South California legislators who represent Eaton and Palisades’ fire areas presented a bill on Thursday to the congress which would give the owners affected by natural disasters at the national level a break on mortgage payments for almost a year.
The bill, presented by American representatives Judy Chu (D-Monterey Park) and Brad Sherman (D-Sherman Oaks), would oblige lenders to give a six-month break on mortgage payments for owners who could document evidence of damage or destruction to their properties. Payments would be interrupted without interest, penalties or costs, but would not be forgiven.
This break, known as the mortgage, would only apply to loans supported by the federal government in areas where a federal declaration in the event of a disaster was signed by the president, said CHU, who represents Altadena. Borrowers would have the possibility of extending abstention for an additional six months if necessary, extending the duration of the loan.
“They have lost their house, all their lives, they live with friends or live in a hotel, they still work with their insurance company to obtain this covered hotel bill, or they apply to FEMA, and now the mortgage is also due,” said Sherman, whose district includes Pacific Palisades and Malibu. “It is therefore like paying rent or mortgage twice. Some of them find it quite difficult.”
Non -federal lenders are not obliged by law to offer abstention to owners in disaster areas, although they often do it. The CHU office said that the bill would standardize abstention policies for federal lenders.
After the fires of January, which destroyed more than 13,500 buildings in Altadena, Pacific Palisades and Malibu, more than 400 lenders offered the owners a 90 -day break on mortgage payments without reporting missed payments to credit agencies.
People who have survived the fire, said CHU: “should not have to worry about missing a mortgage payment when they care to deal with so many other things.”
The bill has 11 other co-sponsors, all the Democrats, including representatives of southern California Laura Friedman (D-Glendale), Jimmy Gomez (D-Los Angeles), Linda T. Sánchez (D-Whittier) and Lou Correa (D-Santa Ana), as well as several representatives of the United States, notably Hawaii rep.
No republican legislator has signed as original co-sponsors, but CHU and Sherman said they hoped that the bill will receive bipartite support.
“It’s the smallest thing they could do,” said Sherman. “It is practically no cost for anyone.”
CHU said the bill had been partly inspired by a story that it has read in the Pasadena Star-News noting that up to 3,200 Eaton Fire and Palisades fire survivors lacked mortgage payments after January fires.
History cited a report by an insurance company which found that the mortgage payments in time in the fire zone of Palisades had dropped from 23.9% from December to February and 16.7% in the Eaton fire zone. Time payments increased by 0.2% throughout the state during the same period.
CHU said that the disaster bill is structured after the mortgage clause included in the Cares Act, the pandemic economic recovery bill of $ 2 billion which adopted the congress with bipartite support and was promulgated by President Trump in March 2020.
The CARES Act required lenders to grant requests to abstention on monthly mortgage payments for 180 days, with a possible extension of 180 other days.
Last month, CHU and Sherman also asked the Federal Housing Finance Agency, which regulates the mortgage giants Fannie MAE and Freddie Mac, to allow mortgage lenders to grant counts up to two years, by six -month increments, after natural disasters.
The current limit of one year, wrote the legislators: “does not take into account the prolonged disturbances which the owners are confronted after a catastrophe of this magnitude. Allowing a longer period with fewer administrative obstacles would help prevent unnecessary seizures, preserving property and supporting the community hemition. ”
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