Mayor Karen Bass has called on banks and mortgage servicers to extend mortgage payment relief for homeowners recovering from the January wildfires, proposing three additional years beyond the one year provided under state law.
Under Bass' proposal, homeowners would receive a total of four years of payment relief, with the deferred payments added to the end of their existing mortgages without additional fees, penalties or negative credit impacts.
"Under my proposal, the years of relief are added to the back of a homeowner's current mortgage," Bass said. "What's important is during that time homeowners aren't charged any additional fees, or penalties and this relief does not negatively impact their credit."
The mayor emphasized that many families remain in temporary housing while navigating insurance claims and contractor negotiations as rebuilding continues across Pacific Palisades and Los Angeles County.
"These families are already carrying more than anyone should have to," Bass said. "Asking them to shoulder mortgage payments on top of all that would force them into an impossible — and unacceptable — choice."
Bass said she has begun preliminary discussions with the banking industry and expressed optimism about securing the voluntary extension.
"I am encouraged that our partners in banking and business will recognize that this is the fair and compassionate solution our community needs," she said. "We've seen extended relief work in the past — and we know it can work here."
California recently passed Assembly Bill 238, the Mortgage Forbearance Act, allowing homeowners whose properties were destroyed or rendered uninhabitable by the fires to pause mortgage payments for up to one year without late fees, penalties or foreclosure risk.
Assemblymember John Harabedian, D-Pasadena, introduced the bill in January with Assemblymember Jacqui Irwin, D-Thousand Oaks, as principal co-author. The legislation moved swiftly through the Democratic-controlled Legislature with unanimous, bipartisan support at each stage.
The bill passed 70-0 in the Assembly and 40-0 in the Senate under an urgency clause. Gov. Gavin Newsom signed AB 238 into law Sept. 22, and it took effect immediately.
The law requires mortgage servicers to offer an initial 90-day forbearance with extensions in 90-day increments up to 12 months upon borrower request. Homeowners need only attest to financial hardship caused by the disaster, with no extensive documentation required.
During forbearance, servicers cannot charge late fees or penalties, and they must report disaster-affected loans as current to protect borrowers' credit scores. The law also prohibits foreclosure proceedings while a borrower is in an approved forbearance period.
After forbearance ends, borrowers are not required to make lump-sum repayments and must be offered manageable catch-up options such as payment plans or loan extensions.
The January wildfires damaged or destroyed over 16,000 structures in communities including Pacific Palisades and Altadena. Following the fires, mortgage delinquencies surged from about 700 to over 4,100 in one month, according to a study cited by the California Credit Union League.
While Bass acknowledged AB 238 as a critical first step, she said additional support is essential for sustainable recovery.
"AB 238 is an important start, but one year simply isn't enough," the mayor said. "Families need more time to truly rebuild."