In the News

By Laura J. Nelson

"The Southern California lawmakers who represent the Eaton and Palisades fire zones introduced a bill in Congress on Thursday that would give homeowners affected by natural disasters nationwide a break on mortgage payments for almost a year.

The bill, introduced by U.S. Reps. Judy Chu (D-Monterey Park) and Brad Sherman (D-Sherman Oaks), 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. Payments would be paused with no interest, penalties or fees, but would not be forgiven.

That pause, known as mortgage forbearance, would apply only to federally backed loans in areas where a federal disaster declaration has been signed by the president, said Chu, who represents Altadena. Borrowers could extend the forbearance for another six months if needed, extending the life of the loan.

“They’ve lost their home, their whole life, they’re living with friends or living in a hotel, they’re still working with their insurance company to get that hotel bill covered, or they’re applying to FEMA, and now the mortgage is due too,” said Sherman, whose district includes Pacific Palisades and Malibu. “So it’s like paying rent or a mortgage twice. Some of them are finding that quite difficult.”

Nonfederal lenders are not required by law to offer forbearance to homeowners in disaster zones, although they often do. Chu’s office said the bill would standardize the forbearance policies for federal lenders.

After the January fires, which destroyed more than 13,500 buildings in Altadena, Pacific Palisades and Malibu, more than 400 lenders offered homeowners a 90-day pause on mortgage payments without reporting the missed payments to credit agencies.

People who survived the fire, Chu said, “shouldn’t have to worry about missing a mortgage payment while they’re worrying about dealing with so many other things.”

The bill has 11 other co-sponsors, all Democrats, including Southern California Reps. Laura Friedman (D-Glendale), Jimmy Gomez (D-Los Angeles), Linda Sánchez (D-Whittier) and Lou Correa (D-Santa Ana), as well as several representatives from disaster-prone states, including Hawaii Rep. Jill Tokuda and Louisiana Rep. Cleo Fields.

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