Southern California lawmakers have proposed a federal bill aimed at providing mortgage relief to homeowners impacted by natural disasters. The legislation, introduced by U.S. Reps. Judy Chu and Brad Sherman, seeks to mandate a six-month mortgage payment pause for affected homeowners with federally backed loans. This pause would eliminate interest, penalties, and fees, helping those who have suffered property damage. Borrowers may also extend the forbearance for an additional six months. The bill aims to alleviate the financial burden faced by those displaced by disasters, particularly after recent wildfires in the region.
The bill would require lenders to grant a six-month pause on mortgage payments for homeowners who could document evidence of damage or destruction to their properties.
‘They've lost their home, their whole life...now the mortgage is due, too,’ said Sherman, highlighting the struggles of fire victims in managing mortgage payments during recovery.
Non-federal lenders are not required by law to offer forbearance to homeowners in disaster zones, although they often do, making the new bill a step towards standardization.
The pause, known as mortgage forbearance, would apply only to federally backed loans in areas where a federal disaster declaration has been signed.
#mortgage-forbearance #natural-disasters #california-lawmakers #federal-legislation #homeowner-relief
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