months to 36 months and strengthen penalties for noncompliant lenders. The first forbearance periods granted under AB 238 began expiring in late 2025. If AB 1847 passes, survivors would have until 2028 to rebuild without the threat of foreclosure.
Homeowners experiencing difficulty with mortgage servicers can file complaints with the Department of Financial Protection and Innovation (DFPI) at dfpi.ca.gov or by calling 866-275-2677. Harabedian’s district office can be reached at 626-351-1917.