Published by CNBC Business | July 31, 2025
The Mortgage Relief for Disaster Survivors Act would apply to homeowners with federally backed loans in areas declared disasters since Jan. 1
Natural disaster survivors would be eligible for six months of mortgage relief under a bill introduced Thursday by two senators whose states have been ravaged by wildfires and floods.
The Mortgage Relief for Disaster Survivors Act would apply to homeowners with federally backed loans in areas declared disasters since Jan. 1 without accumulating interest or penalties during the six-month period. Borrowers could apply for additional six-month extensions.
“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. Adam Schiff, D-Calif., who is co-sponsoring the bill.
“As natural disasters become more frequent due to climate change, it is critical that we pave a path to stability for homeowners in times of crisis,” he added.
Parts of Schiff’s former congressional district in Southern California were devoured in January when the Eaton Fire tore through Altadena, destroying nearly 6,000 homes and killing at least 19 people.
His co-sponsor is Sen. Michael Bennet, D-Colo., whose state was ravaged by the 2021 Marshall Fire, which damaged or destroyed some 1,200 homes in Boulder County.
“Coloradans know all too well how difficult it is to pick up the pieces and move forward after catastrophic wildfires,” Bennet said. “When mounting financial and emotional costs of recovery weigh on families, they should be able to take time to put their lives back together and rebuild their homes.”
House members who represent Altadena, Pacific Palisades and Malibu in California introduced a companion bill this year that would provide 180 days of mortgage relief without penalties or late fees. The pause would apply only to federally backed loans.
Nonfederal lenders are not required to offer payment reprieves to homeowners in disaster zones. But after the Palisades and Eaton fires, more than 400 lenders agreed to a 90-day pause without reporting the missed payments to credit agencies.
In Texas, where cataclysmic flooding that began July 2 caused an estimated $240 million in damage, officials announced a 90-day foreclosure moratorium that prohibits mortgage companies from initiating or completing foreclosures in Kerr County, the area hardest hit by the disaster.
According to the Mortgage Bankers Association, delinquencies nearly doubled nationally in March compared with the same time last year, up 21% from 12%.
In California, wildfire-related delinquencies peaked in March at 4,100 and fell to 2,240 in June, according to the data tracking company ICE Mortgage Technology.
The trend follows a pattern seen after other natural disasters, in which delinquencies spike in the months immediately following catastrophes and gradually level out over the next 18 to 24 months, said Andy Walden, head of mortgage and housing market research at Intercontinental Exchange, the parent company of ICE Mortgage Technology.
