Understanding the California Mortgage Deferment Act

The California Mortgage Deferment Act (AB 238) offers critical support to homeowners affected by the wildfires in Los Angeles, Ventura, and surrounding counties. Signed into law in early 2025, this legislation ensures that families who have lost homes or faced financial hardship due to natural disasters can find immediate mortgage relief.

At LBC Mortgage, we understand how overwhelming recovery can be. That’s why we stay current on important legal developments like AB 238, so we can offer expert guidance and practical solutions when our clients need them most.

Key Provisions of the Act

AB 238 allows eligible borrowers to pause mortgage payments for up to 360 days. Relief comes in two 180-day increments. Homeowners only need to submit a simple attestation confirming financial hardship related to the wildfire disaster. No excessive documentation is required.

During the forbearance period, lenders are prohibited from charging late fees, penalties, or additional interest. More importantly, foreclosure actions and evictions are suspended, offering vital breathing room for affected homeowners.

Who Qualifies for Mortgage Relief

Eligibility for the California Mortgage Deferment Act is straightforward but specific. Understanding these criteria ensures homeowners access the help they deserve.

Eligibility Requirements

Borrowers must have residential mortgage loans secured by properties with one to four units. Both owner-occupied homes and small rental properties qualify. The borrower must confirm that their financial hardship directly stems from the wildfire disaster declared by Governor Gavin Newsom on January 7, 2025.

At LBC Mortgage, we assist clients in verifying their eligibility and preparing the necessary attestations to simplify and speed up the relief process.

How Financial Institutions Are Cooperating

In addition to AB 238, more than 270 financial institutions, including banks, credit unions, and mortgage lenders, have voluntarily committed to offering relief.

Details of Institutional Support

Participating institutions provide at least 90 days of mortgage payment deferrals. They waive late fees and penalties during the deferment period and ensure that these relief efforts do not negatively affect borrowers’ credit scores.

This cooperation reflects a broad commitment to rebuilding communities after disaster. LBC Mortgage has strong partnerships with many of these institutions, helping us advocate effectively for our clients.

Why LBC Mortgage is Your Trusted Partner

At LBC Mortgage, we pride ourselves on delivering exceptional service in times of need. When disaster strikes, personalized support becomes more crucial than ever.

Expert Guidance Every Step of the Way

We educate our clients about the full benefits of the California Mortgage Deferment Act. Our experienced team offers clear instructions on submitting the hardship attestation and understanding all aspects of forbearance.

We also help homeowners plan for the future, including discussing repayment options when the deferment period ends. Our goal is to minimize stress and maximize stability during uncertain times.

Close Collaboration with Lenders

Navigating mortgage deferment often involves multiple conversations with lenders. We step in to handle these negotiations, ensuring that the process is as simple and fast as possible for our clients.

Thanks to our strong industry relationships, we are able to cut through red tape and advocate for the best outcomes on behalf of those we serve.

What Happens After the Forbearance Period Ends

Understanding the next steps after mortgage deferment is critical for financial planning. LBC Mortgage ensures our clients are fully prepared for the road ahead.

Repayment Options Post-Deferment

Once the forbearance period ends, lenders typically offer several repayment options, including:

  • Full repayment of deferred amounts
  • A structured repayment plan added to regular mortgage payments
  • A loan modification to adjust the mortgage terms

Every borrower’s situation is unique. We work with clients and their lenders to identify the most manageable option based on financial circumstances.

Avoiding Foreclosure Risks

By staying proactive and informed, borrowers can avoid foreclosure risks even after the deferment period. We ensure our clients know exactly what steps to take and when, keeping them secure in their homes as they continue to rebuild their lives.

Additional Resources Available to Homeowners

Mortgage deferment is just one tool available to wildfire victims. Many state and federal programs offer additional financial assistance.

FEMA and State Recovery Assistance

Homeowners may qualify for grants or low-interest loans through FEMA or the California Office of Emergency Services. These funds can help repair or rebuild homes, cover temporary housing costs, or replace essential belongings lost to fire.

We guide our clients toward trusted resources and help them understand how different aid programs can work together to promote full recovery.

How to Apply for Mortgage Relief Through LBC Mortgage

Navigating disaster recovery alone can be overwhelming. LBC Mortgage stands ready to help clients access critical relief through the California Mortgage Deferment Act and beyond.

Our Simple, Supportive Process

We begin with a thorough consultation to review each client’s unique situation. Then, we assist in preparing the hardship attestation and submitting necessary paperwork to lenders. Our experienced team ensures that every step is completed properly to avoid delays or denials.

We also maintain ongoing communication throughout the forbearance period, answering questions and helping clients prepare for repayment well before the deferment ends.

Why Acting Quickly Matters

Time is of the essence when accessing wildfire relief. The sooner homeowners apply for mortgage deferment, the sooner they can secure protection from late fees, penalties, and foreclosure proceedings.

At LBC Mortgage, we encourage anyone impacted by California wildfires to reach out as soon as possible. We are ready to offer the expert, compassionate support needed to move forward with confidence.

Contact LBC Mortgage Today

If you’ve been affected by the recent California wildfires, don’t wait to get help. Contact LBC Mortgage today to learn more about your options under the California Mortgage Deferment Act. Our dedicated team is here to guide you through every step, ensuring you receive the relief you deserve.

We are committed to standing with our clients in times of need, providing not just mortgage expertise, but hope and a path forward.