What happens to mortgage payments after the Palisades fire?

Homeowners who lost their homes in the Palisades fire, like Rachel Jonas and Rob Fagnani, may still have to pay their mortgage. Forbearance typically lasts only 12 months, insufficient for rebuilding.

Why is California's mortgage forbearance not enough for fire survivors?

California law offers only 12 months of mortgage forbearance, while rebuilding a home destroyed by wildfire often takes two to three years or more.

What financial burdens do Palisades fire survivors face?

Survivors like Jonas and Fagnani face paying mortgages on destroyed homes, rent for temporary housing, and covering rebuilding costs and insurance gaps.

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Mortgage Woes After Wildfire: Homeowners Pay for Lost Houses

21 Dec

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Summary

Homeowners pay mortgages on homes destroyed by wildfires.
California law mandates only 12 months of mortgage forbearance.
Survivors face paying mortgages, rent, and rebuilding costs.

Mortgage Woes After Wildfire: Homeowners Pay for Lost Houses

Survivors of the January 2025 Palisades fire, such as Rachel Jonas and Rob Fagnani, are confronting a harsh financial reality: continuing to pay mortgage payments on homes that no longer exist. California law permits only 12 months of mortgage forbearance, falling critically short of the two to three years, or even longer, often required for rebuilding after such devastation.

This insufficient relief forces many disaster victims into dire financial straits. They are burdened with paying mortgages on destroyed properties, rent for temporary accommodations, and covering insurance gaps. The end of the limited forbearance period can also lead to substantial balloon payments, potentially totaling $50,000 to $100,000, threatening their ability to secure rebuilding loans due to credit score impacts.

Jonas and Fagnani are now advocating for federal changes to mortgage relief laws, highlighting the universal lack of a consistent process for homeowners affected by federally declared disasters. Their fight aims to establish more adequate support systems that truly address the prolonged financial strain faced by wildfire survivors across the United States.