With wildfires having recently swept through Los Angeles County, images of destruction are everywhere. Over 12,000 structures have been burned down, neighborhoods reduced to rubble and nearly 92,000 residents forced to evacuate.
As Angelenos come together to rebuild their city—and their lives—people across the nation are asking the same questions: What happens to financial responsibilities, like mortgage payments, when their home is destroyed?
This guide answers the most pressing questions for homeowners affected by natural disasters, drawing on resources and advice from FEMA, mortgage servicers, and disaster survivors.
Do You Still Have to Pay Your Mortgage If Your Home Is Destroyed?
Yes, even if your home is no longer standing, your obligation to pay your mortgage remains. However, there are relief options for homeowners impacted by disasters like the wildfires in LA.
Homeowners can request forbearance, a temporary suspension or reduction of mortgage payments for up to 12 months. This relief is available for loans backed by Fannie Mae, Freddie Mac, the FHA, and the VA. During forbearance, late fees are waived, and foreclosure proceedings are paused.
“Homeowners affected by a disaster are often eligible to reduce or suspend their mortgage payments for up to 12 months,” Fannie Mae stated in a recent press release. However, this relief is not forgiveness. Once forbearance ends, borrowers must repay the deferred payments, either as a lump sum, in installments, or by extending the loan term.
For those with private loans, options vary by lender. Major banks like JPMorgan Chase and Bank of America have also implemented disaster forbearance programs. If your home has been destroyed, contact your mortgage servicer immediately to discuss available options.
What Should You Do Immediately After Your Home Is Destroyed?
If your home has been declared a total loss, your first step should be to contact your insurance provider. Filing a claim as soon as possible can unlock benefits like temporary housing assistance and coverage for rebuilding costs.
It’s important to document everything. Take photos and videos of the damage, and keep all receipts for expenses like hotel stays, clothes, and pet boarding. Depending on your insurance policy, these costs may be reimbursed.
Barbour also recommends applying for disaster assistance through FEMA and the Small Business Administration (SBA). FEMA provides grants for immediate needs like food and temporary housing, while the SBA offers low-interest loans to homeowners and renters, even if you don’t own a business.
What If You Don’t Have Homeowners Insurance?
For uninsured homeowners, disaster relief programs can provide a vital safety net. FEMA offers grants to cover temporary housing, food, and other necessities, while the SBA provides low-interest loans of up to $200,000 for structural repairs and $40,000 for personal property replacement.
Nonprofits like United Policyholders also offer guidance to uninsured homeowners navigating recovery. Even without insurance, there are resources to help you rebuild, but the process can be overwhelming. Staying organized and seeking help is key.
How Can Residents Find Temporary Housing?
Finding temporary housing can be a challenge after a disaster. We’ve all seen the news surrounding limited rentals and price gouging in LA.
Often, many organizations will offer assistance after widespread disasters. Airbnb.org offers free, temporary housing to LA fire victims, and some hotels and apartment complexes provide discounts. FEMA’s housing assistance program is also an option, but it requires a state request to activate.
How Do You Cope Emotionally After Losing Your Home?
The emotional toll of losing your home can be as overwhelming as the financial strain. Survivors and experts emphasize the importance of seeking support, whether from counseling services offered by FEMA, local nonprofits, or community networks.
Recovering from a natural disaster is a long process, but you don’t have to do it alone. Document your losses, contact your mortgage servicer and insurance company, and apply for all available aid. With persistence and support, you can navigate the road to recovery.
It is important that we pray for and support the victims of natural disasters and offer a helping hand in any way we can as we are able.
Thanks for reading!
Brandon Yopp