Los Angeles Mayor Karen Bass has applauded new state legislation aimed at extending mortgage forbearance for homeowners in the city impacted by recent wildfires. The move comes after Mayor Bass led a delegation of residents – including renters and those living in townhomes, condos, and mobile homes – to Sacramento earlier this week to advocate for relief measures. The legislation, introduced by Assemblymember John Harabedian, seeks to provide additional financial breathing room for those struggling to rebuild after devastating fires.
The core issue, as highlighted by Mayor Bass, is the difficulty many wildfire survivors face in navigating the recovery process even as simultaneously managing mortgage payments. “Recovery should never feel harder than the disaster itself, but for so many wildfire survivors, ongoing mortgage payments and delays, underpayments, and denials from insurers are making it impossible to rebuild,” she said. The Mayor emphasized the need for a streamlined and supportive process, acknowledging the significant hurdles residents face in securing insurance claims and rebuilding their lives.
Extending a Critical Lifeline: AB 1847 and AB 1842
Assemblymember Harabedian has introduced two bills to address the challenges facing wildfire survivors. AB 1847 aims to extend the existing Mortgage Forbearance Act (AB 238 from 2025) by an additional two years for Los Angeles wildfire survivors experiencing financial hardship. As reported by E&E News, this extension is intended to provide much-needed stability for homeowners still grappling with the aftermath of the Palisades and Eaton fires.
The second bill, AB 1842, proposes a broader framework for mortgage relief across California. Dubbed the California Emergency Mortgage Relief Act, it would establish a system allowing homeowners to pause mortgage payments whenever a state of emergency is declared by the Governor or federal government, covering events like wildfires, floods, and earthquakes. This proactive approach seeks to prevent future financial crises for homeowners impacted by natural disasters.
A Push for Voluntary Relief and State Investment
Mayor Bass’s advocacy for mortgage relief extends beyond legislative efforts. In November, she directly called on banks and mortgage servicers to voluntarily extend mortgage payment relief for homeowners still recovering from the January wildfires, requesting a three-year extension beyond the existing one-year provision under state law. This demonstrates a multi-pronged approach to addressing the financial strain on affected communities.
The delegation to Sacramento also focused on securing continued state funding to bridge the gap between insurance payouts and the actual cost of rebuilding. This funding is crucial for ensuring that residents can fully recover and rebuild their homes and lives, particularly given reports of significant underpayment by insurance companies. A Federal Reserve study cited in reports indicates that California wildfire survivors are, on average, underpaid by $200,000-$300,000, highlighting the scale of the financial burden.
Addressing Insurance Industry Challenges
Beyond mortgage relief, Mayor Bass’s office is actively addressing issues with the insurance industry, which has been a major source of frustration for Palisades residents. Key concerns include the “adjuster shuffle” – where multiple adjusters are assigned to a single claim, leading to delays and inconsistent valuations – and the undervaluation of losses, with insurers often providing estimates significantly lower than actual rebuilding costs.
Another critical issue is the refusal of some insurers to cover the cost of testing for toxins, such as lead, in smoke-damaged homes. This leaves homeowners facing potential health risks and additional expenses. The Mayor’s office is advocating for reforms to address these practices and ensure that insurance companies are held accountable for providing fair and timely compensation to wildfire survivors.
Governor Gavin Newsom also announced an expansion of mortgage relief for survivors of qualified disasters, including the 2025 Los Angeles firestorms, making available up to $100,000 in mortgage assistance that does not need to be repaid and broadening income eligibility requirements.
The legislative efforts and advocacy from Mayor Bass and Assemblymember Harabedian represent a significant step towards providing much-needed relief to Los Angeles wildfire survivors. The bills now move through the legislative process, with the potential to offer a crucial lifeline to homeowners struggling to rebuild their lives. The next step will be the consideration and potential passage of AB 1847 and AB 1842 by the California State Legislature.
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