Monday, August 4, 2025

Senate Bill Would Provide Mortgage Relief for Eaton Fire Victims

By ANDRÉ COLEMAN, Managing Editor

Altadena and Pasadena homeowners recovering from natural disasters could receive six months of mortgage relief under legislation introduced last week by two U.S. senators whose states have faced devastating wildfires and floods.

The Mortgage Relief for Disaster Survivors Act would cover federally backed loans in disaster-declared areas dating to Jan. 1.

During the six-month pause, interest and penalties would not accrue, and borrowers could apply for additional six-month extensions.

The devastating fire, which destroyed large swaths of Altadena and some homes in Pasadena, started nearly seven months ago and left thousands of people displaced.

“Earlier this year, we watched as families in Los Angeles were devastated by wildfires, and to date, many homeowners are still struggling to rebuild from this disaster,” said Sen. Adam Schiff (D-Pasadena), a co-sponsor of the bill.

“As natural disasters become more frequent due to climate change, it is critical that we pave a path to stability for homeowners in times of crisis.”

Parts of Schiff’s former Southern California district were destroyed in January when the Eaton Fire swept through Altadena, killing at least 19 people and destroying nearly 6,000 homes.

Co-sponsor Sen. Michael Bennet cited similar devastation in his state from the 2021 Marshall Fire, which destroyed more than 1,200 homes in Boulder County.

“Coloradans know all too well how difficult it is to pick up the pieces and move forward after catastrophic wildfires,” Bennet said.

“When mounting financial and emotional costs of recovery weigh on families, they should be able to take time to put their lives back together and rebuild their homes.”

A companion bill introduced earlier this year in the House would provide 180 days of mortgage relief for federally backed loans without late fees.

Nonfederal lenders are not required to participate, though after the Palisades and Eaton fires, more than 400 lenders voluntarily offered 90-day pauses without reporting missed payments to credit agencies.

Some survivors say that short-term relief still left them scrambling.

In Texas, where July flooding caused an estimated $240 million in damage, officials announced a 90-day foreclosure moratorium in Kerr County, the area hardest hit.

Nationally, mortgage delinquencies spiked in March to nearly double the rate from a year earlier, according to the Mortgage Bankers Association.

In California, wildfire-related delinquencies peaked at 4,100 that month before falling to 2,240 in June, data from ICE Mortgage Technology show.