Senate pushes bill that would give disaster victims six months of mortgage relief as they rebuild

A new bill, introduced in the Senate on Thursday, aims to give natural disaster victims at least six months of mortgage relief – which comes as more Americans experience damage and loss from natural disasters and severe weather.

Under the “Mortgage Relief for Disaster Survivors Act,” homeowners with federally-backed loans located in areas declared disaster zones would be able to seek relief from paying mortgages for 180 days without accumulating interest or penalties.

The legislation also gives people an opportunity to apply for a 180-day extension.

Mortgage payments do not automatically pause in times of disaster. Those whose homes are destroyed or damaged can request their mortgage servicer to forbear their payments temporarily. But the uncertainty around mortgage forbearance can add more stress during a fraught time.

Democratic Senators Adam Schiff of California, whose state sees deadly wildfires every year, and Michael Bennet of Colorado, whose state experiences wildfires and severe flooding, co-sponsored the bill.

In a statement, Schiff said families in Los Angeles that were impacted by the wildfires in January are “still struggling” to rebuild from the disaster.

More than 9,000 homes were destroyed by the blazing fires that destroyed parts of the Pacific Palisades, Altadena, and other neighborhoods in and around Los Angeles.

“As natural disasters become more frequent due to climate change, it is critical that we pave a path to stability for homeowners in times of crisis,” Schiff said, adding that the issue impacts Republican-led and Democratic-led states.

A near-identical bill was introduced in the House of Representatives earlier this year.

Bennet’s home state has also experienced its fair share of wildfires and other disasters.

Residents in Boulder County lived through the most destructive fire in Colorado history in 2022 when the Marshall Fire broke out, destroying at least 1,000 homes and hundreds of other structures.

“Coloradans know all too well how difficult it is to pick up the pieces and move forward after catastrophic wildfires,” Bennet said in a statement. “When mounting financial and emotional costs of recovery weigh on families, they should be able to take time to put their lives back together and rebuild their homes.”

Mortgage delinquencies rise in the wake of a natural disaster, data from the Mortgage Bankers Association shows.

In the fourth quarter of 2024, the delinquency rate rose six basis points from the third quarter and 10 basis points from the same time the previous year.

The largest quarterly increases occurred in Florida, North Carolina, South Carolina, and Georgia, all of which experienced devastation after Hurricane Helene struck in September.

The bill is endorsed by the Consumer Federation of America, National Consumer Law Center, National Low Income Housing Center, Consumer Watchdog, National Housing Law Project, and more.