An act to add Title 19.2 (commencing with Section 3273.31) to Part 4 of Division 3 of the Civil Code, relating to emergency relief.
AB 1842 would create the California Emergency Mortgage Relief Act, a new Civil Code title governing mortgage forbearance when a residential unit becomes uninhabitable because of a state or federally declared emergency. The bill allows an eligible borrower to request forbearance within six months of the emergency declaration by affirming that the unit is uninhabitable as a direct result of the emergency. Mortgage servicers would then be required to offer an initial 180-day forbearance, extendable in 90-day increments up to 12 months total, and to provide timely notice, repayment information, and an explanation if a request is denied or has curable defects.
The bill also limits lender and servicer actions during the forbearance period. It prohibits late fees and default interest, bars foreclosure actions and foreclosure-related evictions while the borrower is complying with the plan, and restricts transfer or reassignment of the loan without borrower consent. It further requires servicers to report accounts in a manner consistent with the federal Fair Credit Reporting Act, generally preventing reporting that the account is in forbearance and requiring the account to be reported as current or delinquent depending on the borrower’s status before relief began. The Department of Financial Protection and Innovation would also have new reporting and consumer-information duties, including collecting aggregate data on requests and publishing guidance for borrowers.
In state-law terms, the bill adds a new set of borrower protections to the Civil Code and creates enforcement mechanisms through private civil actions and actions by the Attorney General, district attorneys, or county counsels. It also includes exemptions where compliance would conflict with federal or investor servicing guidelines, especially for federally backed loans, and states that it does not require a servicer to breach an existing investor contract. The bill notes that it expands the crime of perjury because borrowers must affirm uninhabitability, and it declares that no state reimbursement is required for local agencies.
The overall sentiment reflected in the voting history is strongly supportive. The bill advanced out of committee with unanimous or near-unanimous support in the recorded votes, including a 13-0 committee vote on the most recent action and earlier votes of 7-0 and 9-2. No committee transcript was provided, so there is no recorded debate to show detailed arguments, but the vote pattern suggests broad agreement on the need for emergency mortgage relief.
The main points of contention appear to be practical and legal rather than ideological: how the new state requirements interact with federal servicing rules, investor contracts, and existing mortgage servicing authority. The bill tries to address those issues with conflict-of-law exemptions and by limiting its reach to emergency-related forbearance, but those same carveouts may be where implementation questions arise for lenders, servicers, and regulators. Borrowers, housing advocates, mortgage servicers, investors, and the Department of Financial Protection and Innovation are the primary affected parties.
AB 1842 would add Title 19.2 to the Civil Code and create a new emergency mortgage forbearance framework for residential mortgage loans secured by homes that become uninhabitable due to a declared emergency. It would impose duties on mortgage servicers to grant forbearance, provide notices, suspend certain fees and foreclosure activity, report account status in specified ways, and maintain aggregate reporting to the Department of Financial Protection and Innovation. It would also create enforcement rights through civil actions and authorize public-agency enforcement, while preserving existing investor and federal servicing conflicts through express exemptions.
The available voting history indicates strong bipartisan or at least broad committee support for the bill, with unanimous or near-unanimous votes at each recorded stage and no recorded opposition in the most recent committee action. Because no committee transcript was provided, there is no direct evidence of floor or committee debate, but the procedural history suggests the bill was viewed favorably as a consumer-protection and disaster-relief measure.
The likely areas of contention are not whether emergency relief should exist, but how far California can go in regulating mortgage servicing without conflicting with federal law, investor contracts, or servicing guidelines. The bill expressly limits liability where compliance would be impossible under applicable federal or investor rules, and it excludes borrowers who were already seriously delinquent or in default before the emergency. Those carveouts suggest concern from lenders and servicers about operational burden, contract compliance, and credit-reporting obligations, while borrower advocates would likely focus on the need for stronger protections and clearer access to relief after disasters.