What is the process for homeowners whose home was fully or partially destroyed in the fires currently burning in CA?
- 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
- 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 for repairs or rebuilding must adhere to applicable codes and regulations governing residential repair or construction
- The plans must be detailed and specific
- The Servicer may require property inspections during the process
- A final inspection will be required to ensure completion of the work
- Final lien waiver will be required to release the final disbursement and finalize the claim
- 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).
- Contact your county tax collector and see what relief options they can provide you to decrease your property taxes until the home is rebuilt
- 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)
- Contact your mortgage servicer and let them know of your situation
- What if the homeowner does not want to rebuild? 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? No, once the home is repaired/rebuilt the borrower can refinance or sell the property.