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.