California Law Extends Up to One Year Mortgage Relief for Wildfire Victims

California Governor Gavin Newsom signed the Mortgage Forbearance Act into law to provide up to one year of mortgage relief for homeowners affected by the January 2025 wildfires, including the Palisades and Eaton fires. The law allows borrowers to request an initial 90-day forbearance period, extendable in 90-day increments up to 12 months, without late fees, penalties, or increased interest rates during this time. Mortgage servicers are prohibited from initiating foreclosure or eviction proceedings during forbearance and must report credit obligations in compliance with the Fair Credit Reporting Act to avoid penalizing borrowers. Homeowners can attest to fire-related financial hardship without documentation to qualify, and any participation in an earlier voluntary forbearance program will count toward the 12-month relief limit. Lenders must provide explanations for any denial of relief requests and allow applicants to correct errors, while the California Department of Financial Protection and Innovation offers resources and support for affected homeowners. This legislation aims to ease the financial burden on wildfire survivors who often face dual housing payments while rebuilding.