Southern California Lawmakers Propose Mortgage Relief for Disaster-Affected Homeowners

Los Angeles, CA — Southern California lawmakers introduced a bill in Congress on April 17, 2025, aimed at providing mortgage payment relief for homeowners impacted by natural disasters across the nation. The bipartisan proposal, led by U.S. Reps. Judy Chu (D-Monterey Park) and Brad Sherman (D-Sherman Oaks), seeks to offer a nearly yearlong reprieve from mortgage payments to affected homeowners.

The legislation stipulates that lenders pause mortgage payments for six months without accruing interest, penalties, or fees for those who can prove their properties suffered damage or destruction. Homeowners could opt to extend the forbearance period for another six months if necessary, allowing them more time to recover financially.

“They’ve lost their home, their whole life,” Sherman stated. “They’re living with friends or in hotels, still trying to get their insurance covered. It’s like paying rent or a mortgage twice, which many find difficult.”

This proposed bill specifically targets federally backed loans in areas where the President has issued a federal disaster declaration. In the wake of the January fires that destroyed over 13,500 buildings in parts of Altadena, Pacific Palisades, and Malibu, homeowners had been offered a 90-day pause on mortgage payments, with assurance that missed payments would not affect their credit scores.

“Survivors of these fires shouldn’t have to worry about missing mortgage payments while dealing with everything else,” Chu emphasized. Currently, non-federal lenders are not mandated to provide forbearance options, but the proposed legislation aims to standardize such policies for federal lenders.

The bill comes ahead of an anticipated coalition of 11 co-sponsors, all Democrats, including representatives Laura Friedman (D-Glendale), Jimmy Gomez (D-Los Angeles), and Linda Sánchez (D-Whittier). Although no Republican members have yet aligned with the proposal, both Chu and Sherman express hope for bipartisan support. “This is the smallest thing they could do,” Sherman said. “This costs virtually nothing to anyone.”

Chu noted that the inspiration for the bill came partly from a report in the Pasadena Star-News, which indicated that approximately 3,200 individuals were affected by the Eaton and Palisades fires. Data from the report showed that on-time mortgage payments in the Palisades region dropped by 23.9% from December to February.

In response to ongoing challenges, last month Chu and Sherman also requested that the Federal Housing Finance Agency permit mortgage lenders to offer forbearance for periods extending up to two years following natural disasters. Their correspondence warned that the current one-year cap fails to accommodate the extensive recovery periods homeowners face after significant disasters.

“Allowing a longer period with fewer administrative hurdles would help prevent unnecessary foreclosures, preserve homeownership, and support community resilience,” they stated in their request to the agency.