FACE, as member of CRC, joins other organizations to advocate for passage of AB2501 that will provide relief for residential mortgages, especially for those who have non-federal loans.
Please see below the highlights.
AB 2501 would expand relief options for Californians with residential mortgages. The CARES Act allows homeowners with federally-backed loans to seek hardship forbearance but it leaves out the approximately 30% of homeowners who have non-federal loans. AB 2501 closes this gap by extending similar forbearance options to all people with mortgages regarding structures of 4 or fewer units, including owner-occupied and leased units. Homeowners would be able to make a simple attestation that their hardship is COVID-related in order to obtain relief. Servicers would be required to evaluate the borrower’s ability to resume making payments after forbearance ends, while being able to offer a range of options to help people stay in their homes. AB 2501 also ensures that homeowners can enforce the law to stop a foreclosure proceeding if the mortgage servicer did not comply with providing forbearance and a repayment plan.
AB 2501 would assist property owners and tenants alike. AB 2501 would help ensure that people with multifamily mortgages have relief already available to homeowners in owner-occupied primary residences, but with protections to ensure that landlords receiving relief are accountable for sharing that relief with tenants. AB 2501 allows borrowers with mortgages related to structures of 5 or more dwelling units to request 180 days forbearance, plus additional 180 days if needed, provided that they document hardship. Borrowers must provide rent relief to tenants during any forbearance period and are prohibited from assessing late fees.
AB 2501 would also provide some relief from high interest rates on small-dollar loans. AB 2501 would reduce fees on payday loans from $15/$100 to $5/$100, and would require lenders to offer consumers repayment extensions.
More than four million Californians have already filed for unemployment, and yet the full impacts of the COVID-19 crisis have only just begun. Deeper financial hardship is likely to unfold and persist in the coming months. The Legislature must act now to prevent further harm and injustice to consumers and communities across the state. We need this proposal to move forward so that this important conversation can continue in the Senate.