Lawmakers representing LA wildfire zones introduce disaster mortgage relief bill

After the destruction of around 11,500 homes from the recent Los Angeles wildfires, congress members representing the communities that burned introduced disaster mortgage relief legislation on Thursday.

The "Mortgage Relief for Disaster Survivors Act" would give homeowners in presidentially declared disaster areas a six-month relief on their mortgage payments. The bill was introduced by Reps. Judy Chu and Brad Sherman who represent the Eaton and Palisades fire zones respectively.

"Disaster survivors – like thousands of my constituents still reeling from the devastating Eaton Fire – should not have to worry about missing a mortgage payment in the immediate aftermath of natural disasters," Chu said.  She said the legislation's inspiration came from conversations with constituents worried about making mortgage payments after their homes burned.

The bill would provide property owners who have a federally backed mortgage with six months of mortgage forbearance, with the option of extending for an additional six months without any interest, penalties, or fees accruing.

The bones of this bill come from the COVID-19 pandemic, the CARES Act, which provided the same 180 days of mortgage forbearance to homeowners who experienced financial hardship because of the pandemic.

CARES Act mortgage forbearance allowed homeowners to temporarily pause payments or lower them; it was not a forgiveness of debt. Such is the case with the newly introduced bill, as payments would be paused with no interest, penalties or fees.

"The devastating January wildfires in Los Angeles caused widespread economic harm, and just as we acted with urgency and compassion during the COVID-19 pandemic, we must now adapt the forbearance rules to meet the scale of this disaster," Sherman said.