Sunday, March 22, 2026

Fire Survivors Tell State Lawmaker Banks Denied Them Mortgage Relief Required by Law

Pasadena Assemblymember John Harabedian

At a Pasadena City College hearing, Eaton and Palisades fire victims pressed for stronger protections and longer forbearance

Wildfire survivors told a state Assembly committee meeting in Pasadena on Friday that mortgage companies delayed and denied relief they were legally owed, more than a year after a law authored by their own assemblymember required lenders to grant it.

The Outcomes Review Hearing on AB 238, the Mortgage Forbearance Act, was held at Pasadena City College and led by Assemblymember John Harabedian (D-Pasadena) and Assembly Banking and Finance Committee Chair Avelino Valencia (D-Anaheim). Survivors of the Eaton and Palisades fires described being stonewalled by mortgage servicers even after the law took effect. Harabedian responded by announcing AB 1847, a bill that would extend forbearance protections from 12 months to 36 months and strengthen penalties against lenders who do not comply, according to a press release from Harabedian’s office.

AB 238, which Governor Gavin Newsom signed in September 2025, requires mortgage servicers to offer up to 12 months of forbearance to homeowners whose properties were destroyed or rendered uninhabitable by the January 2025 Los Angeles wildfires. The law prohibits late fees, foreclosure proceedings, negative credit reporting, and lump-sum repayment demands. Servicers must respond to requests within 10 business days.

But survivors who testified Friday said the law’s protections often did not reach them.

“Too many of these companies have been obstructionist and unhelpful,” said Jonathan Weedman, an Eaton Fire survivor. “When you lose your home and everything in your life in a fire, you should be able to say that and have someone on the other end respond with, ‘Let me tell you how we can help.’ That has not been our experience.”

The hearing reviewed data showing that many homeowners were initially denied forbearance. More than 90 percent of those who filed complaints with the California Department of Financial Protection and Innovation had their cases resolved in their favor, according to testimony at the hearing. State data released in January showed the DFPI had received 233 mortgage forbearance complaints since the fires began, with 92 percent resolved for the consumer.

Carlos Valdivia, a Palisades Fire survivor, told the committee his forbearance had already ended. “I lost my home, which had been in my family for 6 years, in the Palisades Fire, and now I am at risk of financial ruin despite doing everything right as a borrower and policyholder,” Valdivia said. “Our only real path to relief is extending mortgage forbearance through AB 1847. The truth is, lenders will be made whole. We are simply asking for that same chance.”

Michael Bustamante, an Eaton Fire survivor, said the law came too late for him but urged lawmakers to expand it. “What we do know is this: you could be next,” Bustamante said. “Disaster will reach another community soon enough, and we have a responsibility to be ready.”

Harabedian, whose Assembly District 41 includes Pasadena and the unincorporated community of Altadena — where the Eaton Fire destroyed 9,414 structures and killed 19 people, according to Cal Fire — said the testimony confirmed what his office had been hearing from constituents.

“While some banks abided by the law in granting relief via the Mortgage Forbearance Act, many delayed and denied consumers the relief they are owed under the law,” Harabedian said in a statement released by his office. “That is why I have introduced AB 1847: Extending the Mortgage Forbearance Act that will grant an additional 2 years of relief for survivors and strengthen penalties against banks who break the law.”

Valencia said the hearing made the case for stronger oversight. “More than a year after the Eaton Fire, too many families are still waiting for stability while mortgage servicers fail to provide the relief AB 238 guarantees them,” Valencia said, according to the press release. “These are real people and they deserve better.”

Assembly Speaker Robert Rivas, who created the Outcomes Review program as a first-of-its-kind legislative oversight tool, praised the hearing. “Yesterday’s hearing is accountability in action — and I’m grateful for Assemblymember John Harabedian’s steadfast leadership on oversight and transparency,” Rivas said, according to the release.

The hearing was part of a broader Outcomes Review initiative launched by the Assembly in 2026 to evaluate whether enacted laws are delivering their intended results. Harabedian was one of 14 lawmakers selected to participate.

AB 1847 and AB 1842, a companion bill that would create a statewide mortgage forbearance program for future disasters, are scheduled to be heard in the Assembly Banking and Finance Committee in April.

Weedman said he hoped the legislation would produce real change. “My hope is that this legislation continues to move forward, is strengthened, and ensures the resources and mechanisms are in place so everyone has a fair chance to rebuild,” he said.

Homeowners experiencing difficulty with mortgage servicers can file complaints with the DFPI at dfpi.ca.gov or by calling 866-275-2677. Harabedian’s district office can be reached at 626-351-1917.

The first forbearance periods granted under AB 238 began expiring in late 2025. If AB 1847 passes, survivors would have until 2028 to rebuild without the threat of foreclosure.