Southern California lawmakers representing Eaton and Palisade Fire Districts introduced a bill in Congress Thursday that would give homeowners nationwide a break on nearly a year of mortgage payments.
The bill, brought by U.S. Rep. D-Monterey Park and Brad Sherman Oaks, requires lenders to suspend six months of mortgage payments that can record homeowners who may record evidence of damage or damage to their property. Payments will be suspended without interest, fines or fees, but will not be forgiven.
Chu, who represents Altadena, said the pause, known as mortgage easing, only applies to federally supported loans that the Federal Declaration of Disaster has been signed by the president. Borrowers can choose to extend tolerance for six months if needed, thereby extending the life of the loan.
“They have lost their home, lived with friends or stayed in hotels, they are still working with insurance companies to cover hotel bills, or they are applying to FEMA, and now the mortgage is due, too,” Sherman said. “So it’s like paying rent or mortgages twice. Some of them find it difficult.”
The law does not require non-federal loans to provide tolerance to homeowners in disaster areas, although they often do so. The Chu office said the bill would standardize federal lenders’ tolerance policies.
After the January fire destroyed 13,500 buildings in Altadena, Pacific Palisades and Malibu, more than 400 lenders offered homeowners a 90-day mortgage payment without reporting missed payments to credit institutions.
“When they are worried about handling many other things, there is no need to worry about losing the mortgage,” said Chu, the person who survived the fire.
The bill has 11 other co-sponsors, including Southern California Rep. Laura Friedman (D-Glendale), Jimmy Gomez, Jimmy Gomez, D-Los Angeles, Linda T. Sánchez (d-whittier) and lou correa (d-santa ana) (d-santa ana), including representatives of the disaster, including the countries that have been affected by the disaster, including Louis’ Louis’s louis prop repa and jilla and jilla and jill toka.
No Republican lawmakers signed as original co-sponsors, but Chu and Sherman said they hope the bill will receive bipartisan support.
“It’s the smallest thing they can do,” Sherman said. “It’s almost unnecessary for anyone.”
Chu said part of the bill was a story she read in Pasadena Star-News, which reported that 3,200 survivors from Eaton Fire and Palisades Fire missed their mortgages after the January fire.
The story quotes a report from an insurance company that found that on-time mortgages in the Palisade Fire District fell by 23.9% from December to February and mortgage payments in the Eaton Fire District fell by 23.9%. During the same period, 0.2% of the state-wide payments increased.
Chu said the disaster bill came after the mortgage easing clause contained in the Care Act, which was conducted in a bipartisan-backed $200 million pandemic stimulus bill and was signed into law by President Trump in March 2020.
The Care Act requires lenders to require tolerance for monthly mortgage payments within 180 days and may be extended by 180 days.
Last month, Chu and Sherman also asked federal housing financing agencies that regulate mortgage giants Fannie Mae and Freddie Mac to allow mortgage lenders to grant mortgage lenders in six-month increments after natural disasters for up to two years.
Legislators wrote that the current year limit said: “Not considering the prolonged damage homeowners face after this huge disaster. Allowing longer periods of administrative barriers will help prevent unnecessary foreclosures, retain home ownership and support community resilience.”
