Our house in California burned down. Our mortgage did not

By Rachel Jonas and Robert Fagnani, especially for CalMatters

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We were supposed to celebrate our younger son’s first birthday in our backyard on January 11, 2025. Instead, four days before his party, we watched the Palisades fire take over our home. We packed up what we could, put our kids in the car and drove to Tennessee to live with family because there was nowhere else to go.

Our house is gone. Our older son’s kindergarten is gone. The library, the restaurants, the small everyday things that make up life are gone. What’s left is a mortgage on a property that no longer exists and a recovery process that every expert we spoke to said will take two to four years, minimum.

We didn’t expect to become lawyers. But in the months after the fire, we kept running into the same impossible questions from other families—questions about forbearance, credit, and what their mortgage servicer was actually supposed to do. No one had clear answers, so we founded Disaster Mortgage Relief and we’ve spent the past year listening to hundreds of families in the Palisades and Altadena who are navigating a financial system that simply isn’t built for what we live through.

This experience leads us to Assembly Bill of 1847. The California Bankers Association recently said that this bill — which would expand and strengthen mortgage protections established under last year’s Fire Emergency Mortgage Relief Act, AB 238 — may end limiting access to credit.

We want to engage with this because we think it almost completely reverses the situation.

AB 238 gave people whose homes burned down up to 12 months of mortgage forbearance. But the recovery timeline in Palisades and Altadena is not 12 months. Debris removal, utility restoration, insurance disputes, permit approvals, contractor shortages and construction inflation have made this a multi-year process for nearly everyone we work with.

The original tolerance framework was built around a recovery schedule that doesn’t actually exist. Now, as fire survivors’ grace periods expire, we’re seeing the consequences in real time: Families who were current on their mortgages before the January 2025 fire—who followed every rule—see their credit scores drop 200, 300, even 400 points.

Some are being pushed into foreclosure. Some are given balloon payments of $100,000 or more, due just as they are trying to finance construction.

This is not a story about irresponsible borrowers. These are teachers, small business owners, young families who made these neighborhoods what they were. Most are still desperate to get home. But financial pressures are forcing many of them to leave for good.

We understand that lenders need predictable rules and functioning credit markets. California cannot solve one crisis by creating another. But the greater threat to future lending is not temporary forbearance; it’s mass borrower defaults, collapsing credit, abandoned redevelopments and neighborhoods that never recover.

AB 1847 does not forgive debt. It does not eliminate the lender’s rights. It does not tell the banks that they will not be paid. Allows payments to be deferred during repayment and moved to the back of the loan.

The CARES Act, which gave borrowers federally backed mortgages up to 360 days relief during the COVID-19 pandemic have shown that such structures are operationally feasible on a national scale.

For many families, forgoing two or three years of principal and interest and applying that money to construction is the difference between recovery and leaving for good. It does not require taxpayer money; it simply restructures debt that already exists so that families have a realistic chance of returning home.

In our case, my family is still in Tennessee saving every penny we can I hope so to afford to rebuild the home we lost.

Climate events are no longer temporary and localized. They wipe out entire communities at once and displace families for years. The financial infrastructure around home ownership needs to catch up to this reality.

The question for California is simple: When disaster survivors are trapped between a ruined home and a mortgage system that no longer matches the modern recovery, will we force families into financial collapse or adapt the system to the world we now live in?

This article was originally published on CalMatters and is republished under Creative Commons Attribution-NonCommercial-No Derivatives license.