California Governor Gavin Newsom has proposed a significant mortgage relief package aimed at assisting victims of recent natural disasters, particularly the devastating wildfires that swept through Los Angeles County last month. Announced on Wednesday, the plan seeks to allocate over $100 million in direct aid to homeowners at risk of foreclosure, along with an additional $25 million dedicated to mortgage counseling and support services.
The proposed relief package is designed to help those affected by the wildfires, which destroyed or severely damaged more than 12,000 homes in the area. Many homeowners are facing the dual burden of paying mortgages on properties that have been rendered uninhabitable, while also incurring costs for temporary housing. Insurance payouts may not cover these expenses adequately, especially for those who were underinsured, leaving many families in precarious financial situations.
Funding for the relief initiative would come from a mortgage settlement reached by former California Attorney General Kamala Harris with major lenders following the Great Recession. This means that the funds would not impact the state budget. The California Housing Finance Agency will oversee the distribution of these funds, and its board is scheduled to discuss the proposal in an upcoming meeting.
To qualify for the mortgage relief, homeowners must have experienced damage to their property due to a declared emergency since January 1, 2023. Newsom emphasized the importance of this program, stating, “As survivors heal from the trauma of recent disasters, the threat of foreclosure should be the last thing on their minds. This disaster mortgage relief program would help lift this burden and give families more time to focus on recovery.”
In the interim, some temporary relief measures have already been implemented. Newsom previously announced agreements with several major banks and state-chartered lenders, allowing fire victims to pause their mortgage payments for 90 days. Additionally, a bill currently under consideration in the state Legislature would permit individuals facing fire-related financial hardships to delay up to a year’s worth of mortgage payments.
The urgency of these measures is underscored by the scale of the recent wildfires and their impact on communities throughout Los Angeles County. As families grapple with the aftermath, the proposed relief package aims to provide critical support during a challenging recovery period.