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Newsom proposes $125 million mortgage relief program for disaster victims

February 19, 2025

Gov. Gavin Newsom is forming a $125 million mortgage relief program to benefit victims of recent wildfires and natural disasters, tapping a legal settlement fund created after major lenders were accused of misconduct during the mortgage crisis nearly 20 years ago.

The mortgage relief program is designed for homeowners whose houses were damaged or destroyed by natural disasters and are at risk of foreclosure, Newsom said Wednesday, Feb. 19.

The proposal will be considered at a board of directors meeting Feb. 20 at the California Housing Finance Agency.

California homeowners, the U.S. government and 49 states agreed to the national settlement in 2012. Then U.S. Attorney General Kamala Harris secured $18 billion, penalizing lenders for robo-signing and other servicing and foreclosure misconduct. The mortgage servicers included Ally Financial Inc. (formerly known as General Motors Acceptance Corp. Bank), Bank of America, Citigroup, JPMorgan Chase and Wells Fargo.

CHFA received its last installment of $300 million as part of the settlement in 2019, according to Jay Wierenga, a spokesman for the California Business, Consumer Services and Housing Agency. Since then, CHFA has used the money to support the National Mortgage Settlement Housing Counseling Program, which reimburses counseling sessions for more than 78,000 households in housing agencies throughout the state.

The $125 million proposed for mortgage relief and counseling services is what’s left of the settlement fund, Wierenga said.

In his announcement, Newsom said the mortgage relief program would not affect the upcoming state budget beginning Oct. 1.

The money would be available to homeowners who lost their homes due to natural disasters since 2023, and would be administered by the CHFA.

Newsom estimated $100 million would be for direct mortgage assistance, with an additional $25 million used to extend an existing program that provides mortgage guidance on disaster assistance by the Federal Emergency Management Agency.

Last month, several lenders gave homeowners affected by the L.A. area fires a little relief on their mortgage payments.

Bank of America, Citi, JPMorgan Chase, U.S. Bank, and Wells Fargo and 420 state-chartered banks, credit unions, and mortgage lenders offered wildfire victims a 90-day forbearance of their mortgage payments, without reporting these payments to credit reporting agencies, and the opportunity for additional relief.

While Newsom didn’t share all the eligible disasters since 2023, he did mention several since last summer. They included last month’s fires in the Pacific Palisades and Malibu area and the Eaton fire in Altadena. Those fires — which destroyed over 16,000 structures — killed 29 people and burned a combined 37,000 acres in Los Angeles County.

“The governor’s proposal lays out the broad strokes of a program that is currently under development, so it would be premature to discuss additional eligibility details,” a spokesman for Newsom’s office said Wednesday.

The relief program also would be offered to homeowners whose houses were damaged or destroyed from the Franklin fire that burned more than 4,000 acres in Malibu on Dec. 9, 2024, in Malibu Creek State Park, and the Park fire in Northern California’s Butte and Tehama counties.

The Park fire ignited July 24, 2024, in Chico’s Bidwell Park — about 90 miles northwest of Sacramento. The fire, which authorities suspect was arson, became the largest wildfire of California’s wildfire season, and fourth largest in the state’s history.

In a related matter, more relief for fire victims came Tuesday, Feb. 18, when the L.A. County Board of Supervisors approved a six-month rent moratorium for tenants and workers affected by the L.A. fires.

Orange County Register

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Newsom proposes $125 million mortgage relief program for disaster victims

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