Assembly Banking And Finance Committee

Good morning. Buenos dias. We will now call to order the Assembly Committee hearing of Banking and Finance outcomes review of AB238. And before we get started, I'd like to ask the President of the Pasadena City College board of trustees, Mr. Stephen Gibson, to give us a welcome and thank you for hosting us today.

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Thank you. President Gibson would like to start by giving some brief remarks and share some of the work that the Committee and I, myself as Chair, have done in collaboration with Assemblymember Harry Bideon on this extremely important and critical topic. In recent years, California has not only seen an increase in frequency in natural disasters, but an increase in the magnitude of devastation Immediately following the outset of last year's firestorms. I, with Assemblymember Harbidian and key stakeholders, work diligently to find a path to stem foreseeable financial bleeding for the survivors. In my role as Chair of the committee, I grapple with the complications of asking institutions that provide much of the financial scaffolding to our communities and infrastructure to change their systems and adjust financial risk without a longer Runway. But I know in my heart that the displacement, loss and emotional damage suffered by families from these disasters is incomparable to the work that we have to grapple with. Assemblymember Harry Beatten and I, along with important stakeholders, have never stopped discussing how we can continue to support survivors and Californians across the state. The purpose of today's hearing is to hear from you directly, the survivors, the residents and people who have been through it, who are still going through it, and who have to live with the outcomes of our laws on a day to day basis. Your testimony is not merely anecdotal. It is the essential empirical evidence we need to inform and shape future legislative and policy decisions. It will guide us as we work to identify systemic failings and more importantly, to design and implement concrete, actionable improvements to California's disaster financial recovery framework. Before we begin, I want to thank all attendees today, the survivors in particular who have bravely come forward to share their personal struggles, the members of the financial community, and my colleagues on the committee in the State Assembly. I'd also like to be clear about today's objective. The goal is not to assign blame. This is not a session for finger pointing. Our collective focus must be on constructive engagement, transparent dialogue, and that's including the financial industry and the shared responsibility of identifying areas to for immediate and long term success and improvement in our systems. We are here to listen, learn and ultimately ensure that our recovery systems serve those they are intended to protect, the people of California. With that, I'd like to hand over the mic to Assemblemember Harry Bideon to provide some remarks as well.

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Absolutely. And thank you for those remarks. Assemblymember can't state the importance of this issue. Happy to be here on a Friday and not to shed light on the issue, but even though I do represent the happiest place on earth, let's make sure that Pasadena, Altadena and the surrounding communities that have been so devastated also have that type of happiness brought back to their communities as well. With that, we will move on to to the first portion of today's committee hearing which will be, in my opinion, what's most important, the presentations of our survivors. There are five in person and then three online testimonies. And with that we will have our in person testimony. Introductee join us.

Morning everyone. My name is Jonathan Wiedman and I, along with my husband Raymundo Baltazar, lived on Poppy Fields Drive in Altadena. We lost our home in the fire. And I just want to start by thanking you gentlemen for your leadership and your support. I know that when it was New Year's Eve, January 1, 2025, you didn't expect that for over a year you would be dealing with something of this magnitude. And I think that you have done an extraordinary job in this legislation and in your availability and your access and your team has been amazing. And I also extend that to our supervisor, to our congresswoman, Judy Chu, Kathryn Barger, Sasha Pettis. We've been well served and I know that the work isn't finished. It was a terrifying night, as it was for all of us. We were there with garden hoses until 4:30 in the morning trying to save our home. Everybody sustained extraordinary losses. And I'll share with you as legislators in Sacramento that my personal loss was substantial. My grandfather was a man named Goodwin Knight, and he was governor of California in the 1950s between Earl Warren and Pat Brown. I am the family historian and lost irreplaceable California history that burned in the fire. Photographs, correspondence, ephemera, and just a tragic loss for our family. You mentioned Disneyland. Papa was their opening day with Walt Disney. And the ephemera, the letters, the photographs, all perished in the fire. And everybody has a story like that to tell of what they lost. This event, the pain doesn't go away. It's with you every day. And it has become our second job to deal with trying to rebuild our home and rebuild our lives from this event. We're pretty tough guys. I think this is an extraordinary and resilient community, but it has tested all of our limits to a degree which I think none of us ever imagined. The financial challenges have been significant, and not just to us personally, but to the community, to businesses, and exponentially throughout the region. I think millions of people have been impacted by this in some way or another. For example, I lost my piano in the fire. I lost my tuner. Had 75 clients whose pianos burned. So she's lost her business space. And it goes on and on and on and on. So I want to thank you for your, for your efforts at this legislation because as a former banker, I was at Wells Fargo for almost 30 years. I was their head of their foundation here in Los Angeles. I am today in healthcare. I work for viacare Community Health in Los Angeles. And if I may say, at age 66, it's just in time to be around doctors every day. It's a great organization, a federal qualified health center. But as a former banker, I know, having gone through the mortgage crisis 2008, the forbearances and forgiveness around loans and modifications are not something that banks like to do. They don't make any money from them. They're complicated, they're time consuming and they're difficult. We called our mortgage company loan care division of Lakeview Mortgage just to get information about forbearances. And I'm sad to report that Everyone who we spoke with did not know what I was talking about, other than a. What is a traditional forbearance that requires hardship, that requires a lengthy documentation process and an approval, an approval. You have to be approved for a forbearance. I'm still pursuing that with them. And Assemblymember Haribeti and your team has been very helpful in trying to get their attention, because three or six months off for all of us in paying our mortgages would really go a long way to help us right now, because there's so many unexpected costs, so many things that come up every day that you have to write a check for. And I think that, candidly, as a former banker and who loves the profession, I think a lot of these companies have been obstructionist. They've not been helpful. And what you should be able to do is call your mortgage company and say, I lost my home and everything of my life, everything of my life in these fires. And there should be somebody on the other end saying, let me tell you how we can help you. And that has not been our experience. So my hope is that this legislation obviously continues and is strengthened and that the resources and the mechanisms are in place to ensure that everybody who lost their home has a fair chance at rebuilding and certainly supported by their mortgage companies. We have an opportunity right now to restore this community and to restore Altadena and the Palisades and the entire region by extent. And I hope that we can do that. I know that we can do that. But one of the components of that is mortgage relief is giving people a leg up, giving people a little extra room so that they can rebuild. So I thank you very much for your leadership, and I really, really mean that, because this isn't easy stuff. You're right, it is complex and it's hard work. But you will be carved on the Mount Rushmore of Altadena if you can do this. And you're on your way. So thank you very much and all the best and good wishes to all my neighbors and friends. I see some of you out there. We'll get through this. We will. Thank you very much.

I get it.

Thank you.

Chair.

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Thank you.

So good morning to all you guys and it's great to be here. And thank you so much, Chair Garcia and assembly member Herbertin, for your time and for all your efforts to help our communities. I came from West Hollywood where we reside now, but I have a standing house in Pacific Palisades where we lived for 16 years, my husband and I and our twin daughters. And our house survived solely because neighbors stayed behind and fought to save it. It's heavily damaged though. Our garage burned down along with 77 houses within 20, I mean 250 yards around us. And we had to dispose of all of our possessions that were in the house. Our Christmas tree though is still inside the house from December 2024. Just to keep it in perspective where we are all at in this process that's never ending. Fighting mostly our insurance companies. So our house is, you know, windows melted from extreme heat, roof tiles were compromised across the structure causing ongoing leaks and exposing the home to further damage over the course of the last 15 months. So Char, heavy metals, high levels of lead throughout the house and in our yard are still present. We are currently living in an apartment in West Hollywood as I said, with no clear timeline though for returning home due to the extremely prolonged insurance delays, solely due to our insurance insurers actions or inactions. To put this in perspective, again, you know, we have not moved forward at all and not one step forward making our house habitable or easing our substantial financial burden immediately after the fire. As all of us face this, finding housing was extremely difficult. Rental prices surged overnight in the first three months. We moved five times within from short term rental to short term rental. Now settling in this apartment where we remain today with again no clear timeline when we can move back. Therefore, we sought mortgage forbearance under AB 238, expecting meaningful relief. However, our experience with bank of America was deeply disappointing and confusing. On multiple initial calls, representatives were not even aware of the bill. This was in December 2025. It took several days just to reach someone who understood the program. First of all, when we finally did reach that person, we were told something that directly contradicted the intent of the bill. Several things that we had to undergo an extensive financial qualification process, that we would owe a lump sum at the end of the forbearance period or alternatively, accept a loan modification that would increase our monthly payments. So this is not relief. This is restructuring of debt under pressure, benefiting solely lenders, not the survivors. We expected a model similar to pandemic era forbearance. Payments paused and moved to the end of the loan with original terms preserved and no compounded interest. That is what real relief looks like, and this is how it should look like for these two communities. Instead, we were met with confusion, inconsistent information and terms that would ultimately worsen our financial position. So that time we decided against it. However, we're now facing a severe financial cliff at the moment. Our additional living expense coverage will run out in August. There is no realistic scenario in which our home will be repaired by then. That means we will soon be forced to pay both rent and our mortgage simultaneously, effectively almost tripling our housing costs due to the high cost of the rental. At the same time, we are in an ongoing dispute with our insurance company. Even under the best outcome, we expect to face a shortfall of approximately $200,000 just to complete necessary repairs on our house. The situation has created constant uncertainty and stress for our family. We're doing everything right and still falling behind. AB238 was intended to provide relief, but in practice, it is not being implemented in a way that delivers that relief. The solution is not complicated. We already have a proven model, the pandemic era mortgage forbearance framework, which gave people stability during crisis without pushing them deeper into financial hardship. Relief should be simple, clear and consistent. No lump sum payments, no forced loan modifications, no increased monthly obligations. Clear and consistent implementation across all mortgage servicers. Homeowners recovering from this immense disaster don't have the capacity to fight banks, insurers, city building departments, all at once. They're not asking for special treatment. We're asking for fair chance to rebuild our homes and our lives. And thank you so much for all your help and what you're doing on this issue.

Do my best to stick to the four minutes. Good morning. My name is Tim Nayer. I'm a homeowner in Altadena. My wife and I had our home taken from us by the Eaton Canyon fire. I'm here today to report that U.S. bank appears to be in direct violation of the California law, specifically AB238 and I'm asking for the board's help. After the fire, we requested mortgage forbearance as we were entitled to under the law and US bank granted that forbearance. But the law requires more than that and on three specific points. The bank is simply not complying. First, credit reporting. AB 238, section 3273.23 states that a mortgage servicer shall not report to credit agencies that a borrower is in forbearance. U.S. bank sent us letters confirming they had done exactly that. When we filed a complaint with the Consumer Financial Protection Bureau, the bank gave us contradictory answers. One said the reporting had occurred, another said it hadn't, and a third said the law simply doesn't apply to them. This is not a resolution. That is confusion used as a defense. Second, lump sum repayment. AB 238, section 3273.24 states that a lump sum repayment shall not be required for borrowers who were current on their mortgage when forbearance began. We were current. Yet US Bank's letters repeatedly confirmed that when forbearance ends, we will owe all suspended payments at once. Again. When we raise this through the CFPB, the bank's response was that AB 238 is a, quote, general statement that does not override their internal requirements. The law is not a suggestion. It is the law. Third, interest accrual. AB238, section 3273.23 states that no late fees shall be assigned shall be assessed and no default rate of interest shall be charged during forbearance. Our statements show interest is accruing when challenged again, the bank responded that any accrued interest rate reflects the rate agreed upon at origination. That answer doesn't address the question, it deflects it. In summary, U.S. bank has told us in writing and through the CFPB process that they do not consider California state law AB 238 binding on their operations. They have simply given us contradictory information on all three issues. They have left us wildfire survivors trying to protect our home. And our credit. Without clear answers or legal compliance. We have done everything right. We filed complaints, we made calls, we sent letters. I researched the law, I informed them of the law. I even cited Supreme Court cases multiple times. I also have a day job and this isn't it. The bank's response has been to contradict itself and dismiss the law. I'm asking the board to take action to formally raise this issue with the California Department of Financial Protection and Innovation. To contact US bank directly and and to ensure that other Eaton fire survivors are not facing the same violations. We trust the law will protect us. I'm here today because it doesn't appear to be working. I'm asking you to help make this work. Thank you.

Next we have Lucius Babeck. Welcome.

Excuse me.

Thank you. Now we will move on to the online testimony. First to provide. Ms. Rachel Jonas, Welcome. Can you give us one second while we lifted the volume up?

Can you test the mic? Ms. Jonas, Speak into the mic one more time, please. One more test, please.

Perfect.

Okay, great. So I am joining you today from Franklin, Tennessee, where I am currently living with my family to save every dime that I can so that I can hopefully be able to afford to rebuild the home that I lost in the Palisades fire. My family and I were dropped from our insurance company two months before the fire and we are extremely underinsured. I moved to the Palisades in 2021 with my husband and my newborn baby. We had our second baby about two years later, and we were supposed to celebrate his first birthday in our backyard with our family on January 11, 2025. But his first birthday party never happened. We lost our house, we lost our older son's preschool, virtually all of their activities, our library, the restaurants we'd go to, and more. We picked up the very little that we had and came to Tennessee on January 9th. We didn't have anywhere else to go, and we're still here today. So in the aftermath of our loss, my husband Rob and I co founded an organization called Disaster Mortgage Relief. And this wasn't because we had planned to become advocates, but because we were drowning in impossible financial questions. And we realized that if we were struggling to get answers, then thousands of others were as well. And so what I'm sharing today comes both from myself living this directly and from spending the past 14 months listening closely to hundreds of other families who are living it too. And I want to start with something simple that I think sometimes gets lost in the policy language, which is that these are people who did everything right. They bought homes, they paid their mortgages faithfully, they maintained their insurance, they're responsible homeowners. And then, through absolutely no fault of their own, they lost everything in a matter of hours. And so what they're facing now is not a financial crisis of their making. It's a structural mismatch between the pace of disaster recovery and the financial systems that were never designed to accommodate it. And what that looks like in practice is the following. So rebuilding a home in the Palisades and Altadena is not a six month or one year project. It is realistically a two to four year process. And for many families, including those in condos or mobile homes, even longer things like debris removal, permitting, contractor availability, code upgrades, building for insurability, waiting for the city to revitalize critical infrastructure, dealing with HOA boards. Every single step takes time. And that timeline keeps changing for us. So during all of that time, families are paying for somewhere to live. Many are paying rent in markets that they did not choose, far from the communities they love. And some, like myself, have relocated out of state entirely just to make the math work while the rebuild happens. And so now that we're a year out from the fire, most people's additional living expenses are running out, meaning insurance won't cover their rent anymore. And at the same time, their mortgage payments continue on a home that doesn't exist. And insurance proceeds, even when fully paid out, are typically designated for reconstruction. The materials, the labor, the code upgrades that now cost more than anyone ever thought they would, there is no cushion left over to simultaneously service debt on a destroyed property. So AB238 was meant to help, and in some ways it has. But what we are hearing from families is that the relief that it promised is not always being delivered the way it was intended. And for example, many borrowers who we've talked to have received a wide variety of explanations and guidance from their lenders about what AB238 means for them, or if they can even use it. And you've already heard some of those stories today, and there are many, many more like that. Some servicers are offering forbearance and then structuring the deferred payments as a balloon due in full at the end. And so many families are suddenly and often unexpectedly facing a payment of upwards of what could be $100,000 at the exact moment that they're trying to figure out how they can even start to consider how to pay for construction costs. And so for those who forego the balloon payment and decide to restructure their loan, so in other words, move their payments to the end of the loan, they are often faced with a massive credit hit. We're hearing from survivors in a survey we ran who did everything right, and they're watching their credit scores fall upwards of 2, 3, even 400 points. This could not happen at a worse time as people are trying to rent homes or trying to take out loans for construction. These are people who were current and responsible before January 7th, and they should not be penalized for surviving a disaster. Every month that passes without a clear structured fair path forward is a month that makes it harder for those families to hold on. This is extremely urgent. I cannot stress this enough. And when these families cannot hold on, so when their financial pressure becomes too great, they don't come back. And we know this also from the surveys we have run that now that people are running out of their one year of mortgage forbearance provided by AB238, they are facing an enormous financial stress. And many of them are now forced to leave the Palisades in Altadena forever. And by the way, those who are most impacted are the teachers, the small business owners, the neighbors who made these communities what they were. They're the ones who are going to disappear. And that damage to the community will outlast the physical damage by decades. And so these families are not asking for a bailout. They're asking for a path that matches their reality. Defer the payments during the act of rebuild, allow the deferred payments to be incorporated into the back of the loan rather than a balloon payment and protect their credit scores while that happens. This approach gives families access to significant near term rebuilding capital which could literally help them fund the gap to be able to rebuild their homes. Many of these people are not in a position to take on new debt right now. And so this is a really meaningful strategy to help them. And this approach, which could unlock again a significant amount of money for each homeowner, is cost neutral, does not use taxpayer dollars, and is simply done by re engineering the existing debt that people already. It's a solvable problem. The CARES act during COVID showed us it can be done. We have the precedent, we have the framework. What we need now is the will to extend AB238 and make sure it works the way that it was meant to. These families want to come home. Please help them get there. Thank you.

Good morning. Can you hear me okay?

Good morning California assembly members. My name is Carlos Valdivia. I'm a Pacific Palisades resident who lost his family's home of 60 years in the Palisades fire. And I'm at risk of financial ruin despite doing everything right as a borrower and a policyholder first and foremost, thank you for passing AB238. My family participated in AB238. We had a good experience with our lender, Morgan Stanley, who followed the law and placed our 12 month forbearance at the end of the loan. Now, AB238 provides much needed relief for wildfire and Palisades fire victims as we navigate the increased cost and financial challenges of rebuilding our homes. We're dealing with insurance companies that refuse to acknowledge the actual cost of rebuilding our homes in the Palisades. And they're using delay tactics to refrain from releasing funds that are within our contractual policy limits. For many of us, and through no fault of our own, we are underinsured and lack sufficient coverage to build our homes. As insurance companies denied coverage and drop policies for fiscally responsible homeowners over the past several years. Unfortunately, many Palsadians don't qualify for relief under the Governor's Calcist Mortgage fund because our loans exceed the 2025 conforming loan limits for Los Angeles County. We carry responsible underwritten loans. We use a substantial amount of our savings as down payments to acquire our homes, reflecting the extremely high cost of real estate and the Palisades, you know, and we loan payments in full and on time prior to the Palisades fire. And we continue to do so. The 12 month mortgage forbearance granted by lenders and governed by ABP 38 is ending or has ended. For many Los Angeles fire victims like my family, we are at significant risk of draining what remains of our lifetime savings and having to take on construction loans to rebuild our houses. As insurance companies are unwilling to release our full contractual policy limits that are sorely needed to meet the high rebuild construction costs in the Palisades. Our only means of reprieve is by extending the 12 month loan forbearance to 36 months by passing AB 1847. AB 1847 reflects thoughtful leadership and a clear Understanding that recovery is going to take several years, not months, and it'll provide very much needed relief for survivors of the Palisades and wildfires that are seeking to rebuild their houses, their lives. We're not asking for loan forgiveness or permission to skirt our financial obligations. Instead, we're merely asking for an additional 24 months of loan forbearance to conserve resources and provide some financial reprieve as we continue to navigate the significant challenges of rebuilding our homes. Loan amounts would continue to be deferred and added to the end of the loan, and they'll be fully repaid when the loan matures, is refinanced, or the borrower sells their house. Lenders will be made whole, and we're only asking for the same thing to be made whole by being able to rebuild our homes and restart our lives. I respectfully urge you to put forth every effort to get AB 1847 passed through the California legislature. Legislature and signed by Governor Newsom as soon as possible. AB 1847 is our only means of reprieve. And as we move forward trying to build our homes, given all these financial difficulties, we honored our financial obligations before the fire and are committed to keep doing so. We're simply asking for the time necessary to recover and rebuild. Without action, many of us will be forced to sell our properties and abandoned, rebuilding altogether, permanently displacing longtime, long standing members of our community. Thank you again for your continued commitment to helping all Los Angeles fire survivors move forward with rebuilding our homes and their lives.

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Thank you.

Thank you, everyone, for taking the time to listen to us and thank you and help us advocate for financial relief that our community really needs. My name is Alicia Cohen. I'm a mom of two young children. My son Leo's five. My daughter is two and a half, which is crazy to think. She was 18 months at the time of the fire. And by the time we move back, I, you know, she'll be in elementary school. I was also a real estate agent whose business was rooted in our community. And not only was our personal lives uprooted, but my income was severely affected as well. And like so many others, we were severely underinsured and we lived on Livorna Drive in Marques Knowles. It was a quiet family neighborhood where kids ride bikes. Neighborhoods, neighbors knew each other and many families had been there for decades. It's a community made up of many working families, retirees, and longtime residents. The Palisades is really a diverse community and I think that's something that doesn't get enough attention just out there in the world. And Marquez really did reflect the diversity of, of that. One of the biggest reasons we chose to live in the neighborhood that we did was the public schools and sadly, our elementary school, which is walking distance from where our house was also burned down. And we never, when we bought our house, we never thought we were going to be able to afford it. But an opportunity came up in early Covid that allowed us to make that move. It was a risk, but we felt it was a smart investment and it was our nest egg and sorry. And it was a home where we felt we could have our kids grow up and feel safe. And we did stretch financially, but we believed in what we were building. And our house is not a luxury home. It was a 1950s mid century and it was everything to us. And on January 7th, we lost it. And the day of the fire, I was actually in the ER getting stitches, unrelated to the fire, but I was never able to go back and I left with nothing. All I had were clothes on my back. And at the time, all I cared about was just getting my kids to be safe and getting them to be with us.

we just didn't even know what kind of financial pressure was going to build on us after the fire. And the financial realities is we're going to be due for a mortgage on an empty lot. We have a limited loss of use. We also have to rebuild everything. Oh, sorry. I. I understand. My network connection is not good. Can I, can everyone hear me?

Okay.

And my income was also disrupted. And there's no version of this where the numbers make sense. This isn't a one time hit. It's ongoing. Every month. The pressure compounds. Every decision feels like choosing which obligation we can't meet. And our savings are running out and we don't know how much longer we can keep this up. We're paying for housing while still carrying the weight of knowing that our mortgage is coming up. The clock is running out and we have a major gap in what our insurance has given us and what it'll cost to rebuild. And we're already seeing many of our neighbors forced to sell their lots at depressed values. And it's our greatest fear that that will become us, especially knowing that is our nest egg. It was our primary asset. It was our safety net and we hope to pass it down to our children. Losing it was just not something that we even thought could happen and it could put us in financial ruin. And we always paid our mortgage on time. As Rachel said, you know, we were responsible lenders, sorry people that took loans. And now we're faced to be in a situation where we may not be able to continue but and forced to have our credit scores impacted. AB238 did give us breathing room at a moment when we had nothing. And continuing it is really the only real path for us to continue and have a chance of coming back. And if not, we'll be forced to sell our lot again, a depressed value. And if we sell, we'll will have to be gone for good. And it's not fair that the only people that can come back are the people that have the resources. And we're not asking for loan forgiveness. What we're asking is for a restructure that will allow us to have the time that we have forbearance to be added to the back of our loan.

we're just trying to survive and to come back. So please give us an opportunity to come back and give us not just an opportunity to rebuild our home, but also to protect our financial future. Thank you.

Thank you, Chair Valencia. You want to hear me?

Wonderful. Thank you, Chair Valencia, Assemblymember Herabedian, members of the Banking Committee and everyone else for being here today. My name is Suzanne Martindale. I am the Chief Deputy Commissioner for the Department of Financial Protection and Innovation. The DFPI has a dual mission to protect consumers and foster responsible innovation in the financial marketplace. And we are here today because we regulate state licensed financial institutions, including banks, credit unions and mortgage lenders and servicers. I just want to start by saying that we are fully committed, as you all are here today, to supporting survivors of the fires as they seek to rebuild and recover from this horrible disaster that hit our state last year. Right away In January of 2020, Governor Newsom announced commitments from several major national lenders to offer LA Fire impacted homeowners forbearance relief for at least 90 days, as well as limitations on fees, negative credit reporting and foreclosures in the immediate aftermath. And here at the dfpi, we also worked with our state licensed mortgage lenders to secure similar voluntary commitments to forbearance for families suffering hardship and recovering from the fires. So AB 238, which was authored by Assemblymember Herabedian, built on these initial commitments to establish in law a right for LA Fire impacted homeowners to receive up to 12 months of forbearance relief. Following on that passage of the law in January of this year, the Governor's Office once again secured extended commitments from major national lenders to provide additional relief beyond the 12 months as homeowners seek to rebuild and return to the area during this next phase of our recovery. As part of the Administration's whole of government approach to supporting recovery, the DFPI rigorously responds to any Wildfire related borrower inquiries or complaints through a dedicated Wildfire Rapid Response Team. Since March of last year, we have received 300 consumer complaints regarding mortgage forbearance related issues primarily and more than 91% of those we have been able to resolve in the consumer's favor so that they can get the relief to which they are entitled. Now I'll take a brief moment to talk about some of the trends we've been seeing in the complaints that we have received from people impacted by the fires. At the dfpi, we have a consumer Services Office. This office engages with consumers, licensees and other financial service providers to facilitate the communication and try to assist people in the dispute resolution process. Complaints we've received have primarily focused on forbearance requests, folks seeking to get forbearance and maybe initially being denied having confusion related to how to navigate the customer service system at their lender or servicer. And we've also heard stories about issues related to withholding post loss insurance funds as well as funds initially being held in non interest bearing impound accounts. That is a matter that the legislature also took up last year and resolved through the passage of AB493. But those are the main trends we have heard from the complaints that we have received. So again, forbearance request issues, issues dealing with customer service at their lender or servicer post loss insurance withhold withholding and then sorry, fund withholding and then issues related to non interest bearing accounts where their funds are being held. So we've received these kinds of questions and have taken a white glove approach to navigating, helping people navigate the system if they report that they are being that they are trying to recover from the fires. So we have really worked very very hard and gone above and beyond wherever we can to talk to people on the phone. We've heard their stories. It's sad to hear the really compelling stories that our survivors have shared here today. And I can tell you that at DFPI we have heard very, very similar come directly to our department from survivors of the fires. We do have to note however, that there are some limitations to how far we can go with our legal authorities. So for example, if a complaint pertains to a federally chartered bank or financial institution, that doesn't really fall within our jurisdiction. So we have to take these complaints and file them with the federal Office of the Comptroller of Currency which charters national banks. And we also do route complaints to the Consumer Financial Protection Bureau. That said, we are clear eyed about the fact that at the federal level currently there has been a lot of scaling back of oversight of financial institutions. So even when we know that the federal regulator is the primary regulator, we know that there may not be a lot of success in getting the federal regulator to act. So we do continue to use our what we call our soft power to facilitate a resolution. We will pick up the phone and call national lenders. We will try to contact directly our federal partners after we've routed a complaint to make sure people are paying attention and really taking these complaints seriously. Because our team works really hard every single day to ensure that California consumers are not misled or subject to unlawful, unfair, deceptive or abusive acts or practices. We continue to come closely monitor these complaints to ensure that people are achieving the relief that they're supposed to get under AB 238 and other applicable consumer financial protection laws because people have committed to provide that relief. And we want to make sure that people receive the relief and the breathing space as some of our survivors aptly mentioned so that they can recover and we can see people return to their homes. And so with that, I will pause and thank you again for allowing us the opportunity to join you today and testify.

Right.

Absolutely. Mr.

So for, for the audience, we have at the DFPI authority written in our state's financial code under multiple laws to charter state chartered banks and credit unions, as well as license various lenders and servicers that handle mortgages. So we so our jurisdiction is rooted in California state law at the national level through the National bank act and other acts of Congress. There's a national regulatory framework that applies to the largest national banks and they are primarily regulated by the Office of the Comptroller of Currency, the National Credit Union Administration and the Consumer Financial Protection Bureau. So not to get too into the weeds around legal issues, but we, our jurisdiction can butt up against what's called federal preemption, where the federal government is the primary regulator and states may be challenged in how far they can go to seek to oversee national institutions. But that said, even where our jurisdiction may be limited as a technical matter, we still do go above and beyond when a California LA Fire survivor contacts our department. And we really do encourage people to go to dfpi.ca.gov, click on the Contact Us button and you can file a complaint online. You can also call us on the phone. You can even mail in paper if you would like. And we do look at every single consumer complaint that we get and take it very seriously if it's one of our state licensees. That's great. We've got people in our system. We can contact them. We have contact information. But also, again, even if it's a federally regulated institution where our jurisdiction, our legal authorities may be limited, we nonetheless do reach out anyway to educate the folks over there about the passage of some of these new laws to ensure that they are aware that here in California, folks have a right to some relief right now if they've been recovering from the so I do hope, Mr. Chair, that is helpful context.

Hi. Thank you. Can you guys hear me?

Thank you, Mr. Chair and Assemblymember Harabedian. My name is Vanessa Lugo and I represent the California Bankers association here today. I appreciate the opportunity to speak here regarding AB238 and its implementation. This legislation is the product of more than eight months of collaboration between the author, cba, and a broad group of lenders, all working toward a shared goal, and that's addressing the significant financial hardship faced by individuals and families impacted by the 2025 LA wildfires. First and foremost, we extend our heartfelt sympathies to those who suffered loss during these devastating fires. In the immediate aftermath, before any legislation was introduced, CPA took proactive steps by partnering with the Governor's administration to provide mortgage forbearance and options for affected homeowners. This early action reflects our commitment to delivering timely, meaningful relief when it's needed most. This emphasizes that lenders were already mobilized and assisting borrowers well before AB238 was enacted. Prior to passage, lenders remained committed to supporting homeowners, working closely with the bill's author to address provisions that conflicted with investor guidelines and contractual obligations. Mortgage servicing is not simply a matter of policy preference. It is a highly regulated function governed by federal law, investor requirements and detailed servicing standards. As conversations around implementation continue, it's important to recognize that any policy in the mortgage forbearance space must account for the diverse requirements of investors in the mortgage market and align with existing post disaster relief programs. These include programs offered by Fannie Mae, Freddie Mac and the Federal Housing Administration, the Department of Veterans affairs, and the USDA Rural Housing Service. Each of these frameworks is designed to evaluate borrowers on an individual basis, recognizing that financial circumstances vary significantly in the wake of a disaster. For these reasons, policies in this area should align with existing GSE and private investor loss mitigation frameworks rather than introducing new and conflicting and often confusing requirements. Clear and consistent communication with borrowers is essential. When policies diverge, they risk creating confusion, leading to unintended consequences and and potential financial harm for the very consumers we are all trying to support. It's important to note that automatic forbearance in times of disaster can have negative consequences to borrowers. Forbearance is not payment forgiveness, it is a payment deferral. While it provides short term relief, it can create larger financial obligations for borrowers later and sometimes worsening their long term financial position. Borrowers must still repay missed payments through higher monthly obligations, loan modifications or deferred balances, each of which can increase long term costs or create payment shock when forbearance ends. I understand the commitment or the Committee has an interest in receiving data from our members on the implementation of AB238. Unfortunately, CBA does not have the answers to those data points and does not collect data on behalf of our members. CPA is a trade association that by design advocates public policy and I've come prepared to address how we have been engaged on that public policy. I would defer to the regulatory to the regulator DFPI who we heard just before me, and they may be able to shed some of that light which they already have on some of those questions you asked of us. Lastly, CBA is aware of a desire to continue different forms of relief for the LA Wildfire victims as we have done in the past. We will continue to engage with the stakeholders and remain committed to working collaboratively to solve any problems. We appreciate this dialogue to better understand any compliance challenges associated with AB238 and to identify those issues in a thoughtful and detailed way. Thank you for the opportunity to share our perspective today.

Perfect. I'm on Indira McDonald on behalf of the California Mortgage Bankers association and joining me here for questions also is our Chief Executive Office Officer Paul Gilotti. Our members include non bank mortgage lenders and servicers. Thank you very much for the invitation to testify before you today on the outcomes review of AB238 and to hear directly from the families navigating the complex recovery journey while dealing with extraordinary loss and displacement. We recognize and acknowledge all those impacted by the fires and the families here today and thank you all for sharing your stories. Please know that at California MBA we understand the critical role Mortgage servicers play in providing stability during recovery. Our members have been working hard to find flexible and creative solutions for borrowers while still ensuring that they are following the law and the mortgage investor contract requirements. At California MBA, we take a firm stance on compliance and encourage our state regulators to investigate all reports of mishandling of loss mitigation applications and barriers to access and encourage swift remediation action for any violations of the law. Overall, California MBA member servicers have been actively engaged since the devastating fires and working to serve borrowers who are in need of loss mitigation relief. We remain fully committed to supporting the recovery. Today I will focus my comments on loss mitigation, on customer engagement and the industry's best practices practices when major disaster occurs like the devastating fires in Eaton and Pacific Palisades. I'll share some of the details and the step by step support system provided by loss mitigation specialists who are the professionals that offer the mortgage relief for the borrowers. I will also discuss how these professionals act as an intermediary between the borrower and the investor who holds the loan and owns a security interest in damaged or total loss property. When a major disaster occurs and a federal disaster declaration is issued, mortgage servicers activate disaster response protocols. These protocols focus on providing timely, compassionate and compliant relief while minimizing borrower confusion and preventing unnecessary foreclosure activity. Servicers maintain systems that monitor federal and state disaster declarations and immediately flag loans located in impacted zip codes or counties. Servicers immediately apply disaster status codes to affected loans in order to flag accounts for borrower outreach and follow any special program rules that may permit suspending late fees and prevent foreclosure activity as required. Standard best practice provides that servicers reach out early to borrowers in disaster zones with clear explanations of available relief timelines and next steps. Information should be accessible in multiple languages and through multiple channels. Proactive communication within the first several days of a disaster declaration may include sending the borrower outreach via phone, text, email, mail, and providing clear messaging around the disaster relief options that are available. Initial communication offers contact information for the borrower to reach loss mitigation team professionals to facilitate dialogue about the borrower's situation and awareness of the assistance available. When specialists interact with borrowers, our best practices include approaching the interaction with empathy and patience, recognizing that many borrowers may be displaced or experiencing trauma. Specialists must avoid presenting options in a way that pressures borrowers. Key initial questions can include understanding if the borrower is safe, if the property is damaged, and if so, to what extent. If the borrower is currently occupying the property, have they started an insurance claim and have they experienced income disruption? These questions guide the appropriate relief options which can include the AB238 forbearance relief specialists will explain the forbearance that forbearance may be the first line relief tool and they are to clearly explain what forbearance means, that payments can be paused or reduced the expected duration commonly 3 to 12 months depending on the program and the guidelines of the loan owner such as Fannie mae, Freddie Mac, FHA, VA, USDA, or a private investor. Those guidelines of the private investor specialists will also explain to borrowers that forbearance means payments are paused, not forgiven and explain how misfortune payments can be addressed through the resolution options, if that is including things like the payment deferral, a repayment plan or a loan modification and they are to explain if extended forbearance is permitted. Generally, forbearance documentation requirements are to be minimized and standard acceptable practices may include verbal hardship statements, self attestation of impact, and deferred documentation when appropriate. However, servicer specialists act as an intermediary and are required to ensure compliance with contractual investor guidelines, federal mortgage servicing rules and disaster specific regulatory directives and these obligations may require specific hardship statement documentation, borrower consent and certain resolution outcomes. During forbearance, specialists provide ongoing borrower support including regular check ins and best practice periodic outreach which can range from every 6090 days during forbearance to confirm the recovery progress, assess the settlement status and evaluate income recovery, et cetera, especially considering severe damage or total loss. Specialists are trained to escalate additional support as needed to assist with insurance claim coordination, estimate repair timelines, consider escrow implications and long term rebuilding factors. Specialists also escalate cases when borrowers report repeated documentation issue insurance delays that affect the repayment timeline, displacement if displacement is long term, and then of course if there's any report of abuse or fraud following the disaster. Furthermore, specialists encourage borrowers to work with HUD approved housing counselors whenever they are confused about options, face multiple financial hardships, are considering and certainly considering property disposition options in closing as we continue necessary support to borrowers throughout the rebuilding phase and as your committee considers new regulatory relief options. We remain fully committed to working with the committee and ask that any additional relief mandates imposed on servicers align with Federal regulatory investment requirements. As we've discussed, forbearance is a temporary financial bridge. It's not a long term solution. While it provides immediate relief, the deferred payments are not forgiven and must ultimately be repaid, often through the loan balance or a structured resolution. So extending forbearance without a clear path forward may unintentionally increase the financial gap for borrowers, making it more difficult for families to stabilize and rebuild once the the forbearance period ends. Keeping this in mind, we recommend the Committee consider longer term support relief solutions such as direct financial payment assistance, relief programming and additional funding assistance that does not have to be repaid by families who are in need of the rebuilding assistance. To address this, we encourage consideration of longer term collaborative solutions that provide a true pathway to recovery. One potential approach could include a state supported funding structure that operates as a silent second or a subordinate lien. Under this type of framework, deferred forbearance obligations could be satisfied in a way that allows borrowers to stabilize during rebuilding process while the state holds a subordinate position that is repaid once in a future refinance or transaction after the recovery is complete. This type of structure represents a meaningful partnership between the state and the mortgage industry, one that supports borrowers in rebuilding while avoiding additional immediate financial strains on families recovering from disasters. As always, California MBA we remain committed to working closely with the legislature and your committee and the assembly member to help shape effective policy. And we thank you very much for the invitation to testify today and we will be happy to answer any questions.

Thank you. Thank you for that, Mr.

Thank you per everyone for being here. Appreciate, appreciate the testimony. I'm going to start I think with DFPI just because I think that'll clarify some of the some of the questions I have for the lenders and services. So if Ms. Martindale is still with us, I was going to start with her and I wanted to get a sense. Okay. Ms. Martindale, are you, are you with us?

Can you hear me?

Sure.

Of course. So what I can say is, earlier last year, in the immediate aftermath, of course, the Governor did announce and sought to disseminate far and wide some voluntary commitments to forbearance relief and some of the other limitations on negative credit reporting fees and foreclosures with national institutions. We did our own outreach to our licensees and got many of them to agree to be listed on our website as publicly committing to similar voluntary relief. That was before the passage of AB238, and most of the complaints we received were before AB238. And even despite that not yet being in line, in effect, we were still able to get the vast majority of homeowners some relief. But there was an initial period of education where we might have heard from the C suite of one of our licensees who signed up and said, yes, we're committed to relief, but unfortunately, as a practical matter, the homeowner would be calling someone in a bullpen at customer service who said, I don't know what you're talking about. What is this new forbearance relief program? So there was an initial, somewhat understandable period of educational learning curve understanding what has been discussed in government about providing relief. Now post AB238 that is now in law, now in effect, we have shifted toward, as part of our administration of our laws and our oversight of mortgage licensees, to updating our own policies and procedures and using our key tool, which is to to examine the institutions that we regulate. We go in, we sometimes go on site in person and inspect the books, listen to consumer phone calls to determine whether our licensees are now going forward complying with the law, complying with those provisions, and we have work underway on that. And of course, if we do find that One of our licensees is not complying with AB238. That may result in a referral to our enforcement team. Then it goes to the lawyers and the investigators who would then seek to determine whether we have violations of the law that warrant us taking action. So we're in the early months of implementation and administering this law as well as the other laws that have already long been on the books to apply to our mortgage licensees to ensure that consumers are having their rights respected. But that is where we're still working through that process as the regulator at the state level.

Well, our consumer complaints are confidential, so I'm not in a position to name some specific names. However, I can say that we have seen a mix of both institutions that re regulate under California law as well as some of the largest nationally chartered financial institutions who have been. There are a few that I can say are repeat players. But it's a mix of state regulated and federally regulated institutions.

I'm not in a position until we have a public enforcement action to reveal the name because again, our consumer complaints are confidential.

Why?

There's no one, no one factor. I would say there's a mix of factors here. There is still a learning curve, although the learning curve has played out long enough and they believe that there's a better public awareness about the fact that here in California we are providing state level relief in codifying law related to forbearance and other limitations to give people that keen breathing space again in the early. In the early Weeks and months. Clearly word was still getting out about what the governor's office had negotiated, what our licensees had publicly committed to. I also should mention that we have a targeted outreach team and we've done what we can to make sure that people out in the public know that we exist, that we are a resource. It's also why I'm very grateful that you've invited us here today because we want people to come to us. We go to community centers and offer webinars and table at various various institutions and in public spaces to try to let people know that we are here, that we can handle complaints. We can try to connect consumers with the mortgage lenders and servicers to try to broker a solution. But we also know that as government, it's difficult. Not everybody knows that we exist. So we also do frequently partner with community based organizations who are the trusted voices in their communities. We have reached out directly to local organizations based in the LA area to make sure they have our materials so that they can also take tell people, hey, come tell DFPI what's going on. Because the more information we have about trends, particularly when it comes to an institution that's licensed by us, that gives us the signal, hey, we need to go in, we need to, we need to potentially examine one of our licensees and make that referral over to enforcement if we're seeing a violation. And as we develop more information and are able to share more publicly about what we're learning once we get through to an enforcement action, that will also help put people on notice about who's not following the law and what people need to be thinking about if they're mortgage lenders and servicers, to ensure that they are compliant.

Right. So what we get, and primarily through our consumer complaint portal, our portal is set up so that a consumer can log in, create an account, can write a narrative, but also attach and upload documents so that we can actually see hard evidence of what they're receiving from their lender or servicer. And again, of course, we have to protect everyone's data privacy and all the rest. Which is why, you know, we are very, very careful about how we handle those, those documents and that information. But that helps us get what we need. So we can turn over and contact one of our licensees, for example, and say, hey, you know, we're hearing from Consumer X. Here's what they're sharing with us, here's the documentation they've provided. You need to go fix this problem. And that is how we try to facilitate a solution. And so that's the primary way that we're making sure that and as we need to, we can escalate. We have developed strong contacts so that if we need to, we will call. You know, We've called the CEOs of some of our licensees to say, hey, we're hearing from this consumer that they can't get a forbearance. It looks like they should be eligible. So to please can you work on that? So we will also use our own process to escalate to upper management and leadership at our licensees to ensure that they are treating each and every one of these complaints with white glove service so that we can get people the relief to which they are entitled.

Yeah, the complaints before AB238 were largely related to not being able to get a forbearance or being told that at the end of the forbearance period there may be a lump sum payment. We've heard some, some of that referenced here today as well. And then also that that disaster relief funds were being held in non interest bearing accounts. That was a major theme that we heard as well where people were concerned that they're not getting the full benefit of the relief funds that they're hoping will help them rebuild. And so that's why, you know, AB238 and AB493 taken together being past, really provide some, some good protections and good tools going forward. Since AB 238's passage, we just continue to hear some confusion. I would say we are still hearing about confusion regarding whether there will be a lump sum payment at the end of a forbearance period. And so now we know that AB238 does address that. So we continue as the regulator to ensure that we are, through our supervision and enforcement tools getting compliance from our lenders and servicers to make sure they're following those laws and are clearly communicating to consumers what their rights are as required.

There we go. And then Paul can chime in. So as a trade association at California va, we have limited access to data. We do have access to public data and we often depend on the donation department as they license our non bank licensees. They collect annual data. Both annual reporting is to them on loan level data, which is exactly the data that you have requested. They also, all of the licensees at DFPI use a system, the NMLS system and they report quarterly and DFPI has access to that data also. And then DFPI can also do so surveys. If there's data points that they're not currently collecting, they have statutory authority under our licensing law to ask for additional data. And so the reason I'm saying that is to encourage additional dialogue with the department because as a trade association it's, you know, we get data if it's informally volunteered from our members and our members is a limited number of the licensees. The department has access and you know, they examine, as she said, they audit and they collect data from every single licensee across both non bank which we represent as well as the state chartered banks and credit unions. And so it's important, if you want a comprehensive picture, which I think is what is really important here is to get a comprehensive analysis through the Department. And so with that I would, if there's anything else you want to add.

Thank you for that response and clarity in terms of where we can actually access that information. So maybe if I could turn it over to the Department, if the committee were and will request that information, can the Department collect it and then can they make that information public so that we have a firm understanding of how many mortgage forbearance related requests due to the LA Fires are being processed.

Thank you.

I would, to answer that, I would say I do not believe our members are disregarding it. I would, you know, as Department had stated, it took a hot second for it to move through and for it to get down to the bullpen, if you will. When we were communicating recently with our non banking lenders, we, we asked what the protocol was and a lot of it seemed to be triggered based off of, you know, what FEMA was reporting as the natural disaster or the disaster zone based off a zip code. And we went through protocols with a handful of, we tried to reach out to our larger non banking lenders because they would have a much larger pool. Again, we support, you know, lenders in the state of California, large, medium and small non banking lenders and the protocols are in place, the protocols to, you know, respond diligently, to have outreach before they're being reached to and walk through

Thank you. So I think I referenced it in my statement and just wanted to repeat that, you know, CBA does not collect data on behalf of our members. So I don't have that information to share. But I do want to go back to what the regulator said. Susan, in receiving those 233 complaints, of which I believe she said 224 have been resolved. So that makes only nine under review. That's a pretty good resolution rate. That's an A minus rating. And I think that's a strong outcome and demonstrates that the bill is working effectively. But it also shows the value in providing clarity, especially during the times of crisis, to avoid that confusion.

Yeah, well during the process and the negotiation and eight months of compromise, Assemblymember, they were aware that those conversations were ongoing.

I'm not aware of any of them being out of compliance.

the

will,

Well, in regards to education, I'll answer that. You know, one of the pillars of the California Mortgage Bankers association is education. And we hold symposiums, webinars and conferences where we ensure that our members are participating and their understanding of new legislation that's been passed. Not only that, but at a board level, we also operate through the same crux, the advocacy that we have for the consumers and for what we do. And that's lending money to consumers that want to purchase homes. As non banking lenders, we're steadfast with ensuring that our members understand what the laws are and understand what regulation is. We partner a lot with the dfpi, et cetera. So we provide a huge amount of resource to our members. And it's not just at a C level, you know, executive. We work with, you know, individuals that run servicing, individuals that run underwriting, as well as technology and innovation within our organization. So that, that's something that we hold strong to us. And there's constant communication within the California Mortgage Bankers association and our lender members, our non banking lender members, about regulation, about AB20, you know, and all the proposed laws that are coming down the pipeline as well.

Right?

Got it. Yeah, yeah, I reviewed a lot of those. I mean some of the private ones, I haven't, I've never seen a lump sum payment being required as part of those guidelines. I've never seen negative credit reporting being required. And so I think going forward, what we're going to really want in implementing, you know, all of this, you know, whether it's 238 or 1847 that would extend it or whatever other solution. I think we really need a commitment here that the negative credit reporting stops. I mean, I think that people are trying to get, you know, I don't, I don't understand, you know, I really don't understand why a contractual obligation is being followed to do that. It's hurting your borrowers. It's going to really impair their ability to get other loans to rebuild. And it's really, you know, obviously something that you've heard today is a consistent problem. And I think the lump sum and those modification issues going forward, I think we're just going to need your commitment here today, both Ms. Lugo and the mortgage bankers to Stop doing that. I mean I don't know if we need a law, but I just think it's too much. So can you just, I, I mean can we get your commitment and Ms. Lugo, can we get your commitment to not do that going forward for the sake of the survivors?

Understood.

Right.

I would add also. So one thing in response that I think we can do and we can commit to today is to work with you in collaboration, hopefully with the federal agencies, the majority of non bank independent mortgage banks. We do government backed, that's our specialty. We do government backed loans and we are bound by those servicing guidelines. So we can't commit to something outside of those. And you are right, the GSC guidelines do provide the protection from the lump sum and I do believe that the borrowers who absolutely have the government backed loans should be getting that. And we support DFBI taking enforcement action if they're not for sure. So we can commit absolutely to talking to the federal agencies. Let's collaborate and work together in terms of if there needs to be some changes to the servicing guidelines under the extraordinary circumstances and time, you know, we're all here to collaborate and have those conversations.

I don't have at my fingertips the number of mortgages we have across bank, credit union and our non bank mortgage lenders and servicers. We at the state level license more than 400 institutions. So we would need to go back and get and see if we can get that data. We will continue to partner with you on seeking to get better answers about the status of of some of these requests for relief.

Okay.

Thank you.

People.

Why?

We need help.

Please keep your remarks to two minutes if you can.

We will.

So I am the president of Tahitian Terrace Residents association and I'm here on behalf of over 600 residents from three actually mobile home parks in Pacific Palisades that were completely destroyed in the January fires. This is about the only affordable housing community on the coast of California that houses essential workers, nurses, teachers, artists, actors. You know, AB238 was created to provide mortgage forbearance so that Californians impacted by disaster would not be forced into financial distress while trying to recover. But in practice, that protection did not reach everyone. I want to share what that looks like for our community. We are homeowners. We bought our homes, many of us over decades, investing everything we had. But because our homes are classified as mobile homes. Most residents do not have traditional mortgages. They have chattel loans, which are treated as personal property.

are very

And because of that technical distinction, we are excluded. Excluded from mortgage forbearance programs like cal assist. So today, families who lost everything are still required to make monthly loan payments on homes that no longer exist. And at the same time, they're paying for temporary housing and navigating insurance gaps and trying to figure out if and when they can return. So it's not like, I mean, we're in the same boat as everyone else. The problem is that we do not own the land.

So that outcome does not reflect the intent, the true intent of AB238.2 Homeowners can experience the exact same disaster. One in a single family home, one in a mobile home, and only one receives meaningful relief. The other is left carrying a financial burden with no safety net. And in communities like ours, that difference determines who can come back and who is permanently determined, displaced.

So when you review the outcomes of AB238, I respectfully ask the state to close this gap. Recognize chattel loans as eligible for disaster forbearance because these are homes, not vehicles. And just to point out SB996 might dovetail well with 238. 996 recategorizes mobile homes as real property might take a look at that require lenders servicing these loans to provide automatic forbearance in declared disaster areas and ensure programs like Callisys except explicitly include mobile home owners. Because if AB 238 is meant to protect Californians after a disaster, it must protect all homeowners, not just some. So we're just asking to be treated the same.

Thank you.

Hello, I'm Shane England, the Vice president of policy and advocacy at the California Community Foundation. Thank you for your leadership, assembly member Haridian and thank you Chair Valencia, for committing this critical conversation here in the Dena. CCF is committed to walking with fire survivors through recovery and rebuilding until everyone is safely home. We were really proud to support AB238 and stand firmly with survivors in insisting that it be uniformly implemented and very strong, strongly enforced. And we stand with community in calling for necessary extensions and expanded consumer protections. Survivors deserve and desperately need that relief, as we've heard clearly today. And survivors deserve accountability. I think another thing we heard very loudly and clearly today is a need for more and mandatory compliance reporting. The voluntary intermittent reporting that you've been asking for. Data. Everyone has been asking for data. Clearly voluntary intermittent reporting is not meeting the need to really see what's, what's unnecessary here. We also encourage all of you and everyone to really interrogate the claim that the small number of formal complaints to the state is evidence of success. I really humbly suggest and would encourage to talk to the folks here. And beyond what that is is evidence that struggling over stretch survivors actually don't know what their options are. I would suggest that most folks that we talk to don't even know that that's something they can and should do. So that's not a place where you're going to find good data. We urge the continued centering of community voice, including the wrenching testimony like that you hear today. And for every one story you heard today, there's 20 more that couldn't be here today, at least as any policy solutions are considered. And we stand ready to continue to partner with with each of you and with the legislature to ensure that that remains true. So again, thank you.

Hello, Mike Rothschild. We lost our home in Jane's Village in Altadena. We actually had a fairly smooth beginning of our escrow process with our mortgage lender truist. But that was the high point because everything since then has been an absolute nightmare of contradictory answers, information that is unreliable, threatening letters and people who have no idea what they're talking about. For our process, we've really been more concerned about what happens after our forbearance. And we have received so many different answers that listing them all here would keep us here all day. We at one point were told we could have a loan modification. We were then told we could not because we have no home to collateralize. We were then told we could if we filled out an application which was about the length of a phone book. We were then told we did not have to fill out an application, but we had to get approval from Fannie Mae because they were the holder on the loan. We called so many times, talking to different people who we had to repeat our trauma to every single time. Several of them did not seem to be aware that there had been wildfires in California. Which sounds nice. Finally, after almost a year and our forbearance about to end, we talked to a customer service person who said, I don't know how to help you. We then begged to speak with somebody in a management level and threatened to stay on the phone all day if we could not speak to someone. We did finally get the email address of someone who is handling our many, many complaints about escrow interest, about insurance, about delinquency letters that we received on the same day we were told our forbearance had been extended. At one point, someone from Truist said about the forbearance law and the escrow law that they follow the law on a case by case basis. That's not actually law. So what we're asking for is an enforcement mechanism that is robust and put some kind of fear into these companies because we can tell them what they need to do, which we did. We sent certified letters to our mortgage company telling them what they had to do for us. Without an enforcement mechanism, they're just going to keep doing what they're doing because there's no reason for them not to do so. So the laws are fantastic. There needs to be a stick with the carrot. Thank you very much.

Hello, my name is Darrell Moore. I just found out about this meeting at 10pm last night. Who is assemblymember Hera Beddyin? Thank you for doing this, sir. We need all the help we can get. My wife was born in Altadena. Her parents were the first black family that street on the west side when we were married. After our first daughter was born, we moved up here in 1996. We stayed in a back house at my mother in law's back house so we could save money to purchase our first home. That house burned up on Poppy Fields Drive. That was my wife's whole life. But in that time we finally saved enough money to buy our first house. In 2010 which was on Palm street, we lost our house. I tried to stay and fight it. My garden hose and wind blowing the water 90 degrees and not a drop got on the roof. After the fire, we evacuated. We never saw one fire engine, no city, nothing. Our lights and our power were out. Flash forward. We abandoned at 3:30 in the morning after a sheriff finally came down the street. It took us days to know when our house was, whether it made it or not. When we found out our house was gone, we had a friend that had a two bedroom one bathroom house which we stayed in, my wife and three kids for eight months. During that eight months time, we looked all over to find something suitable enough to house my wife and our kids. We finally, after being turned down over and over or too late or they never had any intention to renting to us, we found someone up in the Altadena to rent us the prices that we have to pay for rent. People immediately started price gouging the best we could do to get. I had a four bedroom, three bathroom house. So the best thing we can do is get a three bedroom, two bathroom house back up in Altadena so we could look, so I could be present to look at the rebuild of our house which still hasn't even taken place. Right now we've not any, nothing's happened. My mortgage increased. I'm paying more money for a house that does not exist. Now I pay $4,202 a month for that. My house that I, that I'm renting is just enough for me and my family to be in. I paid $6,000 for that house. I am paying $10,000 a month just for housing. Not electric bills, not food, not gas, not nothing. Now most of you would think if you're gonna spend $10,000 a month to live somewhere, it's gonna be in Beverly Hills, right? So we are struggling here. All of us have ptsd. We wake up in the morning thinking about it. We go to bed thinking about it. There's no relief. We're wondering how in the hell we going to come up with $10,000 at the end of every month. My wife is killing herself at work. She's working 14 to 16 hours a day. I'm an aircraft mechanic. All my tools Burnt up. What I've been able to contribute to my house, I can't do. My toolbox is extensive, full of tools that you just can't go into Harbor Freight and buy specialty tools. And I'm also a musician and I had a recording studio that was my other source of income. I now have no income. It's all on my wife. So anything that you can do, do it. But also make a bigger push to inform everybody in Altadena. Like I said, this is just a copy of a copy of a text that sent me here. We knew nothing about it on the west side, you know what I mean? So reach out to us. We'll support you if you, if you're trying to help us. We want, we want to be down for that. But man, look, we can't go through this people. It's too much. It's too much right now. It's too much. So thank you. Thank you for doing what you can do for all of us. But man, you know. Anyway, I'm done.

I stand with you. Mr. Moore, Mr. Morris, hello assembly member her and the team here. I am also thankful for Cecilia that did let me know from CCF about this meeting happening today. What you just heard from Mr. Moore is one in probably a hundred of those in the black community. We know that right now there is a civil rights decision discrimination investment investigation happening right now in regards to rapid response. Yes, there is discrimination happening completely in different spaces in regards to this recovery. And so my name is Heavenly Hughes. I am the co founder and executive director of my tribe Rise. I've been a 50 year Aladenian. We've been serving the black and brown community in several different affairs events that's happening happen in the Altadena Pasadena area. This particular catastrophe none of us were prepared for which I know we are all learning as we go. We do not want the support from our elected officials that's supposed to be. That has been presented as a way to help to be a harm. And what we have experienced in regards to this fairbearance forbearance is a harm because of the balloon payments. We've also. We are one of the first organizations that started to pay these balloon payments because we were very concerned about our black homeowners, our matriarchs and patriarchs that don't have the bandwidth to make all these phone calls call over and over again, send the letter saying that this is in place. You guys are supposed to follow these rules are in. What is the. I'm glad you brought up. Can you guys hear me? Because I want to be sure I'm heard. Wonderful. I'm glad you brought up. How are you all going to enforce this type of forbearance not to be a balloon payment? Because these mortgage companies are not, are not receiving the information where they're making changes accordingly. They are still holding our survivors accountable to pay these balloon payments. One of our survivors sent a bill showing that they not only was given a balloon payment but compound interest on that amount. So we were sold and I'll say that it was sold to us and we shared it to our community members that this is a good thing. It's a good thing to get this forbearance and then three to six months later it was a hard start. So we really appreciate you all looking into that. We send several emails to the mortgage companies or we try and assist our matriarchs and patriarchs to send this with your. To your mortgage company. But they are not responding. So when I heard. Who was that? Jane Lawson bring up today that mortgage companies are buying out. So there's second and third mortgage mortgage company is. It seems like they are dodging, diving and dodging these in these letters that say that this is what's supposed to happen. Assemblymember Harabinian these this is not the first catastrophe that sometimes is what's mind boggling to me. It's like this is not the first time that our California has experienced this type of catastrophe. These things should already be put in place. Three years on mortgage freeze or forbearance freeze, three years on being tax exempt, being able to receive tax exempt funds and grants. That's something else that we ask you to look into right away. Because those survivors that need instant emergency relief funding and that's what we need right now, they are going to be taxed on that money this year. That's what I'm understanding that if they receive funding through grants or through nonprofit organizations, that's over. I believe they said $19,000, which most people, when you just, you just heard Mr. Morris say he's paying over $10,000 in one month. So if we're trying to give funding that substantial to help people hold on to sustain until this new city, this, this new build happens, they can't be taxed on that money because that's also causing the harm. So there's several things that I feel that should be put in place immediately and of course that is the forbearance or mortgage freeze. There should also be a at least three years of no price Gouging when it comes to the rent, I believe you already addressed that. But we need these things put in place for at least three years, not us having to come back every month and say there's still price gouging. We still can't there the forbearance. Now they're going to ask us for money. This tax exemption that should automatically be in for three years as well. There's just certain things that should be already put in place because this type of catastrophe is not new. So one other thing I wanted to be sure because I heard you all talking about data and I'm concerned on who you're getting the data from because my tribe, Rise works with so many organ survivors, the black and brown. We use the word vulnerable. We want to be sure we're not using that too loosely because it's our black community that's at risk in Altadena, west side Altadena, of never returning due to these things that have been brought up. And when you someone mentioned today that there was only nine complaints not addressed when I got a host of complaints that I know are not addressed. So let's be sure we're reaching out to the most vulnerable when I say that the organizations that are also working with the most vulnerable. Thank you.

Thank you.

Thank you.

Thank you. Welcome.

I know times of consideration, so be very brief. Mr. Assemblymember, thank you to you and your team. They've been very helpful to me and my wife resolving or at least bringing up and discussing many of these issues. So I do want to say thank you. Some of them are here. Your staff's been doing great. So I just wanted I hope you understand that. Two to the, to the ma' am from the dfpi, she recommended the Office of the Comptroller of Currency. I did do that. They said it's not them. So to the person who said that there were nine complaints, I brought it up to the fpi. They said no comptroller. They said no cfpb. They said no. So by that definition, I have no complaints. Just glad to know that. 1 Finally, to the representatives who are here as part of the trade organizations for the banks, I'm seeing lawmakers trying to bring things and trying to work with the powers that they have. I hear people trying to honor their ends of the contract and they're saying, okay, but the banks are going, hey, this is what the law is. This is what we have to do. I'll ask there's nothing that prevents you guys from proposing a change or modification. And I'll ask you right in front of me, you guys are saying that you're here to help. Are you going to go back to your trade organization and you don't have to get all of them to agree. You can just get one or two and that helps a couple people and say, hey, can you go reach out to your people in this area and will you make a modification for them? And that's I'm not asking you to get everyone agreement. I'm asking you to go talk to Your banks, your members. Can you make a request when you guys talk to the banks, can you ask them? You don't have to get a law. Not everything has to be a law. And also doing a mortgage modification is perfectly legally fine today. And if you can ask them why aren't they willing to do it? The other man who says that they're, they're complying with the law, you can also do more.

Thank you.

Welcome and please keep your remarks.

I'm Kirsten. I am an altogether block captain. Like many of my neighbors, we lost our home the night of the fire. We have Rocket mortgage and they initially had no idea what we were talking about. But in recent months are more informed, have granted the forbearance but are not telling us what will happen when the forbearance ends. So it's likely that it will be a balloon payment. They've said there's a possibility that it will get deferred or amortized, but that leaves us not knowing what's going to happen. Our ale ends in October, could be about the same time that our forbearance ends and then we too will have a $10,000 a month payment that we cannot afford. I sincerely hope that you are able to hold the banks accountable and that the trade organizations are able to push for what is being requested.

in that system and so I think that the state needs a third way. We need another way to access funds that are going to carry us through at least till the lawsuit. So not forever, but for a number of years. I heard a couple of solutions presented today. We aren't able to access the CAL assist because of some areas of that which I'm happy to address at a later point. That could be a way is opening up more of that for residents or something else that takes the burden off of us. Don't have a lot of faith in the capitalist system. I do have more faith in our government. So help us out so that we don't have to continue to face the hardships that we do.

Thanks for holding this today.

I believe this is our last speaker. Welcome.

Hi, my name is Esther Lopez. I did not plan on speaking today. I wanted to catch Heavenly on her way out just to thank her for saying saving us. So when I'm a 52 year resident of Altadena. My family has been in Altadena since 1974 and we lost our home completely after the fire when we found out that there would be mortgage forbearance offering offered to several various lenders. We were lucky to jump on it because we do have JP Morgan Chase Bank. So we applied for the mortgage forbearance not knowing that we would have to pay a balloon payment at the end of the year. So around December 2025, they were calling me, they were calling my husband, they were sending letters saying you're due for a balloon payment. And our insurance payout was. We only had access to a certain amount of funds because our insurance payout was in a CD that we could not touch. We were doing four month CDs at the time. And Heavenly my tribe Rise. We were saved by a grant that we were offered by my tribe rise. It was Adopt a Survivor grant that we were selected for in December. Right. I think the week before Christmas which allowed us to pay that balloon payment because had it not been for the adopt a Survivor grant we wouldn't have, we would have had to borrow the money because we only had, you know, X amount of dollars in our checking account because we are trying to maximize our insurance payout by keeping it in interest bearing accounts. So I again, I had not planned on speaking today. I just wanted to thank Heavenly. And so now we're in the. So we paid the balloon payment. Now we're in the process of applying for the Calis mortgage and it's been. This is the second time we've tried to apply for it because they, they're asking, asking for explanation of all the zells that we received which were many because a lot of our friends and family didn't want to donate to our GoFundMe. They wanted to sell the money directly to us because they heard that GoFundMe takes a percentage of it or they just wanted to make sure that it went to us. Right. And so just a lot of, you know, requirements. We're almost there. I think we just each need to give them a vial of blood and then we'll probably be approved for it. But if we're not, then you know, the. Extending the forbearance is what we all need because I am nowhere near rebuilding. I haven't sat with an architect

you know, because I am shopping around for and vetting contractors to find out what we can rebuild because with the money I received for my insurance payout I could, I know for a fact that I could not rebuild what I had.

Assemblymember Harry thank you.

anything to add, Nothing to add, Mr. Chair. I just appreciate all the testimony that we heard today. Very helpful and instructive on next steps. And just thank you Mr. Chair and your staff for, for putting this together and all your work and support in these areas. So thank you.

It.