CA AB238

Allows borrowers experiencing financial hardship due to the January 2025 California wildfires (Eaton, Palisades, and Straight-line Winds) to request forbearance on residential mortgage loans secured by properties with 4 or fewer units

Requires mortgage servicers to offer up to 90 days of initial forbearance, extendable in 90-day increments up to a maximum of 12 months upon borrower request

Prohibits mortgage servicers from assessing late fees, charging default interest rates, or initiating foreclosure proceedings during the forbearance period

Mandates credit reporting compliance where servicers must report accounts as current (or maintain pre-existing delinquency status) rather than indicating payments are in forbearance

Requires the Department of Financial Protection and Innovation to post disaster forbearance resources and a dedicated assistance phone number on its website; borrowers must submit requests by January 7, 2027, or 6 months after the state of emergency ends, whichever is earlier