California Mortgage Relief Act

Borrowers whose homes become uninhabitable in a federally declared disaster can pause payments without late fees, default interest, foreclosure action, or a forbearance mark on their credit report.

What the law does ​

• Requires covered mortgage servicers to offer eligible borrowers an initial 180-day forbearance, extendable in 90-day increments up to 12 months.
• Lets borrowers establish uninhabitability through a verbal or written affirmation, without other supporting documentation.
• Requires servicers to respond within 10 business days, identify request defects, and allow 21 days to correct them.
• Bars late fees, default-rate interest, foreclosure proceedings, foreclosure sales, and foreclosure-related evictions while a borrower complies with forbearance terms.
• Requires servicers to report disaster-forbearance accounts as current and not report that payments are in forbearance during the relief period.
• Requires disclosure that paused payments must be repaid and, where contractually authorized, at least one post-forbearance option that avoids a lump-sum repayment or higher monthly principal-and-interest payment.
• Authorizes enforcement suits by the Attorney General, district attorneys, and county counsel.
• Requires the Department of Financial Protection and Innovation to post disaster-forbearance guidance, program links, and a borrower-assistance phone number.

Who it affects ​

• Borrowers with mortgages on one-to-four-unit residential properties made uninhabitable by a federally declared disaster.
• Banks, mortgage lenders, and mortgage servicers covered by California or federal oversight.
• Borrowers already more than 90 days delinquent before the disaster, borrowers with an unrescinded pre-disaster notice of default, and borrowers who surrendered the property are excluded.

Context ​

Servicers are excused where the requirements cannot be reconciled with applicable investor or federally backed-loan servicing rules.