California amended the Mortgage Forbearance Act (MFA). The MFA was enacted to allow a borrower to request forbearance on the borrower’s residential mortgage loan who is experiencing financial hardship directly due to the wildfire disaster related to the Eaton Wildfire, the Palisades Fire, and the Straight-line Winds (described in the proclamation of a state of emergency issued by Governor Gavin Newsom on January 7, 2025, or the federally declared disaster, declared on January 8, 2025). Under the bill, the following amendments were made:
- Added a requirement that the borrower affirm the property is uninhabitable when requesting the forbearance due to the wildfire disaster;
- Amended a requirement that a mortgage servicer offer mortgage payment forbearance of a period of up to an initial 90 days, which must be extended at the request of the borrower in 90-day increments, up to a maximum forbearance period of 24 months (previously, 12 months);
- Added an allowance for a mortgage servicer to request additional documentation from the borrower if certain circumstances apply;
- Amended the timeframe for notifying borrowers whether their request for forbearance has been approved by increasing the timeframe from 10 business days to 21 days (may be extended further if certain circumstances apply); and
- Added a requirement allowing the mortgage servicer to offer the option to defer repayment of forborne amounts to the end of the loan term through a loan deferral or comparable loss mitigation option, unless prohibited by terms of the applicable investor contract or servicing guidelines.
The bill becomes effective January 1, 2027.
Click to view the CA AB 1847: https://www.tenaco.com/wp-content/uploads/2026/09/CA-AB-1847-09-16-26.pdf
