A year and a half after the Palisades and Eaton fires reduced entire neighborhoods to ash, the families who lost everything are running into a second deadline — not from the fire, but from their mortgage servicers.
Assembly Bill 238, the Mortgage Forbearance Act signed into law last September, gave homeowners whose properties burned up to 12 months of relief from mortgage payments. That clock is now running out for most survivors. The problem, fire victims and their advocates say, is that the law assumed a recovery timeline that has no relationship to reality. Debris removal, utility restoration, insurance disputes, permit approvals, contractor shortages, and construction inflation have stretched the actual rebuilding process in the Palisades and Altadena to two to four years for nearly everyone attempting it.
Rachel Jonas and Robert Fagnani know that gap firsthand. They lost their Palisades home in January 2025, four days before their younger son’s first birthday, and relocated to Tennessee with their children because they had nowhere else to go. The mortgage on a house that no longer exists followed them. The couple founded Disaster Mortgage Relief and have spent the past year fielding the same questions from hundreds of other displaced families: what their servicers actually owe them, how forbearance affects their credit, and what happens when the relief period runs out.
Now they are pushing Assembly Bill 1847, which would extend and strengthen the protections under AB 238. Los Angeles Mayor Karen Bass has separately asked mortgage companies to voluntarily extend relief by three more years, bringing total forbearance to four years from the fires — though that request carries no legal force and depends entirely on lender cooperation.
The stakes of inaction are concrete. Families who were current on their mortgages before the fires, who followed every rule the original law set out, are watching their credit scores fall by 200, 300, even 400 points as forbearance periods lapse. Some face balloon payments exceeding $100,000, due at the exact moment they are trying to finance reconstruction. Some are being pushed toward foreclosure on land where a house used to stand.
The California Bankers Association opposes AB 1847, arguing the extension could restrict access to credit going forward. It is a familiar argument in housing finance fights, and not without some basis — lenders do need predictable rules to keep credit markets functioning. But it sidesteps the more immediate risk: mass borrower failure, collapsing credit, and abandoned rebuilds that leave entire blocks of the Palisades and Altadena permanently scarred. A forbearance extension does not forgive debt or eliminate a lender’s right to repayment. It defers payments during active rebuilding and moves them to the back end of the loan, a structure the federal CARES Act already proved workable nationally during the pandemic, when it gave federally backed mortgage holders up to 360 days of similar relief.
What makes this fight worth watching closely is not just the policy mechanics. It is the pattern. California passed an emergency law in the immediate aftermath of a disaster, congratulated itself on the relief it provided, and then left survivors to discover — month by month, statement by statement — that the timeline lawmakers built into the statute never matched the timeline of actual recovery. The instinct to declare victory after the first bill signing is not unique to wildfire policy. It shows up across disaster response, where second-order consequences land on the people least equipped to absorb them, long after the political attention has moved elsewhere.
AB 1847 requires no new taxpayer spending. It restructures debt that already exists so families have a realistic chance of returning home rather than being forced out by a mismatch between financial paperwork and the physical reality of rebuilding a community from the ground up. Whether Sacramento treats that as urgent, or as last year’s story, will say a great deal about how seriously the state takes the people still living out of suitcases in Tennessee, waiting to come home.
— Jose E. Navarro, The Navarro Report / Human-Directed AI Journalism: Research, analysis, and editorial direction by the author. Drafted in partnership with Claude AI (Anthropic).
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