Yesterday, Troutman Sanders LLP’s Consumer Financial Services Law Monitor reported that AB-2501, a proposed bill allowing for homeowners to defer their mortgage payments for up to a year, failed to pass by a narrow margin. The bill’s author, Assembly Member Monique Limón (D-Santa Barbara), quickly moved for reconsideration. However, as the Assembly has now entered its Summer Recess, that motion for reconsideration has lapsed, and the bill cannot receive another vote until the Assembly reconvenes on July 13.
If passed, the bill would have had far-reaching consequences for California homeowners and renters, as well as lending institutions. It would have prohibited lenders from taking any actions to evict homeowners during the year after the bill became active, and would have allowed homeowners a total of one year’s forbearance from making mortgage payments. Tenants renting from homeowners forbearing on their payments also would have received rent relief during the forbearance period.
The bill also would have granted relief to consumers owing payments on their cars or mobile homes. For instance, the bill would have banned repossession of such vehicles by lending institutions until January 1, 2023, except in specific circumstances. Plus, vehicle and mobile home owners could have opted into a period of payment forbearance for a total of nine months.
Troutman Sanders will continue to monitor the progress of AB-2501 when the Assembly reconvenes.