Sponsors (14)
The bill gives homeowners and some renters clear, flexible short-term mortgage relief after declared disasters—reducing immediate financial strain—while shifting cash‑flow and administrative burdens onto lenders, servicers, investors, and potentially taxpayers, and leaving gaps for those without documentation or for non‑declared disasters.
Homeowners with disaster-damaged federally backed mortgages can pause mortgage payments for up to 180 days and extend once for up to an additional 180 days (up to ~12 months total) without being treated as delinquent and without incurring extra fees, penalties, or additional interest beyond what would have accrued with on-time payments.
Homeowners can stop the forbearance at any time, letting them resume payments when able and avoid unnecessary or prolonged credit impacts.
Clarifies which loans held or securitized by Fannie Mae and Freddie Mac are covered, reducing legal uncertainty for lenders and servicers during declared disaster periods.
Lenders, investors, and holders of mortgage-backed securities may face delayed payments, cash-flow disruptions, and potential losses while interest and principal are paused, which could raise mortgage pricing, reduce credit availability over time, and impose costs that ultimately fall on taxpayers or borrowers.
Mortgage servicers will incur additional administrative burden to grant lengthy forbearances and process documentation, and those increased costs could be passed to borrowers via fees or reduce servicers' capacity to help other customers.
Requiring 'verifiable' documentation of disaster damage may delay or deny timely access to forbearance for disaster victims who lack immediate official proof (for example, displaced or low-income households), limiting the help available when it's most needed.
Based on analysis of 3 sections of legislative text.
Requires servicers to grant up to 180 days (plus one 180‑day extension) of forbearance to borrowers with federally backed mortgages on disaster‑damaged property, with no extra fees or penalties.
Allows borrowers with federally backed single‑family or multifamily mortgage loans on property in a Presidentially declared disaster area that was damaged or destroyed to request and receive an immediate forbearance. Servicers must grant a 180‑day forbearance upon a written request and proof of verifiable damage, allow one borrower‑requested extension up to 180 additional days, let borrowers stop forbearance at any time, and may not charge fees, penalties, or additional interest beyond what would have accrued under on‑time contractual payments during the forbearance period.
Introduced April 17, 2025 by Judy Chu · Last progress April 17, 2025