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What to do if Your Home is Damaged or Destroyed by a Wildfire

We understand that when a home is damaged or worse, destroyed by a wildfire it is very stressful. There is so much to think about and so many things that need to be done. If you find yourself in this situation our hearts go out to you.

Many of our friends, family, and even some of our staff have been directly affected by the recent wildfires in California and Oregon.

There are some important steps (related to your home mortgage) to take if your home is partially or completely destroyed by a wildfire.

Important Next Steps:

  • Contact your insurance company or agent.
  • Contact your current mortgage servicer.
  • Continue to make your monthly mortgage payments.

Typical Process for handling the insurance claims and repairs or rebuilding (may vary by servicer):

  • Provide the Insurance Adjustors Report to your servicer
  • Provide an estimate for the repairs or construction
  • Insurance Claim checks will be payable to the borrowers and the mortgage company
    • The borrower will need to endorse the check and mail it to the mortgage company
    • The mortgage company will control the distribution of funds to the borrower or contractors
  • The borrower needs to hire a licensed, experienced, qualified contractor (watch out for fraud, be sure your contractor is licensed) The plans must be detailed and specific. The plans for repairs or rebuilding must adhere to applicable codes and regulations governing residential repair or construction
  • The Servicer may require property inspections during the process
  • A final inspection will be required to ensure the completion of the work
  • A final lien waiver will be required to release the final disbursement and finalize the claim

Mortgage Loan:

  • Continue to make your mortgage payments
  • There will be no changes to your loan terms during or after the rebuilding process
  • If your income has been affected due to the fire, you may qualify for a loan modification
  • You will still need to make the escrow portion of your monthly payment (if you have one).

 

FHA Disaster Relief for Wildfire Victims

If your home is located in a Presidentially declared disaster area, you may qualify for the FHA 203(h) Disaster Relief Loan.

The FHA 203(h) mortgage may be used to finance the purchase of a new home with no down payment and favorable terms. If you plan on purchasing a new home, the new home need not be located in the area where the previous house was located.

Property Taxes:

Contact your county tax collector and see what relief options they can provide you to decrease your property taxes until the home is rebuilt.

Renter’s Insurance:

If you are renting a place to live while you rebuild, make sure to get renter’s insurance to cover your personal belongings.

Loss of Income:

  • Contact the Employment of Development Department (EDD) at Edd.ca.gov
  • Contact your mortgage servicer and let them know of your situation.

FAQ:

Will there be changes to the loan terms during this process?
A: There will be no changes to your loan terms during or after the rebuilding process.

What if the homeowner does not want to rebuild?

A: The insurance proceeds can be used to pay off the mortgage with the balance of the excess funds going to the borrower.

After repairs or the rebuild is complete, are there any restrictions on refinancing?

A: No, once the home is repaired/rebuilt the borrower can refinance or sell the property.

For more information, please contact Loan Servicing at loanservicing@apmortgage.com or call 877-795-3637