Assembly Standing Committee on Banking and Finance

Good afternoon. The assembly banking and committee is now called to order. Sergeants, please call the absent members. We do have a quorum. Madam secretary, please call the roll.

[Roll Call]

Thank you. A couple of logistical items. We accept written testimony through the position letter portal on the committee's website. In order to hear as much public testimony as time allows, we will not permit conduct that disrupts, disturbs, or otherwise impedes the orderly conduct of these proceedings. We will not accept disruptive behavior or any behavior that incites or threatens violence.

Since we do have a quorum, we will now begin with the agenda. And we will begin with item one, AB 2123, our majority leader, Aguiar Curry. The recommendation is do passed to the committee on appropriations. When you're ready, please begin with your statement.

Good afternoon. Thank you, mister chair and members. Medical debt is a widespread issue in California affecting nearly 40% of our constituents. Even people with insurance struggle to pay off their health care bills. High deductibles, cost sharing, and claim denials can leave patients with thousands of dollars in unexpected charges.

When this debt goes to collections, it can damage credit for years, making it harder to secure housing, employment, or loans. Oh, boy. Just wait a minute here. See, as a result, many Californians go without necessary care and struggle to afford basic resources. Some local governments have stepped in to address this crisis.

In 2024, Los Angeles County launched a pilot program that erased 363,000,000 in medical debt with just a $5,000,000 investment. They did this by purchasing medical debt on the secondary market for pennies on the dollar, making the program highly cost effective. AB 2123 builds on the proven model by creating a statewide medical debt relief program. This program will purchase and cancel qualifying medical debt for low and middle income Californians.

It will prioritize those earning up to 400% of the federal poverty level or those with high debt burdens relative to their income.

By relieving medical debt, this bill will help millions of Californians regain financial stability across the state. Thank you, and I respectfully ask for your aye vote. With me today, I have California State Treasurer, Fiona Ma.

Thank you. Thank you, members chair. I am the chair of the California Hospital Facilities Finance Authority, which distributes all of the children hospital loan bond loan proceeds, as well as funds and finances, hospitals, emergency crisis, beds, and community clinics. Twenty six percent of households across the country are experiencing medical debt. The group most burdened by medical debt are people between the ages of 50 to 64, and many of these are in the sandwich generation.

Those that have families taking care of kids as well as older, family members that they are also caring for. In California, there are approximately 1,450 debt collectors profit profiting from this debt. This bill would invest $2,500,000 from the general fund to relieve medical debt for millions of Californians. Other states are also embarking on these programs, including Rhode Island, Vermont, Connecticut, New Jersey, and Illinois. And just one example, we have two people here who are

have their own stories. But in California, Sierra had a rare genetic disorder that made her prone to aneurysms and has sent her to the hospital repeatedly. Over the next eighteen months, she racked up more than $4,000,000 in medical bills. So she would definitely be a a person who would qualify for medical debt relief under this bill.

Do you wanna come up? Yeah.

my witnesses quick, Mike.

Thank you. Have one of

Absolutely. Please welcome. You have two minutes. Thank you.

Thank you Very much.

Good afternoon. Thank you. My name is Tammy Pangelina, and I'm here today as a caregiver and as an aunt who lost my nephew, Daniel, at the young age of 35. Daniel was diagnosed with stage four colon cancer at 27 years old. During his illness, I helped care for him in our home and helped him through treatment.

While he was in the middle of that fight, Daniel lost his employee employer sponsored insurance after going on disability. He then had to transition to Medi Cal. During that transition, there was a period of uncertainty and directly affected how he thought about his care. He began asking questions like, can I afford to continue my care? Do I need to buy groceries or medicine?

Do I need to take out a loan? Instead of focusing solely on fighting his cancer, he was forced to weigh financial risk against medical need. That uncertainty changed the way he made decisions. It introduced hesitation at moments when time and clarity were critical. No patient should ever have to second guess treatment because they are worried about cost or coverage.

No patient should have to go through that. Although Daniel was eventually able to enroll in Medicare in continuous care, the gap created stress and fear that never should have been part of his experience. And before that transition, Daniel had already accumulated so much medical cost. That didn't that debt didn't just exist on paper. It influenced how he viewed his options and his future.

It was something he carried with him even as he was fighting for his life. The debt remained unresolved at the time of his passing. What I saw firsthand is that medical debt and coverage gaps don't just impact finances. They shape decisions. They affect how patients think, plan, and whether they feel secure enough to continue their care.

Daniel deserved to focus on his treatment and time with his family, not whether he could afford to keep going. That's why policies like AB 2123 are so very important. This is about reducing the financial pressure that interferes with care. Excuse me. And ensuring that patients can make decision based on what they need, not what they can afford.

I'm sharing Daniel's story so other families don't have to face the same uncertainty during the most critical moments of their lives. Thank you so much for the opportunity to share Daniel's story.

Thank you.

Are there any additional supporters in the room? If so, please come up to the mic. State your name, organization, and position. Motion. Second. Yep. Motion and a second. Thank you.

Thank you, chair. My name is doctor Spencer Dayton. I'm the chair of the patient advisory board for the California Colorectal Cancer Coalition. I'm not here as a public health expert in my daily job. I'm a

Please, Nate. Just position.

Oh, okay.

Name. And

Yeah. I'm supporting Spencer Dayton for it.

Thank you. Seeing no additional support, we will now move on to opposition. Is there any opposition in the room? Seeing none, we do have a motion and a second. Are there any questions or comments from committee members?

Seeing none, madam majority leader, would you like to close?

Yes. I first of all, I'd like to thank treasurer Ma for helping and bringing this bill forward in our our witness today. People are in debt, and we need to help them out in these really trying times. And I respectfully ask for your aye vote.

Thank you. Absolutely. And my hope is that this is a small step in helping those that need it the most during this time. And with the potential cuts coming from the Federal Government when it comes to health care, this issue is only gonna be augmented across the state. So with that, very much appreciate this bill.

And madam secretary, call the roll.

[Roll Call]

Thank you. That bill is out. We will hold the roll open perhaps and members.

Great. Thank you very much.

The next item on the agenda is AB 1726, Assemblymember Calderon. The recommendation is do passed to the committee on rev and tax with amendments to be taken there.

Thank you.

Thank you. Committee members, Miss Calderon, when you are ready, please begin.

Thank you, Mister chair and members. I'd like to thank the committee, and I will be accepting the amendments. Assembly Bill 1726 allows California homeowners to establish a catastrophe savings account to help improve natural disaster resiliency. The threat of wildfires continues to increase as our climate continues to change. Unfortunately, wildfire is not the only natural disaster that threatens our state.

California is extremely prone to earthquakes and flooding. A catastrophe savings account would empower a homeowner to prepare for these disasters by allowing them to contribute pre tax dollars at their local bank or credit union. Furthermore, interest accrued on these accounts would be tax exempt. Qualified expenses from these accounts include home hardening, insurance deductibles, and other recovery costs following a wildfire, flood, or earthquake declared in a state of emergency. This bill seeks to provide Californians a new tool to protect their homes and accelerate their recovery.

Here with me in support is Claudia Mildner from the California Department of Insurance and Chris Schultz from the California Bankers Association.

Thank you. And when ready, please begin. You have two minutes.

Thank you. Good afternoon, Chair Valencia and members of the committee. My name is Claudia Mildner, Assistant Chief Deputy Legislative Director at the California Department of Insurance under the leadership of Commissioner Ricardo Lara. With me today is Amanda Jimenez, Climate Resilience Analyst in our climate sustainability branch at the department to answer any technical questions you may have.

As the proud sponsor of AB 1726, Insurance Commissioner Laura thanks Assemblymember Calderon for her leadership in authoring this important measure, which allows individuals to establish state income free tax savings accounts for qualified catastrophe expenses, including insurance deductibles, uncovered losses, and mitigation efforts.

California, like many states is facing more frequent severe disasters, including wildfires, floods, and earthquakes. The financial consequences of these disasters have lasting effects on household and communities statewide. While insurance remains an essential safeguard, rising premiums and deductibles and growing out of pocket costs are making recovery more difficult and less predictable for many Californians.

California's catastrophe savings accounts will function similarly to health savings accounts and retirement plans, encouraging individuals to prepare for future needs through state tax incentives while maintaining guardrails to ensure that the funds are spent on qualified disaster related expenses. These accounts would also provide a way for homeowners to cover higher deductibles and other out of pocket losses that are not fully covered by insurance.

Use of these types of accounts is supported by the National Conference of Insurance Legislators and has already been adopted in a few other states such as Mississippi, Alabama, and South Carolina. The department's safer from wildfires regulations have been in place since 2022 and require insurance companies to provide discounts for specific mitigation actions.

This bill reinforces this approach by allowing catastrophe savings accounts to cover the cost of these mitigation measures, giving homeowners a way to take proactive steps that improve their insurability while also lowering their wildfire risk. In closing, AB 1726 helps encourage personal financial resilience, increases the likelihood of completion of pre disaster mitigation work, and it supports faster consumer recovery after a catastrophe.

It's another tool to help make mitigation more accessible and financially achievable and helps homeowners take real steps to reduce their personal wildfire risk.

On behalf of Insurance Commissioner Ricardo Lara, I respectfully ask for your aye vote. Thank you.

Thank you.

Thanks so much, Chris Schultz with the California Bankers Association. The recent wildfires remind us that many homeowners remain underinsured. Health saving or I'm sorry. Catastrophe savings accounts are also applicable to earthquake mitigation and catastrophes.

This is these catastrophe savings accounts are another tool in the toolbox to help homeowners plan ahead.

We encourage your support of the measure.

Thank you. Are there any additional witnesses in the room in support? Please walk up to the mic, state your name, organization, and position.

Good afternoon. Amy Garrett with California Association of Realtors in strong support of the measure.

Thank you.

Good afternoon. Shari McHugh representing the Pacific Association of Domestic Insurance Companies in support of the bill. Thank you.

Thank you. Is there any opposition in the room? Seeing none, we do have a motion and a second. Are there any questions or comments from committee members? Perfect.

Thank you. Just would like to just share and acknowledge the incredible work that you have done on insurance issues. Your leadership is noted, and very much appreciate the continued work on this specific item as well. Hopefully, we get to the finish line this go around. With that, would you like to close?

Thank you, Mister chair. I respectfully ask for an aye vote.

Thank you. Madam secretary, please call the roll.

AB 1726 Calderon. The motion is do passed to the committee on revenue and taxation. Valencia?

Yes.

Valencia, Aye. Chin? Dixon?

Aye.

Dixon, Aye. Fong?

Aye.

Fong, Aye. Krell?

Aye.

Krell, Aye. Michelle Rodriguez? Blanca Rubio?

Blanca Rubio, Aye. Schiavo? Soria?

Aye.

Aye.

Soria, aye.

The bill is out. Thank you.

Thank you.

We will now move on to the next agenda item, AB 1793. And with Mister Ward being absent today, we do have a substitute to present the bill. Please step forward and begin when ready. The recommendation is do passed to the committee on appropriations. Welcome.

Good afternoon, Chair Valencia and members. Excuse me. My name is Barbara Sanford. And on behalf of Assembly member Ward, I thank you for this opportunity to present AB 1793, the California Common Sense Act. AB 1793 would legalize the symmetrical rounding of cash transactions to the nearest nickel.

In 2025, the US Mint ceased production of the penny, a coin first minted in the year 1793. Already, California businesses are experiencing penny shortages, leading to confusion and inconsistency at the cash register. Following the same model successfully used in Canada since 2013, a number of US states have enacted policies of symmetrical rounding, where each where cash transactions ending in the number one, two, six, or seven are rounded down to the nearest 5¢ increment, while those ending in three, four, eight, or nine are rounded up.

Symmetrical rounding will only take place after the application of taxes and fees. Electronic or credit card transactions will be unaffected.

In the absence of clear federal guidance, this bill aims to ensure a smooth and transparent transition for consumers and businesses alike. Here as a witness is Taylor Trifo on behalf of the California Grocers Association.

Welcome. You have two minutes.

Thank you, Mister Chair members. Taylor Trifo on behalf of the grocers. Happy to support 1793 and thank you so much to Miss Sanford for her work on this along with Mister Ward. Following the halt of the production, the shortage of the penny and to Miss Sanford's point, the lack of federal guidance, grocers and other retailers are navigating inconsistent and unclear rounding practices at the register. And with food prices at near an all time high, we know that even pennies count.

1793 provides a simple uniform solution by enabling symmetric rounding, to the nearest nickel. This ensures consistency and clarity for grocers and consumers, preventing, systematic advantages for either the grocer or the customer. For grocers operating on thin margins and high transaction volumes, standardization is critical. 1793 will reduce confusion at the checkout, improve efficiency, and build trust during a time of transition in our currency. This is a common sense framework in a post penny future and we request an aye vote. Thank you.

Thank you.

Move the bill.

We have a motion and a second. Are there any additional witnesses in the room? If so, please state your name, organization, and position at the mic.

Ryan Allain on behalf of the California Retailers Association to provide my 2¢ in support of this bill. Thank you.

Thank you. Are there any witnesses in opposition? If so, please approach. Seeing no opposition, are there any questions or comments from committee members? Seeing none, wanna extend my gratitude to Assembly member Ward for bringing this bill forward.

My family has a small business background, and we actually owned a grocery store for many years. So, this would have been a timely bill then, but more so now, specifically due to the changes in the financial sector. And with that, I look forward to this bill being signed into law. Madam secretary, please call the roll.

AB 1793, Ward. The motion is do passed to the committee on appropriations. Valencia?

Yes.

Valencia, aye. Chin? Dixon?

Aye.

Dixon, aye. Fong?

Aye.

Fong, aye. Krell?

Aye.

Krell, aye. Michelle Rodriguez?

Michelle Rodriguez, aye. Blanca Rubio?

Aye.

Blanca Rubio, aye. Schiavo? Soria?

Aye.

Aye.

Soria, aye.

That bill is out. Thank you. The next item on the agenda is AB 1842 from assembly member Harabedian. The recommendation is do passed to the committee on judiciary with amendments taken there. Mister Harabedian, please begin when ready.

Thank you, mister chair. And thank you to the staff for all the work on this bill. And thank you to all the committee members for I'm sure the numerous meetings you've each have taken on this bill. And, the other bill I'll be presenting, I do appreciate all the time and attention. Eighteen forty two is called the California Emergency Mortgage Act.

I wanna thank the chair for all of the personal time that he has put into improving this bill. We will be accepting those amendments that you would push forward, which I think strengthen the bill. They clarify that a residential mortgage is four units or less, not 10 units. It also clarifies the procedures for when a mortgage can be transferred, sold, etcetera. And also it improves the notices that need to be given to a homeowner under this bill.

And really what this bill is, is a statewide framework for mortgage forbearance in times of emergencies. We passed AB 238, the Mortgage Forbearance Act, last year for wildfire victims in the LA area with the Eaton Fire and the Palisades Fire really because of the work of this committee and the members here. I wanna thank you for that.

But what we realized when we were putting that bill together and because of the delays and actually passing it and signing into law, many homeowners who are suffering from the wildfire actually suffered worse financial outcomes because we hadn't passed this bill. And some of them even were for closed upon or forced to sell their homes.

And what we're trying to do is just avoid that going forward. It's hard to negotiate these bills while the emergency has already unfolded and while folks who have suffered through the emergency are trying to put their financial lives in order. So what this would do is simply provide a uniform framework for anyone who has a home that's uninhabitable because of a state or federally declared emergency. It would give the banks and the mortgage servicers clarity as to what the requirements would be.

It would be up to a year of forbearance just as AB 238 was.

And hope hopefully, it will provide, again, everyone some assurance and some clarity when we are watching victims of emergency such as the wildfires that just happened, try to get out of it. You know, the financial distress really is the number one thing that they're dealing with with insurance payouts coming in sometimes late and trying to pay their mortgage on a property that they no longer can live in.

This will give them, hopefully, a little bit of time to get back on their feet, and I do think that it helps everyone throughout the state. Unfortunately, with the wildfires and the natural disasters that are happening, it's just a matter of time as to when the next flood or fire is going to happen. And so, hopefully, we can be proactive and get in front of it.

With me today is Andrew Lucetta from the Center for Responsible Lending who will provide a technical testimony. Thank you.

Good afternoon, chair and members. I am Andrea Lucetta. I'm senior policy, counsel at the Center for Responsible mind

Yeah.

just pulling in the mic? Thank you.

Lending. Sorry. The Center for Responsible Lending is a national nonpartisan research and policy organization dedicated to promoting financial protections that help families build and preserve household assets. It is my pleasure to testify in support of AB 1842. I'll be referring to analysis by Fannie Mae and the Federal Reserve after hurricane Harvey hit Texas and Louisiana, showing that mortgage forbearance has a positive on the ground impact.

First, it reaches the borrowers who need it. Forbearance was most likely to be used by household that experienced flood damage, and use of forbearance increased with the level of flooding. It provides immediate liquidity, pausing mortgage payments allows households to redirect funds towards immediate recovery needs such as temporary housing and replacing damaged goods. It bridges the gap to relief. Forbearance prevents disaster related hardship from becoming a loan default by providing relief until recovery, funding such as insurance payouts and government assistance can be obtained.

It creates better loan performance. After Harvey, borrowers return to normal monthly payments once their recovery progressed, and ninety five percent had repaid their debt within a year. This bill is needed, because there's inconsistent relief today. AB 1842 provides uniform statewide standard. It provides core protections that matter.

It protects borrowers from late fees, provides accurate credit reporting, and prevents avoidable avoidable foreclosures. These are critical to mitigating long term financial damage to impacted homeowners, mortgage servicers, and mortgage guarantors. Nobody wins from a foreclosure on a disaster damage uninhabitable house. AB 1842 fits into an existing framework. Mortgage services already offer similar options under some, but not all federal mortgage programs.

This bill builds on what is already in place. Finally, it supports recovery. Preventing foreclosures after disaster stabilizes communities and helps speed up rebuilding. For these reasons, we support this bill.

Thank you. Are there any additional witnesses in support? Please approach the mic. State your name, organization, and position. Thank you.

Good afternoon. Nicole Curran on behalf of the office of Los Angeles mayor Karen Bass in support. Thank you.

Good afternoon, mister chair and members. Raymond Contreras with Lighthouse Public Affairs on behalf of Habitat for Humanity in California in support. Thank you.

Good afternoon. Danny Kendall Kaiser on behalf of the California Low Income Consumer Coalition in support.

Xavier Maltese with the California Charter Schools Association in support.

Are there any witnesses in opposition? If so, please approach. You each have two minutes. Thank you, and welcome.

Is this on? Can you guys hear me? Chair members, thank you for the opportunity to testify today. My name is Vanessa Lugo, and I am here on behalf of the California Bankers Association. First, we wanna acknowledge the devastating impact the 2025 wildfires have had on families and communities.

Many Californians lost not just their homes, but their sense of stability. We recognize how critical it is, that homeowners have clear, timely, and reliable support during recovery. We share the author's goal to ensure borrowers have access to effective mortgage relief, and we remain committed to helping affected homeowners navigate this process. CBA agrees with the author's goal in seeking statewide model of mortgage forbearance in cases of natural disaster.

In the immediate aftermath, before any legislation was introduced, CBA took proactive steps to partnering with the governor's administration to provide mortgage forbearance options for affected homeowners.

This early action reflects our commitment to delivering timely, meaningful relief when it is needed most. This emphasizes that lenders were already mobilized and assisting borrowers well before 238 was enacted. At the same time, we would like to highlight several practical implementation challenges with AB 1842 that go beyond the agreement reached with AB 238.

Many concerns around forbearance implementation stem from the fact that a large share of mortgages are governed by federal law and investor guidelines, including those associated with Fannie Mae, Freddie Mac, as well as private lab label investors. Servicers are contractually required to follow these standards, which can limit flexibility.

When state requirements differ from those obligations, it can create conflicting compliance duties and uncertainty for both servicers and borrowers. Mortgage servicing operates within federal disaster framework that provides standardized protections and operational flexibility when federal declarations are made. A state only trigger does not necessarily activate those same investor accommodations, which can require servicers to continue advancing payments to investors during extended forbearance periods.

For community banks and smaller institutions, that can create meaningful liquidity strain and reduce lending capacity at the very time communities are trying to recover. We also want to address enforcement.

While concerns have been raised regarding credit reporting, repayment structures, and communication, existing law already provides oversight through the DFPI, which can investigate complaints and take enforcement action, including license revocation. At this time, we do not see a clear need to provide a PRA, which could increase litigation risk without improving borrower outcomes.

We have offered substantive counterproposals, which we are not simply opposing which is why we're not simply opposing and instead are trying to be construction and solutions oriented and have drafted approaches that work within the existing system. CBA is currently reviewing all of the committee's proposed amendments. We thank the committee for narrowing the definition of residential mortgage loans from up to 10 units to four units, which better aligns with the bill with the traditional consumer lending and avoids unintended impacts on small multifamily and commercial loans.

In closing, CBA must remain opposed unless amended, and we look forward to continuing to work with the author and the committee.

Thank you.

Mister chair members, Indira McDonald here on behalf of the California Mortgage Bankers Association. Respectfully oppose unless amended. First, we recognize the critical role mortgage servicers play in the complex discovery in the complex disaster recovery process, and our members support helping homeowners in times of crisis. I wanna thank the committee and author for the committee amendment addressing one of our concerns related to the overly broad definition of residential mortgage loan. We're reviewing the other amendments and look forward to conversations.

We agree with the policy goal to provide the statewide framework, for mortgage relief during declared disasters. As currently drafted, however, and as proposed to be amended, the bill still imposes state specific mandates that may not align with the investor contracts and the legal and operational concerns that could disrupt the mortgage market.

Our servicer members service loans on behalf of the third party mortgage investors, and the vast majority of loans serviced by our members are held by Fannie Mae and Freddie Mac and the FHA, and we act as their contractual agents to collect payments on their behalf. These relationships are governed by the servicing guidelines approved by FHFA. The loans are sold to and serviced, on by on behalf of the private institutions subject subject to specific contractual requirements established by those investors.

The requirements generally mirror the Fannie Freddie requirements, but sometimes they differ. These investors play a critical role in the California mortgage market because they buy loans that exceed the Fannie Mae and the Freddie Mac limits. Because of high California property values, a significant percentage of the market is composed of these jumbo loans and are sold to Wall Street investors. The ability of our independent mortgage bank members to make loans is directly dependent on their ability to sell those loans to institutional investors.

And when servicing those loans, our members are bound to the terms of those contracts and will be limited in their ability to provide forbearance. For these reasons, its critical that the statewide framework for mortgage relief during declared disasters be clearly aligned with the federal requirements and recognize that the obligation to extend forbearance to borrowers is subject to those servicing agreements.

For these reasons, we respectfully request amendments to address several outstanding issues. First, the obligation imposed by the bill, the obligations in the bill, create the application of the state, emergency proclamation issued by the governor. Even if the Federal Government has not issued a state of emergency, this may create conflicts with federal agency guidelines. So we continue to request amendments to resolve that issue. The bill adds a prohibition for cascading payment processing to collect forbore amounts unless authorized by the borrower.

However, if a borrower makes payments during a forbearance plan, the payments must be applied to the sequence of amounts owed. So the default month can roll forward, and with it, the loss mitigation timelines can also roll forward, and that's to avoid foreclosure proceedings. To resolve this, we propose removing that provision. Additionally, the bill imposes new mandatory servicing reporting obligations to the DFPI.

However, d DFPI already has a statutory authority pursuant to licensing laws such as the Residential Mortgage Lending Act to collect business records and information on mortgage loans made or serviced under the licensing law.

Finally, we are have suggested some additional amendments to support implementation, and we look forward to working with the author and continuing conversations. Thank you.

Thank you. Are there any questions or comments from committee members? Assemblymember Rubio.

Yes. Thank you. I appreciate Assemblymember Harabedian bringing this up. I know that his community suffered tremendously. He's my neighbor, and so we kind of share the same we share a city together, actually.

But just wanted to, you know, express my appreciation to you for having a conversation with me. I was very clear about I do not believe in private right of actions. I think that that's not a good model. And so I know that that's in this bill. We had a conversation about your commitment to continue working on that particular piece.

Everything else, you know, is great. I, you know, share the concerns about that, but I know you will work. And if I can have a commitment that that's a piece that you will be working on, I will, you know, support the measure today, and I know I trust that you will keep your word.

Thank you. Through the chair. Thank you, Assemblymember. You do have my commitment, and I wanna thank the opposition. Their proposed amendments came in, I think, last week.

And, frankly, I think there's a lot there that we can work with. And on the PRA specifically, we will get to a point where I think everyone will be comfortable. And so you have my commitment, and I will continue to work with them to have a deal and a framework that everyone can live with. So

Assembly member Crow.

Thank you. I also wanna thank the author for bringing this bill forward. I completely agree with you that having a statewide framework, for this sort of situation for forbearance makes a lot of sense. I also think that, the opponent's position is well taken, especially the concerns they raised about inconsistencies with federal law, and that, you know, this is one of those things where it's great to talk about a framework, but the devil's in the details.

I'm concerned that they would not be able to comply with the details of your bill and with current federal law.

So I also plan to vote for your bill today. And the commitment that I'm looking for is that you will work to make sure that California is consistent.

Yes. May I? So appreciate that. The bill AB 238 and AB 42 all explicitly say that any forbearance under this bill would have to comply with federal guidelines and law. And that is explicit within the bill.

The language couldn't be clear that to the extent that any requested forbearance doesn't adhere to GSE, Fannie and Freddie investor guidelines or any contractual obligations under, their own mortgage, commitments, forbearance doesn't have to be, granted to the homeowners. So there's a clear safe harbor within AB 2238 and AB 1842. We can make that as clear as possible, but that that will not be an issue. So you have my commitment there too.

Can I ask the opposition? Because we've talked a lot about issues with inconsistency and that this would be difficult to comply with. Are you reading that provision differently?

Yeah. I think the intent is the bill last year did allow us to deny forbearance if prohibited. We don't want anything in the state statute that leads borrowers to believe they're going to get something if we have to deny it. That's not what we you know, we don't want to them. And so we would prefer that anything in the statute really be consistent with those guidelines so that we can be in compliance and offer the forbearance consistent with those agreements.

if you would add. Yeah. Yeah. No. I I agree.

I don't know

I think it's really the state only mandate would shape the public perception, and that becomes an issue. For instance, when the recent informational hearing took place, a lot of them were confused and assumed that they were getting forbearance when they weren't. And that's the that's the concern that we have is just making sure that the borrower is in clear understanding, and that would require the federal mandate, not the state mandate to be in there.

So is that something, mister Harbinian, that you can that you can marry up in the next...

Yeah. We will continue to work on it. I do think that we sort of confused two issues there, and it's even confusing for people who work in the industry. You'll hear from one of my testifying witnesses who lost his home. Unnecessarily confusing in ways that I think we can clarify.

I would just say that the federal versus the state emergency has nothing to do with whether certain guidelines or contractual obligations under federal law need to be adhered to. So, again, I wanna separate the federal versus state emergency. That's different from I think it's something that you're bringing up, which is inability to comply because federal and state law wouldn't actually, adhere to each other. Again, I will work out and make sure that both of those issues are taken care of.

But the the first issue is this law does not conflict with federal law.

It explicitly says that under GSE guidelines and contractual obligations, no mortgage servicer and no lender would be liable under this law as long as they are adhering to federal law. So again, that's clear in the statute. It would be clear under 1842, but we will continue to work with the opposition to make sure that that is crystal clear.

Okay. Understood. I mean, I think that you're right that there's two separate issues and perhaps my question conflated them. So apologies for that. But I think there remains even with that language, I think there still remains an issue, with the expectation that we might be setting up for borrowers, with with this kind of language when we know that it would not be compliant with federal lending requirements.

Understood. Understood. I appreciate that.

Thank you. Assembly member Rodriguez?

Yeah. I just too wanna thank the author for the conversation we had earlier regarding the PRAs, and I appreciate you being willing to, take the, amendments in the Senate. Thank you.

Thank you. Assemblymember Dixon?

Yes. Thank you, mister chair. Just, couple of questions. And thank you for bringing this forward. On the surface, I think it's laudable, and you're trying to do the right thing.

I just wanna be sure that we get to the details and the inconsistencies with state and federal. I just wanna clarify one two simple points. My colleagues across the table brought up private right of action. So you're suggesting that that will be dealt with

Yep. It will.

Appropriately. And then could you just clarify for me, is there a limit to it? Am I reading the bill correctly? A limit of four parties that would be affected by this?

So, residential mortgage is defined currently as the bill was proposed before the amendments were taken. It was up to 10 residential units. That would be reduced to four residential units. So any mortgage, on more than four units would not apply for forbearance under this proposed law.

It's limited to this. It is. Okay. Very good. Thank you.

Thank you. Assemblymember Soria?

Thank you. Thank you to the author for this piece of legislation, and I'm very grateful that you're thinking beyond what happened in Los Angeles as someone that came in, in 2023, and we had the huge storms that impacted Planada.

Still, people are in recovery after three years, and so I could see how this could be a tool and help for folks, you know, that experience the same level of disaster where they lost their homes and they lost a lot during that disaster in my neck of the woods. And so I appreciate, you know, the kind of conversations that you've also had with some of my other colleagues. I I wanna make it clear because I don't know if it was clear to me.

So what is your commitment as it relates to the, private right of action? Is that to just find language to amend it or to amend it out completely? I wanna understand that.

Yeah.

That's, my first question. And then the only other comment that I will make, because I think that it is important that we don't set up, you know, our constituents because I will tell you, I've continuously had meetings, community meetings after community meetings in Planada. Many of the families there did not qualify for FEMA because of their immigration status. And so some of them own their homes even though they're undocumented.

And so they've had to rebuild their homes from the ground up in many instances, and they're still building their homes.

So I get how this is gonna be important, but I also am concerned about the message that we send out that we are very, very clear. Because if those loans are not, you know, eligible for this relief, you know, obviously, it it will impact a lot of families. And so I I would hate to set them up, you know, to be in a place where they're really mad at us because they thought that they were gonna qualify for something that, in fact, they're not qualifying.

So Yes. I think just in the in the in the implementation, we have to figure out what kind of education is provided to, you know, the residents to make sure that if they don't really qualify because of federal law that that they understand that, you know.

So

No. I agree. I agree with you. And to your first question on the private right of action, that was always a, in some ways, a placeholder to make sure that we can enforce the bill. And we from, you know, the start in our conversations with the committee chair as well as the opposition, we're always open to suggestions about how do we enforce the bill without a private right of action.

Because frankly, I'm not a huge fan of them either. The opposition actually brought forward their amendments which would, put forward a system where local, enforcement agencies and the state attorney general can enforce the law. I think that's a very smart idea, and I think that's a workable approach going forward. So that's on the private right of action. On the second piece, I think the false expectations are a real thing.

And so I don't wanna downplay that. I think a lot of folks who go through any emergency where they lose their home or it becomes uninhabitable, they don't know where to turn. They don't know what they qualify for. It's a serious issue. This at least gives them a fighting chance.

We have been very clear, and I think we do need better education going forward, that some mortgages aren't going to apply. Because if investor guidelines or the law do not allow for those mortgages to be for border upon, then you don't qualify. A lot of the confusion, and we had an outcomes review hearing with the chair, is coming because they are being folks under AB 238 were being denied forbearance and weren't given the explicit reason why.

A B 238 and 1842 require a specific reason as to why you're being denied. It doesn't say you have to give them forbearance.

But if a denial happens, you have to show the, the applicant in writing why they're being denied. That a lot of banks and mortgage servicers are not providing that. And so I think this is sort of a two way street. We are not forcing this down anyone's throat. And to the extent there is a denial, we just want clear transparency as to why.

And again, we will work on figuring this out. But I agree with you. I think false expectation is a dangerous thing. But I do think this gives folks who may be in your district, I mean, we don't know where the next one will come, a fighting chance to get back on their feet.

Yeah. Great. Thank you for that. I'll be supporting the bill today, and I look forward to seeing, you know, the amendments that are made, once it comes to the floor. Thank you.

Got it. Thank you.

Thank you, mister Fong.

Thank you so much, mister chair, and thank you so much, Summer Harpreeting, for bringing us forward and and for your commitment and work and efforts around the space. And I know there's a recent hearing at Pasadena College around this issue as well. And some of miss Rubio represented neighboring district to you, and so really appreciate everything you have done just to the south of you.

And I heard from a number of colleagues as well, and we met with a number of folks as well, and we've had conversations also.

But also looking at, making sure that we comply with federal and state law and that we address any inconsistencies there. So I really appreciate your commitment around those efforts and around the privacy right of action as well. And so with that, I look forward to supporting the measure today.

Thank you.

Thank you. I'd also like to revert back now to any additional opposition in the room. If you'd like to walk up to the mic, say your name, position, and organization. Thank you.

Good afternoon, mister chair members. Rob Wilson with California's Credit Union is here in a respectful opposed and less amended position. Thank you.

Thank you.

Annalee Augustine, on behalf of

the Civil Justice Association of California, very respectfully oppose and very much appreciate your comments about the PRA. Thank you.

Mister chair, members, Anna Buck on behalf of the California Association of Realtors in a respectful, unless amended position aligning our concerns with the lending community.

Mister Trejo, Razi Gonzales on behalf of California's Business Roundtable. Respectful, oppose unless amended. Thank you.

Good afternoon. Chris Anderson, California Chamber of Commerce. Respectfully oppose, unless amended. But I appreciate the author and the committee for the amendments and for the collaboration. Thank you.

Thank you. I wanna commend the author for the tenacity that he's shown on this issue. I know it's extremely personal. And as it was mentioned, we did host an outcomes review hearing a couple of weeks ago. We listened to over two hours of testimony from fire victims, tragic horror stories, and what they're still undergoing now in the rebuild process.

I think a statewide model is essential to get ahead of what will happen again, unfortunately. So I do want to thank the assembly member for being proactive in that sense. We do have the dynamic between the federal and state jurisdiction. It's been alluded to by colleagues so eloquently, so I do appreciate that. But I'm confident in the assembly member's ability to navigate that and figure out a solution that's gonna be feasible for everyone.

I do also want to state that I appreciate your commitment to working on the PRA component and also staying in communication with the opposition as we move forward. Because at the end of the day, this has to be a partnership. The folks providing the mortgages to the people buying homes in California go hand in hand with the people that live in those homes. Right? So ensuring that we have a productive outcome when these emergencies do come up is of critical importance to me.

And with that, would you like to close?

Thank you, mister chair. Just wanna thank you again for your leadership on this bill in terms of, you know, helping us work through many of these issues and and to your staff, for all the work and the thorough analysis and and the suggestions. Wanna thank my colleagues for all that helpful comments and questions and thank the opposition again.

I do think that we will get this to a place where everyone will be comfortable voting for it, and I do think that we're paying paying this forward really to, future unfortunately, future disaster victims. And so let's get this right.

You have my commitment to continue to work on it, and I respectfully ask for an aye vote.

Thank you. Do we have the motion?

Thank you.

We have a first from assembly member Soria and a second from mister Fong. Madam secretary, please call the roll.

AB 1842 by Harabedian. The motion is do passed to the committee on judiciary. Valencia?

Yes.

Valencia, aye. Chin? Dixon? Not voting. Dixon not voting.

Fong?

Aye.

Fong, aye. Krell? Aye. Krell, aye. Michelle Rodriguez?

Michelle Rodriguez, aye. Blanca Rubio? Aye. Krell, aye. Thiago?

Soria? Aye. Soria, aye.

Thank you. That follows out.

Thank you.

Moving on to the next bill.

Should we stay up here?

AB 1847. Again, Assemblymember Harabedian. The recommendation is do passed to the committee on judiciary with amendments taken there. Excuse me. No amendments on this.

It will be as is do passed to the committee on judiciary. When you are ready, please begin.

Thank you, mister chair. Thank you again to the staff and to the chair for all the work on this bill. And we won't rehash much of the testimony that just occurred on the previous bill, but eighteen forty seven is simply an extension of AB 238. AB 238 was the Mortgage Forbearance Act that applies to fire victims of the Palisades and Eaton Fire.

Under that bill, it a an applicant for forbearance can receive up to twelve months, forbearance if their home becomes uninhabitable by the fires.

This would extend it to up to thirty six months of total forbearance. We've clarified other aspects in terms of the no lump sum payment, the same credit reporting issues, no foreclosure. The bill, AB 238, stays the same. The only thing that changes is just strengthening, the timeline, extending the timeline.

And, with that, I am really pleased and honored to be here with Robert Fagnani who lost his home in the Palisades fire and has done a lot of work himself to obviously obtain financial security going through this, but has also helped the community with their own mortgage forbearance issues.

So I will let him testify in support of this bill.

Thank you, chair and members. My name is Robert Fagnani. My wife, Rachel, testified before you last month at the AB 238 outcome hearings. Like she shared, we lost our home in the Palisades fire. There was nothing salvageable.

Our kids' school burned down. Their activities disappeared. And overnight, our entire life was turned upside down. We left Los Angeles the day after our house burned down and moved to Tennessee to live with family. It was the only way we could make the math work while figuring out how to rebuild and come home.

We're still living there today. I come from a finance background, and earlier in my career, was a credit investor at a large investment bank, more recently a partner at a large management consulting firm, and hold the CFA designation. Even with that background, getting clear, consistent answers on how to handle our mortgage situation has been incredibly difficult.

Consequently, my wife and I founded Disaster Mortgage Relief, an organization that connects directly with homeowners, runs surveys across the Palisades in Altadena, analyzes what's actually happening on the ground, and helps people navigate the complexities of a system that most were never prepared to navigate. So what I'm sharing today comes not just from our experience, but from hundreds of families going through this right now.

And the core challenge is simple. Rebuilding a home right now in the Palisades in Altadena takes two, three, even four years. But the financial relief fire survivors received through AB 238 was built around a much shorter timeline. And now we're past the one year mark from the fire, and AB 238 protections have begun to expire. We're at a real inflection point.

We're seeing people come out of forbearance and experience major credit score declines, some as severe as up to 300 points. We're seeing increased pressure from servicers and, in some cases, people being pushed towards foreclosure or selling their homes. This is happening right now. And in a concerning number of cases, I've witnessed servicers using incorrect data as the basis for loss mitigation decisions. And I'm happy to share examples today.

It's not uncommon for us to speak with survivors who are overwhelmed, confused, and on the verge of losing their homes. Moreover, these are people who did everything right. They were current on their mortgages before the fire. They followed the rules. And through no fault of their own, a disaster, their lives were completely disrupted.

They're still following the rules today, but the system they're operating in was not designed for this situation. You all have the power to change this. I know there's been discussion about handling these situations on a case by case basis. And while every mortgage is unique and lenders need flexibility to make credit decisions, what we're seeing is that this approach is not working in practice. People in very similar situations are experiencing different treatment.

Again, I'm happy to more share more data about this today. And not everyone has the same resources, access to top tier banks, or a private client relationship, financial background, or the ability to spend hours on the phone advocating for themselves. So what case by case becomes in reality is inequitable. And the people who are most impacted by that are the ones who make these communities what they are.

Teachers, small business owners, young families who are now being forced out and in many cases will not come back.

I'll close with this. This is a solvable problem. Right now, most families are facing a financial gap. They're trying to rebuild while still carrying debt on a home that no longer exists. This bill can bridge the gap.

And for many survivors, freeing up to two to three years of principal and interest payments and applying that to their rebuild is the difference between rebuilding and not rebuilding. You have the power to give these families a real chance to rebuild and come home. Because when they do, they don't just rebuild a house, they rebuild a neighborhood. They bring back the businesses, the diversity, and the economic life that makes these communities worth fighting for. Thank you for your time.

Thank you. We will now revert back to a subcommittee since we don't have the appropriate membership, but we'll continue with testimony. Are there any additional individuals in the room that would like to express their support? If so, please state your name, organization, and position.

Nicole Currin with the office of Los Angeles mayor Karen Bass in strong support. Thank you.

Raymond Contreras with Lighthouse Public Affairs on behalf of Habitat for Humanity in California in support.

Chair and members, Dean Grierfield with Capital Advocacy here on behalf of the County Of Los Angeles in support of AB 1847.

Danny Kendall, Kaiser on behalf of the California Low Income Consumer Coalition in support.

Good afternoon, mister chair and members. Robert Harrell, executive director of the Consumer Federation of California. We supported the previous bill, and, this just reflects the reality that we're living in now. Thank you.

Thank you. We will now move on to opposition. Please step forward. Thank you. You have two minutes each.

Thank you, chair, members of the committee. My name is still Vanessa Lugo, and I represent the California Bankers Association. And I'm here today to express opposition to AB 1847. We share the goal of ensuring homeowners facing hardship receive meaningful relief, especially after disasters. While well intentioned, extending mortgage forbearance for up to two additional years can create unintended financial strain to borrowers, including larger deferred balances, higher post forbearance payment burdens, and reduced home equity.

An extension of this length in the mortgage market moves beyond the established disaster relief frameworks that are typically designed as short to medium term solutions with structured paths back to repayment. This can introduce uncertainty into mortgage credit markets and how risk is priced. It is also important to clarify how federal disaster frameworks already operate. The Federal Housing Finance Agency does not prohibit forbearance beyond twelve months for loans backed by Fannie Mae and Freddie Mac.

Instead, federal policy establishes an initial structured forbearance period and then direct servicers to maintain ongoing communication with borrowers and evaluate extensions on a case by case basis.

This approach allows additional relief when justified by about borrower circumstances while ensuring decisions remain tailored rather than automatic or open ended. At the same time, extended forbearance beyond established norms create broader market concerns. Market capital depends on predictable timelines for repayment and recovery. When those timelines are significantly extended, it increases uncertainty for investors and servicers, which can ultimately lead to tighter credit conditions and reduce mortgage availability over time.

This is especially important given that servicers must comply with federal law and investor agreements, including those tied to Fannie Mae, Freddie Mac, FHA, VA, USDA, and private investors.

These frameworks are built around standardized loss mitigation structures and requirements that extend beyond them can create operational and compliance conflicts. For community banks and smaller institutions, prolonged forbearance can also create liquidity pressure as they may be required to advance payments to investors without corresponding borrower payments for extended periods. That can reduce lending capacity in the very communities undergoing recovery.

For these reasons, we recommend focusing on coordination with existing federal programs, borrower outreach, and education rather than adopting extended mandates that depart from established mortgage market practices. We have put forward a substitute counter proposal working proactively and not simply opposing this measure, but are working constructively to offer solutions that align with and operate effectively with the existing system.

We believe this approach best supports homeowners while preserving stability and availability for the mortgage market in California. Thank you.

Thank you.

Indira McDonald, on behalf of the California Mortgage Bankers Association and to express our opposition, I want to acknowledge families impacted by the devastating Eaton and Pacific Palisades fires and the author's noble efforts to find solutions for borrowers navigating the complex recovery process. We understand the goal of the bill is well intentioned. However, we do have serious concerns about unintended consequences for the very borrowers this bill is trying to help.

AB 1847 extends the forbearance obligation under AB 238 from twelve months to thirty six months and requires a mortgage servicer to offer borrowers the option to defer repayment amounts to the end of the loan term unless prohibited by the investor. The key issue here is misalignment with investor guidelines.

Servicers act as agents for institutional investors such as Fannie Mae, Freddie Mac, and must comply with the terms of the servicing contract. This means that any offer of forbearance must be consistent with the terms dictated by the institutional investor who owns the loan. If state policy requires more than what to those contractual guidelines allow, it creates a potential gap between what is required in statute and what can actually be delivered in practice.

Fannie Mae, Freddie Mac, and the FHA currently provide flexible forbearance frameworks designed to meet individual borrower needs. These institutions are each continuing to offer forbearance beyond twelve months, but are generally making forbearance decisions on a case by case basis.

Extending forbearance outside of existing framework creates legal, operational, and financial uncertainty for both borrowers and servicers. Specifically, we are concerned that the bill will create an expectation that all borrowers are entitled to an additional forbearance period when Fannie and Freddie are only allowing additional times on a case by case basis based on each borrower's unique circumstances and needs. In closing, I want to underscore that forbearance is most effective as a temporary financial bridge, not a long term solution as contemplated by this bill.

And then when tailored to the individual needs of the impacted borrower. While forbearance provides immediate relief, the deferred payments and interest are not forgiven and must ultimately be repaid often through the loan balance or a structured resolution.

While this may be appropriate solution for some borrowers, we are concerned that the bill suggests a three year forbearance solution for all borrowers regardless of their particular financial situation. Further, we believe the forbearance decisions are best made on a case by case basis, which allows the servicer and investor to distinguish between a homeowner that needs time to rebuild and a real estate speculator, that may have acquired the property as an investment, to turn a profit.

For all these reasons, we would ask for your no vote today. Thank you.

Thank you. Is there any additional opposition? If so, please step to the mic and state your name, organization, and position. Thank you.

Mister chairman, Horacio Gonzalez on behalf of California's business roundtable in opposition.

Mister chair and members, Cliff Costa today on behalf of the California Mortgage Association in opposition. Thank you.

Mister chair and members, Anna Buck on behalf of the California Association of Realtors in opposition.

Chris Anderson, California Chamber of Commerce in opposition. Thank you.

Rob Wilson, California's Credit Union's here in a respectful opposition. Thank you.

Thank you. We will now bring it back to the committee. Are there any questions or comments? Assembly member Rubio?

Thank you, mister chair, and thank you, Assembly member Harry Beatian for bringing this forward. I do have a couple questions based on the testimony and best based on our conversation earlier. Actually, there's additional questions. The whole alignment with Fannie and Freddie, I feel like they should come and visit us.

I agree.

They should stay with us. But Fannie and Freddie, you know, the alignment is, you know, crucial, I think, because we don't wanna be in conflict with them. But the questions are, in the meantime of the forbearance, I have an impound on my house. And so how does that work with property taxes and insurance? Because the mortgage companies are still going to are they still going to be paying the property taxes and the insurance without receiving anything?

Or is and what happens when when the forbearance period ends, now do they have to pay three years back of of property taxes? I'm not quite understanding that. How that would work. And then let's start there

So on property taxes, if you have impounded property taxes, I think that's where the question is coming from. To be clear, the property tax obligation is still with the homeowner. So most homeowners don't have impounded. Most homeowners pay it. You shouldn't have impounded.

Yeah.

You should you should you should pay yourself. Let He's gonna give you yeah. It is easier, but you should pay yourself. To the extent that you have impounded, that should not and again, this is the first time I think this issue has been brought up. That should not impact the mortgage servicer.

The actual homeowner should still be paying their property tax. Okay? So this bill does not shift any obligation to pay for property tax. There is relief under other bills for anyone who's lost their home in a wild wildfire or flood about property tax. I mean, that's a whole separate issue from this bill, but this bill should not affect property taxes whatsoever.

So that that should be clear. We're not doing anything.

But that's the concern. Right? So if I'm a uneducated, you know, I'm going through a hardship, that's the last thing that I'm thinking about. I'm thinking about, you know, I'm in where are you, Tennessee, trying to figure out how this is happening? Right?

So you have all of these stressors. Are you actually going to be thinking about that, or do you think that forbearance means everything. And then you're not going to be up to date on taxes? And Yep.

You know, how do we communicate that to the homeowners so that they don't get in trouble? Because I think that's part of the concern as well is, yes, we want to offer relief, but, you know, is it complete relief? And are people misunderstanding the fact that

Maybe they are. I mean, in all of our case study and anecdotal feedback and the outcomes review here, no one has come forward to us saying that they were confused about their property taxes and insurance. Those are still obligations that folks in the disaster zone still need to pay. This forbearance bill does not give them any sort of additional relief on their property tax or insurance that other bills haven't. Right?

So I don't think there is again, I don't think there has been confusion. I mean, I can have mister Fagnani, Kinda speak to that as someone who's going through this. I think the confusion is actually from other sources, which is trying to deal with different banks and different mortgage servicers applying rules and bills differently. And so to the extent that we have to build in anything to clarify that this doesn't affect property taxes or insurance, we will do that.

I mean, that's something that I can do.

Yeah. Because you mentioned that there's the the property taxes, there's relief in a different way. And I imagine with the the tax assessor is the person or the that's doing that. Are they in agreement with not just the forbearance or for the the relief that you mentioned through other bills? Are they going to also honor the additional three years that that

you're seeking?

Yeah. It's a question that I haven't really considered because it really legally wouldn't affect it. So, let's say you get three years of mortgage forbearance that has no effect on when and how you've you will be paying your property tax or your insurance. This bill will not affect that at all. So, truthfully, I haven't thought much about that interplay.

Because people lose their homes based on property tax.

Sure. Sure. They absolutely do. So, obviously, that is not an issue that this bill is is addressing. And I guess, you know, to the extent that that needs to be clarified, this doesn't affect property tax or insurance.

Okay. Thank you. And then the availability of cash flow, if you will. Not everybody is, you know, the big banks. Right? The big mortgage companies.

I do have a concern about the liquidity, if you will, of, you know, people are not paying their mortgage on because of forbearance. Is there going to be an issue where and maybe that's a question for you all, of, you know, slowing down on other mortgage loans because there is less liquidity based on the forbearance. That's in a you know, assuming that everybody takes advantage of the forbearance. Right?

I know that we don't have that those numbers, but is there a liquidity issue based on, you know, how many people are taking advantage of the forbearance for an additional three years?

I understand. I imagine that they're prepared for, you know, one year, maybe two years. But are they prepared to take on that debt for an extended period of time? And is that gonna affect new mortgage seekers from getting mortgages based on the fact that, that money is not coming in.

Right. No. It's a fair question. I'm concerned about that too. For small mortgage servicers or even big more mortgage servicers, how much of an impact are the LA fires putting on those companies because of this forbearance?

We have asked the opposition. We've asked the mortgage servicers to provide us data about financial distress. I'm all ears. And if we haven't been provided that data, we've requested it numerous times. We've requested basic data such as how many forbearances have been granted in the fire zone under AB 238.

We still don't have that. The opposition claims that they don't have it either, and they would have to go and find public data reporting agencies that would give that to them. Regardless, I wanna have that data too because, like you, this is all about financial risk and mitigation of that risk and who can bear it better, the homeowner the individual homeowner is trying to rebuild or a very large company or midsize company, financial company with millions, if not billions of dollars on their balance sheet.

I would love to be able to argue that point from the data and the evidence. Unfortunately, I don't have that, and I don't have any way of getting that.

So I'm with you. I wish we had that data, and I want the data. And I hope that we can all come to agreement that the more data we have, the more we can perfect this bill. Unfortunately, I don't have that data.

And then the last question, is this gonna have an urgency clause? Because I imagine if you're not coming till January to try and get this implemented.

I don't wanna confuse 1842 with 1847. But Hey.

It's all confusing. Yeah.

I mean Exactly. I believe this does have an urgency clause. Yes.

Yes. So that means that on the floor, you'll need 54 votes.

Okay.

Exactly. Okay. Yeah. A lot of work to do.

what I mean?

You know

I but the point is

Yes.

You know, that is for me, that's a breaking point. I need to have that data. I'm asking you as well because I did ask for that information. And, you know, until we have that information, I can't have that discussion. And so if we can get that information, then we'll have to continue the conversation.

So I just wanna make sure that we're clear.

It does require 54 votes.

Yep.

I appreciate that. And I do. I want that data too. And, frankly, hopefully, we can get that data sooner rather than later, and we can continue the conversation. I completely hear you on that.

Thank you.

Thank you. Assemblymember Krell.

Thank you so much. Appreciate the author bringing this bill and also the witness, mister Faniani.

I hope that I got your name right. I'm sorry if I got it wrong. I'm sorry. Thank you for your testimony today. Thank you for bringing the bill.

I plan to vote for it today. I do share, the colleagues that the concerns that my colleague, assembly member Rubio, just discussed with you. I also have another concern that I wanted to bring up and talk through with you guys. About fifteen years ago, I was one of the leaders on California's mortgage fraud strike force. I prosecuted cases in state and federal court that had to do with unscrupulous actors taking advantage of vulnerable borrowers.

The situation's actually started a lot like this. It was borrowers who, had gotten some sort of forbearance. They had gone through some kind of situation that made them financially unstable, either, a loss of a job, a medical issue, a death of a loved one, all kinds of tragic circumstances that put them in a position where, predatory actors preyed on them. And it was various foreclosure rescue schemes, loan modification fraud, those sorts of things.

But what they all had in common is something that I see in common with your bill, and that's the idea, of a of a a forbearance and then a crushing debt and three years worth of forbearance.

And so the idea, that some borrower would be able to either come up with a lump sum, which they they which would be very rare, or this would get added on, you know, to their payments as a modification where they would be agreeing to pay for more than they had ever been approved to pay before, or they would be due, you know, ostensibly at the end of the loan that none of those options seem like they would be feasible.

And so instead, we'd be setting this person up for failure and even worse financial distress than they're at, you know, right now.

Yeah.

And that we'd be setting them up for this financial distress and also for this predatory kind of underground market that no matter what California does seems to creep out of whatever financial, you know, circumstance tragic circumstance that we're facing.

that we'd be setting them up for this financial distress and also for this predatory kind of underground market that no matter what California does seems to creep out of whatever financial, you know, circumstance tragic circumstance that we're facing.

Completely agree with everything you just said. And frankly, it's why we brought AB 238 and why I'm bringing $18.47. Lump sum payments are crushing. And frankly, they put people out of their homes. They cause foreclosures.

I will tell you what was happening before AB 238. Lump sum payments were being forced upon my residents and folks who live in the Palisades. Even after AB 238, there were lump sum payments that were required. There were over 230 complaints that were filed at DFPI. 93% of those complaints were resolved in the borrower's favor.

I do not want lump sum payments. I think that any sort of forbearance should be met with deferral and some sort of amortization of that money to be repaid back over the course of the loan. That's what this bill assures. Robert can weigh in here. It's precisely because of that distress that comes from these balloon payments.

Why would I think we really do need 238 extensions here with 1847. And I was curious as to the opposition bringing that up as an opposition point that somehow granting this extension would put people in line to do lump sum payments. A lump sum payment is illegal under this bill. Plain and simple. Whether it's 50 and Assemblyman Rubio brought this up earlier, and we had a great conversation about it.

I want to make sure that no one who takes a mortgage forbearance under this law has to ever pay back a lump sum payment, period, quotation mark, full stop. This is why I brought the bill. And so I guess I'm still curious as to and maybe the opposition can explain it, why lump sum payments would still be available to the extent that forbearance was being granted under this when the bill precisely and specifically says that those aren't allowed.

And so I share your concern and it's and it's why I think this is necessary and why I brought the bill.

Okay. I'm gonna ask them about lump sum payments, but assuming there's they're not lump sum payments, I mean, there still has to be

A repayment.

Application

A repayment, which would increase which would increase the monthly payment. I mean, it would increase the interest. It would increase the principal.

It would. It would. And I just listened to homeowners and survivors on this point. They are begging for forbearance. They are saying we understand that we will pay this money back.

We understand that it would accrue interest and principal going forward, but we need it because for what Mister Fagnani said, we over the next two or three years, why we are rebuilding, need this money to actually rebuild, and we will be able to pay it back later. We just can't both rebuild and pay this mortgage and the principal and the interest right now because we don't have that type of money.

And so what they are saying over and over again and all the testimony we heard at the outcomes review hearing was, we need this. We want this, and it's actually helping us survive. And so I just fall I just follow what I'm hearing from survivors.

Do I take pleasure in in doing this against the opposition? No. But what I do take a lot of pride in is that those who are going through this are benefiting from this. It's actually helping people stay in our communities. And to me, that that's important, and I'm gonna keep fighting for that.

They're just like that. It two things. One, so we've run multiple surveys getting to know the community quite a bit. Obviously, balloon payments are not going to fix this problem. But as everyone looks at their situation, over 80% of people that have mortgages are underinsured.

They have a gap to close. And when you start to look at how much money it's gonna take to close the gap, it's about three to four years' worth of principal and interest. So in Altadena, that's about $50,000 a year of principal and interest on average based on our survey data. In The Palisades, it's about $105,000.

So if you were to say and Altadena call it a $150,000 over three years or in The Palisades, $300,000 over three years, that you could go put that money right back into your rebuild in exchange for about, again, averages, but maybe $5,800 more per month in your in your principal and interest cost when you're back in your home, I haven't heard a single resident say that they would not take that deal.

And that's a deal where you are refinancing the principal and interest that you deferred at market interest rates. It's a fair trade, and it's a win win for homeowners, mortgage holders, and financial institutions.

Can we hear a response from the

Please.

I'm happy to make a few comments on the lump sum issue. So typically, so the there's private investors, there's the GSEs, Fannie Mae, Freddie Mac, and then the Ginnie Mae, which is the FHA, VA, USDA. They all do things a little differently when you're exiting forbearance, and that's part of, you know, what makes us a little bit confusing. So typically, you can defer payments under the GSEs for twelve months. But when we're talking about 24 or 36 months, it's not typical.

Usually at that point, there is a balloon payment. For Ginnie Mae after twelve months, then they might consider what's called a partial claim, which is actually like a silent second that they hold, but then there's a balloon payment at sale and maturity. So they all do things a little differently.

Our concern is just that that if the actual guidelines based on whichever, investor is holding your loan, if indeed they don't allow deferment to the end of the loan, it's only up to twelve months, then the that's where the balloon payment is a big concern, and we've heard that and I completely recognize that. So again this really gets back to the fact that forbearance has always been used as a short term solution, not a long term solution like contemplated by this bill.

Short term, you might be able right. You might prefer to do the lump sum rather than increase payment plan or deferral. So it really is generally if it's in the short term sense, the borrower gets to decide what they'd rather do to take care of the delinquency, and it gives them choice and also generally works for under the servicing guidelines and our restrictions. But that's why the the big concern there is that we're going beyond we're, you know, beyond 12 into 24, 36 months.

Yeah. And from CBA, I mean, Indira said it the way I I mean, I echo her her statement.

And just to be clear, I mean, the the three years is way beyond any of the contracts that the investors have.

Yeah. Yes. So typically, it's twelve months. I've heard that in some, like, the Lahaina wildfires that is now that was 2023. I've heard there's been some case by case.

Right? But, again, that kinda goes back to if they're looking the investor is it's called a variance and the servicer has to request it. And if the rebuilding process is going on and things are moving forward and then they can't approve it. But this is, you know, when you're talking about going beyond twelve months, it's very much case by case. Yeah.

And then, on the property taxes and insurance, that is typical. The investor requires the servicer to make those payments. If the borrower can't make property taxes and insurance during that forbearance, the investor requires the servicer to do it. And that can be that can go into your, exit strategy that can be financed into the exit strategy also.

Yeah. And just to add to that, so we have had conversations with FHFA, and so we asked them if they were thinking about extending forbearance, for the fire victims beyond the twelve months. And they said, no. Not at this time.

But they did encourage us to have our members keep that open dialogue conversation between the borrower and the lender so that if they need it, that on the case by case scenario situation where they can check the boxes to see if there's they fall within the guidelines that they get that extension.

Okay. I'm curious if the authors had any conversations with FHFA.

About property tax insurance? I'm sorry. About what?

About the loan about the four about the about extending the length of the forbearance to three years.

Our my office has. Absolutely. And again, I'll just say that the conversations and we will continue to have conversations. We're trying to make sure that each agency on the federal and state on both levels, federal and state can work this out and make this doable. But just going back again to the property tax and the insurance, yeah, this bill does nothing to affect that whatsoever.

Like, I just wanna be totally clear. To the extent that any insurance or property taxes due, this wouldn't affect that. Again, in an impound situation, Indira mentioned that certain guidelines say certain things. Those guidelines would would be in place. And so, I do understand that if an extra year or two of forbearance were achieved, that would put extra strain on the mortgage servicer.

Well, I think at that point, there needs to be a conversation with the homeowner if necessary that any sort of impounded property taxes would have to be, you know paid themselves or actually paid outside of the impound account. Right? But I don't address that in the bill. I think that's something, you know, a separate issue that is interesting yet irrelevant to this bill that I will continue to help clarify. But it really has nothing to do with this bill.

Okay. I mean, that wasn't really what what I was asking about. But-

Okay.

Yeah. We'll Appreciate that. Yeah. I mean, just that I mean, the issue with FHFA and with their what there's what the mortgage services are saying, basically, is that we have these contracts, and the longest length of forbearance is a year, and you're extending it to three years. So, again, it's an issue of consistency.

There's potentially a federal preemption issue here with this being federally regulated. So, I'm just and I want to find some kind of middle ground here. So, I'm just wondering if FHFA had any suggestions that were helpful to you to try and kind of thread the needle on this.

Yeah. I would say in our conversations, no one has communicated to that to us that this is somehow undoable. Now, I take opposition at their word that this would be difficult, and it is longer than what has been contemplated in previous instances. But I think the new normal, which you've heard from Mister Fagnani and all survivors, I think that this is a reality that a lot of folks are going to need this past twelve years.

And, again, just because forbearance typically is not granted, you know, beyond twelve months, it is granted in many instances past twelve months on a case by case.

So it's not something that somehow can't be achieved in in all circumstances. And I to that point, I think it's still a relevant inquiry that we have had to the opposition. We don't have the date of how many mortgages are we talking about? How many people are actually taking

I mean, I think that's a that's a really important question. Like you're saying, I mean, it is being offered on a case by case basis, which is

Potentially. Yeah.

Which which is good, but you're saying case by case is not adequate. We need this across the board, and they're saying they can't comply with it.

Yeah. Well, I would say that we have not in the anecdotal evidence we have, in the case work we've done, we have not heard voluntary, offers of mortgage forbearance past twelve months. Maybe there have been in Lahaina or other places but Palisades and Eaton Fire survivors, I don't have instances where I've heard of just voluntary mortgage forbearance past the twelve months.

I do think that we have been asking for a long time, at the beginning of the introduction of this bill and even before that of how many mortgages are we talking about? How many mortgages within the Palisades and Eden Fire are under forbearance under 238?

I still have not gotten that data. We've requested it. I certainly don't have it. My office certainly doesn't have it. I'm not sure why we can't get it.

We'd love to have it. Because if this is 10 mortgages versus a 100 versus a thousand, I think it makes a big difference, and I think all of us could be on the same page.

Alright. Thank you. I do plan to support the bill today. I wanna continue to work through it with you, and I may not be able to support it on the floor if we're not able to resolve some of these issues.

I appreciate that.

Would the opposition like to address any of those points, Megan?

Oh, I would love to just on the data because we we do want to see the data. And as the Mortgage Bankers Association, we can only collect data from Kinda survey voluntary from our members, which is a small portion of the licensees across the state that operate in these. And so we have suggested and continue to suggest that the Department of Financial Protection Innovation is the regulator and under the licensing laws, they can collect data. And we would encourage the legislature to get the data.

And if they don't have it, they could they have authority already to collect it. And in fact, we support that and want to see the data come in, and address that. Thank you.

Thank you. Before we move on to Assemblymember Soria, I would like to share that we have requested some of that data. It was a part of the question that we submitted after the forum that we hosted a few weeks ago. Things like, the number of residential mortgage forbearance requested, the number of residential mortgage forbearances that were denied, the number of residential mortgage forbearances that were granted to get a sense of the data and the dynamics that are undergoing with this particular fire.

Let's go ahead and move on to Assemblymember Soria.

Yeah. Thank you so much for this discussion. I do wanna thank also Mister Fagnani for your statement. Aye, I really empathize with what you and your family have been going through. I've seen this very similar in my area in terms of the floods.

And today still there's a number of people still trying to rebuild and obviously, they weren't beneficiaries of any type of forbearance or anything. So they're still trying to figure it out. But I did, want to ask some specific questions. I do appreciate, you know, the responses to some of the questions already posed by some of my colleagues. I think the data, just to I'll put it for the record, I think is extremely important.

We should know, how many mortgages are being impacted. At minimum, do we have any data on the number of residences that were impacted by the fire? Do we have that number?

Yeah. Between the two fires, you have a 193,000 people roughly. You know, you have anywhere from 16,000 to 17,000 structures. Within that, there are some commercial and residential you know, residential and commercial. But I think, you know, anywhere from 11,000 to 12,000 to 15,000 homes.

Now again, that that data, you know it's not perfect, but it's general ballpark.

Thank you for that. Wanting to ask you a specific question in terms of I understand in trying to extend it for thirty-six months. I get it. I know how hard it is for especially folks that maybe not have the education or the wherewithal to go through some of these existing processes that already exist and especially forbearance. But I'm just curious to know why we think that we should be extending the time to initiate a request of forbearance until 2029.

That seems to me kind of interesting. Why are we doing that? What I understand, you know, maybe extending it an additional six months, but, like, all the way to 2029. Is that assuming that people are making payments right now, or they're just we're assuming that people are not are not paying now and won't pay for another three years if they actually initiate the request in 2029? I'm curious in terms of how you guys came up with that date.

Yeah. And I'll go back to the bill. We are working in a provision so that someone who is still trying to rebuild or can't inhabit their home can still get mortgage forbearance, again, up to three years. And I'd have to look at the date as to when you can initiate that. But I do know that we're trying to extend that because there are folks who have not requested it yet, but are going to the more financial distress that they're in.

And so if the date is 2029 or three years from now, what we're trying to do is, again, just build in more relief so that people who are and you asked, that would assume that they're current on their mortgage. Right? That would assume that they're not falling back behind on their mortgage up until that point when they request it. And so folks sometimes delayed a week, a month, two months, three months.

Hopefully, folks aren't delaying two and a half years, but we wanna make sure that this is a tool that all survivors can utilize.

And some fire survivors are going to need it later. The more that things delay, the more that things drag out, and the more that costs go up and they rebuild. So that's why we've delayed the implementation in terms of when you can actually request it.

So that would assume that they're paying I just

Yeah. It would assume that they are paying their mortgage. Yes.

Yeah. Which seems kind of interesting that you know that's even that's happening. But okay. My follow-up question to that is, I just kinda have I'm trying to understand, also kind of how the federal relief component works with all of this. So I understand the concerns that you know the mortgage folks have and the mortgage companies.

So are there any existing federal resources that help mortgage companies when we have disasters happening in our state when people can't pay? Like, is there anything that you guys can also, resources you guys can get during this time so that we you know, obviously, you guys hear the stories of Mister Fagnani. He's not the only one. I've heard it time and time again in my district. And so I'm wondering what kind of federal resources are there for, your guys' companies?

I'd be happy to address that. So, I get back to you around some of the relief through FEMA. There are there are, relief programs through FEMA. But for the state of California, I know there's the Cal Assist program, which the Governor did implement. And in fact, it was just expanded, based on income levels.

And so I would absolutely encourage that the state look at those are direct financial assistance that does not have to be repaid back. And that's why it's so much better for borrowers than forbearance because forbearance is just kicking the can down the road and you still have to pay.

But when you can get if you meet the eligible criteria, then you can get direct payments that go straight to the mortgage and, you know, cover the mortgage payment and then you don't have to pay it back. And so that is absolutely something that could be looked at as an alternative to this, and we would support that.

Great. So I understand that, but I think my question to you guys, are there, like, resources that mortgage companies during times of crisis and disasters that you guys are eligible for, or is it all just the federal money for, individuals? I understand that the fundings that are. But, you know, we've had a mortgage crisis. Banks were bailed out during the mortgage crisis.

And so I'm just trying to think, are there resources out there? Because I do think that we have to find a middle ground in terms of, you know, assisting folks, you know, that are in such a situation but I wanna understand what resources are out there. Obviously, the feds have acted in other times, right, like, during the whole mortgage foreclosure era.

So I wanna figure out, okay, are there things that we should be also advocating at the federal level so that maybe you guys aren't losing out as much, but at the same time, you know the residents that have these mortgages looming over their head as they're trying to rebuild that they also, you know, have that relief.

Yeah. That's that's a good question. We're happy to get more information on that to you. But just to add to that, I I don't know if this will answer your question, but, in our conversations with FHFA, there is a nonprofit called porch light.com that they did reference, and they said that it's available for a lot of these natural disasters that occur throughout the country.

And it's a nonprofit that helps borrowers really navigate through the red tape because it is a confusing process, in counseling, in helping finding grant funding, and doing all the above, in basically a crime of a time of crisis to help guide them, And it's free counseling.

Yeah. No. Appreciate that information. I'm just trying to find out if there are resources that for the direct for the mortgage.

I'm not aware of any in our serve that's part of all these concerns with this bill is that they don't have a relief to keep making these payments for the borrower, and so they are very concerned that support at least, certainly for the smaller ones, if they're concerned that they'll not be able to keep making those payments on the borrower's behalf for the total third up to three years.

Okay. And then, also kind of on that on that same vein, if a borrower ends up getting some FEMA relief, are they still when does when does their forbearance become due? Like, does that get taken into account if they are you know, I know that it takes forever to get FEMA funding. I've seen it, with my own constituents. But when you guys make a decision for forbearance, are you guys making it contingent upon it expire because they give FEMA funding or any of that?

How how does that all come into play?

So, typically, this this bill is streamlined forbearance. So it's based on affirmation that the borrower calls and says I have a financial hardship and I need that, and then we comply with the prior bill 238, which is streamlined. And this is based on that, this extension. Typically, all borrowers, whether you're in a disaster zone or not, you are able to ask for forbearance. And typically, they go through a general application process and they're asking those type of questions.

Has your income changed? Are you getting really right? In that case, it might be, are you getting some relief? Your income may have gone down, but maybe you're getting some financial assistance from different programs and therefore you can or you can't make your payment. And so the job of the servicer on behalf of the investor is to go through all those questions and find out, you know, if your infant's gone up or down, have your expenses.

Maybe it's your expenses. Yes. You have rent or you have additional expense obligations. And that's their the typical way that the servicer and the borrower work together to figure out what's the loss mitigation that's appropriate for you. Kind of forbearance is one in the toolbox.

And it usually is the first one because it's a short term. Right? But there are other tools in the toolbox, and the job is to kinda go through all those questions just like you're saying. What type of right assistance might you get?

Yeah. And that's that check checking the boxes that I referenced earlier going through and seeing if a borrower qualifies to get the extension. And I think it's called the form 710.

Yeah. Different lenders. That's the Fannie yeah.

There there's a Fannie Mae and Freddie Mac form, and then most investors have their own type of form or banks.

Great. Thank you for that. This has been very educational. The one thing that I will say in terms of, you know, the bill as it's written, I don't know if, like, extending, the initiation request until 2029 if I'm comfortable with that.

I think that, obviously, I know that we're six months away. I think that for me to be comfortable, we we would we would need to revisit, you know, what is another, much more appropriate timeline.

I think that we have to do a better job of educating the public, And I think that we have a responsibility, also as a state, if we are putting this information and, you know, other groups that I know are on the ground that have a responsibility to figure out how to better inform the public of certain benefits. And so that folks are applying by, you know the deadline, which I know the current deadline right now is to January 2027. Correct?

Correct.

And so I think, from my personal opinion, I think that that deadline, should be revisited, but that's just personal opinion Thank you.

No. I appreciate that. I'd love to continue to work with you on that. And I think that is something that I think we could come to an agreement on. So

Thank you, Assemblymember Soriano. Assemblymember Schiavo.

Thank you for the great discussion and for bringing this bill forward. I know it's it's complicated and difficult, and there's not a perfect solution that exists. And it's it's not a perfect situation. It's a terrible situation.

So I just I wanted to follow-up a little bit on the balloon payment discussion that happened because it was the the response from the opposition confused me a little bit because you were talking about how there's, you know, different different folks do it different ways, basically, and it kind of depends.

But if this bill is very clear that it doesn't allow balloon payments, then it would be illegal to do a balloon payment. Correct?

Unless prohibited by the investor guidelines is the way that AB 238. And that was intentional.

Okay.

Because in some cases, we can't.

Service or cannot. Yeah.

Okay.

Right. Okay. Great. And, you know, I think the mention of the nonprofit that will support people kind of through the process because the process is confusing.

I mean, you know, I think the challenge is and it sounds like just anecdotally, you haven't heard of anyone who's gotten an extra time in their forbearance.

I we haven't. That doesn't mean it isn't existing, and it

Hasn't happened. We have not heard about that.

Right.

Okay. But you know, but it's not as if there's kind of a equal balance of power in this situation. Right? The borrower goes to the bank crossing their fingers and supplying a bunch of information. And you know, I've had a bank that's worked with me, and I've had a bank that would not return my phone calls, you know.

And so I think a lot of people have had very different experiences. And it's, you know, even though it's a case by case basis, that does not mean that if, you know, I bring my case to x bank that they're gonna approve it. If I brought it to y bank that they would also approve it. Everybody's it it's kind of what behind what's behind the curtain is a little bit of a mystery, and you don't know how this is gonna be decided.

And so, you know, I think that this is trying to get at that.

And with the very practical understanding that most people can't pay a mortgage and rent and for a rebuild. I mean, that's just impossible for most people.

And so it's I think that this kind of forces us to have a larger conversation about where we are at as a state on these kinds of disasters and, you know, and knowing that there is going to be more, that climate change is real, banks, insurance companies all know that better than anyone else, and that maybe a twelve month or, you know, how the rules exist right now are probably not practical and not working for people and not realistic for us to be able to, for people to be able to remain in their communities.

I mean, you have a lot of working class folks who come from the Altadena community who this was the only reason they're they own a home is because it was passed down over generation after generation after generation. And, you know, and those folks are trying to remain in that community.

I know people who live in that community, who are struggling and out in the Inland Empire, you know, living with family because they can't afford to pay rent and a mortgage. So, you know, this is kind of dire times for folks. And as you said, clearly the banks have millions, maybe billions of dollars on their balance sheets and, you know, borrowers don't. Borrowers are trying to figure out how to pay for food and gas right now.

So, you know, I think that we have to have a larger conversation about what is really realistic for people in in terms of rebuilding.

You know, they're this money goes on the back end. People have to repay it. It's not like, you know, it's loan forgiveness. It's not like they don't have to pay this back. But it's, you know, otherwise, it we're we as California are just saying, if you have the horrible luck to suffer a terrible, you know, disaster like this in your community, then too bad, you're probably gonna have to give up your home and go somewhere else.

I mean, that's the reality for most people if they have to pay both rent and a mortgage and try to rebuild. So I'm supporting it today. You know, I know you're still working with opposition and trying to figure out some of the, you know, the tweaks that need to continue to happen, but it I mean, this is just the reality we're facing that people are struggling and in dire straits to be able to try to survive.

After these devastating fires. So I know you've been an incredible voice for your community and appreciate how hard you've been advocating for them.

Thank you. I appreciate that.

Thank you. A question for the opposition going back to the voluntary forbearance topic. The assembly member, the author mentioned that he was not aware of any voluntary forbearance that has been implemented during this crisis after twelve months. Do you all have data on that or examples that you could share where that has been the case, whether it's 18 months, 24 months, 36 months, which is what it's trying to be accomplished.

I I'd be happy to take that back to our members and make the kind of a survey request for that. I don't have any data here to share with you today on the number of months past 12.

Thank you. Assemblymember? I do know that Bank of America, for example, announced that they would potentially do up to 36 months. In our communications with our constituents, we don't know of anyone that's actually been offered that or utilized it, but there have been announcements made that there could be further, forbearance granted.

Very key point. The ability to do something and actually doing something are two very different approaches. Right? And I think what the Assembly member is trying to accomplish here is ensuring that folks have access to that forbearance, not the appearance of a path but with a roadblock at the beginning of that path. So I do appreciate the Assembly member's attempt as it was expressed by the committee.

A lot of thoughts and concerns to be addressed. And with it having an urgency clause, I think he will have to work overtime to ensure that not only the bill gets through the process but also is fitting and fair and clear to benefit the residents that have been impacted through this horrific fire. With that, Assembly member, would you like to close?

Thank you for that, Mister Chair. Appreciate the discussion and all the comments and respectfully ask for an aye vote at the appropriate time.

Thank you. Madam secretary, let's call the roll. Oh, do we have a motion and a second? Thank you. Do we have a second?

Second. I'm here.

Scared me a little bit.

Sorry. Madam secretary, let's call the roll.

AB 1847, Harabedian. The motion is do passed to the committee on judiciary. Valencia?

Yes.

Valencia, Aye. Chen?

No.

Chen, no. Dixon?

Fong? Krell?

Aye.

Krell, aye. Michelle Rodriguez?