Mortgage Relief for Los Angeles Homeowners Affected by Wildfires

On Thursday, January 16th, wildfires continued to devastate Los Angeles, leaving homeowners with significant financial strain as their properties were destroyed or heavily damaged. Mortgage lenders are offering temporary relief to help residents cope with the aftermath of the disaster.

Government-sponsored enterprises Fannie Mae and Freddie Mac offer mortgage forbearance to homeowners impacted by the Southern California wildfires. These GSEs, which help stabilize the housing market by purchasing mortgages from lenders, provide up to 12 months of forbearance, allowing homeowners to pause or reduce mortgage payments without the threat of foreclosure or late fees.

“We are committed to supporting homeowners, renters, and communities in need during this challenging time,” said Cyndi Danko, senior vice president at Fannie Mae. She encouraged homeowners affected by the fires to reach out to their mortgage servicers for support.

Major banks, including JPMorgan Chase and Bank of America, offer relief as well. Chase Home Lending provides a three-month forbearance plan, which can be extended for up to a year, depending on individual circumstances. Bank of America has tailored its relief program to provide flexibility and help customers navigate recovery.

However, homeowners continue to face the ongoing challenge of paying property taxes, which are often included in their monthly mortgage payments. Los Angeles County Assessor Jeff Prang noted that while fire damage may lower the value of homes, the land could still hold significant value, particularly in high-demand areas like Pacific Palisades and Malibu.

If the home is rebuilt, it could regain its preferred value. Homeowners who have sustained over $10,000 in damage may qualify for tax relief by filing a claim with the Assessor’s office.

Although mortgage forbearance programs provide temporary assistance, experts warn that the financial burden on homeowners is far from over. Many have called for improved climate risk management to address the economic impacts of future natural disasters.

“The Los Angeles wildfires underscore the urgent need for financial institutions to prioritize climate risk management,” said Laurent Birade, banking industry practice lead at Moody’s.

Residents face long-term financial challenges as the fires wreak havoc across Los Angeles, even as mortgage lenders offer short-term support.