Southern California lawmakers Chu and Sherman introduced a bill in Congress that would provide a six-month pause on mortgage payments for homeowners affected by natural disasters, with the option to extend for an additional six months. The bill, inspired by a Pasadena Star-News report on missed mortgage payments after the Eaton and Palisades fires, aims to ease financial burdens for those who have lost their homes. The legislation would standardize forbearance policies for federal lenders, requiring them to grant a pause on payments for federally backed loans in areas with a federal disaster declaration. The bill has gained support from 11 Democrat co-sponsors and is hoped to receive bipartisan support.
The bill is based on a clause in the CARES Act, passed in response to the COVID-19 pandemic, which required lenders to grant forbearance requests for 180 days, with a possible extension of another 180 days. Chu and Sherman have also requested the Federal Housing Finance Agency to allow mortgage lenders to grant forbearances of up to two years after natural disasters to prevent unnecessary foreclosures and support community resilience.
The legislators hope the bill will provide relief to homeowners who are struggling to make mortgage payments while dealing with the aftermath of disasters. By standardizing forbearance policies for federal lenders, they aim to ensure that homeowners in disaster zones receive the support they need to navigate challenging circumstances.
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