Los Angeles Mayor Karen Bass urged lenders and mortgage servicers to offer extended mortgage forbearance to residents still recovering from the January 2025 Los Angeles wildfires that claimed at least 30 lives, destroyed over 16,000 structures, and scorched nearly 60,000 acres.
Following the fires, mortgage delinquencies surged from about 700 to over 4,100 in one month. Bass is now requesting an additional three years of relief past the one-year requirement in state law.
While homeowners are currently benefiting from limited mortgage forbearance as they recover, that support will expire for the majority of families in the near future. With Bass’ plan, they would have four years of mortgage relief in total.
“Mortgage forbearance creates temporary breathing room,” CPA and attorney Chad D. Cummings of Cummings & Cummings Law tells Realtor.com®.
But it’s not “free money.”
“I describe mortgage forbearance as a legally sanctioned delay of required monthly payments, not a forgiveness of principal or interest,” says Cummings.
The years of loan relief would be added to the back of a homeowner’s current mortgage, under Bass’ proposal. During the three-year reprieve, homeowners wouldn’t be charged any additional fees or penalties, and this relief wouldn’t negatively impact their credit.
“With rebuilding underway across the Palisades and Los Angeles County, many impacted residents remain in temporary housing and face mounting financial strain,” said Bass in a Tuesday press release.
“These families are already carrying more than anyone should have to. They’re piecing life together while having to negotiate with contractors and wait for insurance claims to come through. Asking them to shoulder mortgage payments on top of all that would force them into an impossible—and unacceptable—choice.”
Many local real estate agents are in favor of the mayor’s proposal.
“Given all the red tape and difficulty wildfire victims have had trying to rebuild, I think extending mortgage relief for the next three years is a must,” Cara Ameer, a real estate agent with Coldwell Banker in California, tells Realtor.com.
“Many people have been caught in a tangled web with insurance companies who have been resistant to do the right thing all while still paying on a home that is no longer there or they can’t occupy. Having additional time will allow people to get all sorted out and hopefully receive compensation they were entitled to.”
Current relief efforts
Under California’s Assembly Bill 238, dubbed the Mortgage Forbearance Act, homeowners whose properties were destroyed or rendered uninhabitable by the fires are allowed to pause mortgage payments without late fees, penalties or risk of foreclosure for up to one year.
Bass stressed that extended assistance is crucial for long-term recovery.
“AB 238 is an important start, but one year simply isn’t enough,” Bass stated. “Families need more time to truly rebuild. We are urging our banking partners to join us in delivering meaningful relief at this critical moment.”
Many survivors still displaced
A survey conducted in September by the Department of Angels, a fire recovery organization, found that 9 out of 10 Pacific Palisades residents and 8 in 10 Altadena residents have remained displaced.
The group, which surveyed more than 2,300 people affected by the fires, also found that 75% of people in the Palisades and 67% in Altadena were living in temporary housing.
“AccuWeather experts preliminarily estimate total damage and economic loss between $250 billion to $275 billion, which is as staggering as it is sobering due to one of the most destructive fires in modern U.S. history,” AccuWeather chief meteorologist Jonathan Porter tells Realtor.com.
Next steps
Bass says she has already begun having preliminary discussions with the banking industry and vows to continue working to secure mortgage relief for wildlife survivors.
“I am encouraged that our partners in banking and business will recognize that this is the fair and compassionate solution our community needs,” said Bass. “We’ve seen extended relief work in the past—and we know it can work here.”
Merie Yousef, who led real-time wildfire response mobilization across 40+ FirstTeam real estate offices in California, agrees.
“Extending mortgage forbearance would provide the breathing room families need to make long-term decisions rather than crisis-driven ones, preventing foreclosures, stabilizing neighborhoods, and giving communities space to rebuild with dignity,” she tells Realtor.com.
“If California is serious about climate-driven disaster recovery, extended mortgage relief must become part of our core response toolkit.”