Senators Adam Schiff of California and Michael Bennet of Colorado recently introduced the Mortgage Relief for Disaster Survivors Act, aiming to provide much-needed assistance to homeowners impacted by natural disasters. This legislation would only apply to borrowers with federally backed loans living in counties that have been declared a disaster area since January 1st. During the recovery, the bill would provide six months of mortgage relief to give these newfound displaced homeowners a foundation to work from.
The Mortgage Relief for Disaster Survivors Act would protect all borrowers from foreclosure and eviction during the relief period. It protects them from having to pay back any accrued interest or penalties. In addition, it provides eligible homeowners the opportunity to apply for up to two additional six-month extensions if they need more help. This provision is a recognition of the increased demand for relief, as communities continue to deal with the impacts of these catastrophic events.
Senator Bennet underscored the urgency of this bill, especially considering the level 3/4 2021 Marshall Fire that devastated Colorado. The loss of around 1,200 homes damaged or destroyed in the fire has put families in Boulder County at risk for financial hardship and insecurity. “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. Schiff.
The Eaton Fire destroyed much of what is now Sen. Schiff’s old congressional district in Southern California. It flattened just under 6,000 residences—and unfortunately resulted in at least 19 fatalities. This bill comes as a reaction to the growing frequency of natural disasters. Climate change is the main force behind this deadly trend. Sen. Schiff wrote, “it is paramount that we provide pathways to stability for homeowners who experience crises like these.”
Freddy Sayegh, a resident who has been impacted by recent homes shared his testimony on the economic burdens in the aftermath of these tragedies. “It actually placed a lot of pressure to come up with three months all at once,” he stated, underscoring the challenges many homeowners encounter in the wake of destruction. Furthermore, he noted, “There’s a lot of people who don’t have three months of savings,” emphasizing the importance of timely financial support.
Musician and activist Keni “Arts” Davis expressed his concerns about the cost of losing his home of almost 40 years. It could have spelled economic disaster,” he said, as he considered the impact losing this beloved home has had on his life machine that should be rewired. He further expressed skepticism about the timing of legislative efforts, saying, “My grandmother would have said it’s a day late and a dollar short.” His words echo a lot of people’s beliefs that more needs to be done right now for the people who are already being affected by disasters.
When it comes to climate, Texas is making an unmistakable statement that we need to act quickly and boldly. Just yesterday, Kerr County—a Texas republican stronghold—announced a 90-day foreclosure moratorium. Because of this moratorium, mortgage companies are prohibited from initiating or completing a foreclosure within the cities. This measure will provide much-needed relief for hard-pressed homeowners facing economic turmoil.
For example, in California, wildfire-related delinquencies reached a high of 4,100 in March before receding to 2,240 as of June. This decline follows a pattern typically observed after natural disasters, where initial spikes in delinquencies gradually decrease as recovery efforts progress.
The Mortgage Relief for Disaster Survivors Act moving through this legislative process would change that. Its potential impact on millions of affected homeowners to come has led to important discussions. The bill directly addresses mortgage relief and provides extensions. Its mission is to prevent the financial hardships that often come in the wake of these horrific acts.