LA residents whose homes burnt down in wildfires will still have to pay off mortgages, property taxes

NY Post ^ | 01/17/2025 | Snejana Farberov

[ChicagoConservative27]

As deadly wildfires continue scorching their way through Los Angeles and the surrounding area for the second straight week, homeowners are worried about the prospect of defaulting on their mortgages in the wake of the unprecedented disaster were offered some reprieve from the nation’s major lenders.

On Monday, Fannie Mae and Freddie Mac unveiled mortgage assistance and relief options for customers reeling from the historic Southern California fires.

Both government-backed corporations are offering 12-month forbearance plans, meaning that struggling homeowners could either reduce or suspend their mortgage payments for up to a year without incurring late fees, foreclosure, or other types of legal proceedings.

[flamberge]

Loss of use coverage, also known as additional living expenses (ALE) insurance, is a standard part of most homeowners' insurance policies...

Of course, that is assuming that the homeowner had insurance in force at the time of the fire. A great many of them did not.

And that also assumes that the insurance companies that did provide coverage remain solvent and can pay the contracted benefits. That remains to be seen.

Reportedly, over 12,000 structures have been destroyed, and the numbers keep climbing. Over 50,000 people are suddenly homeless. The California Fair Plan program is said to be exposed to over 24 billion dollars in claims, which they simply do not have the funds to pay. Total damages from the firestorms are estimated at over 150 billion dollars. That number keeps climbing too. But nobody knows what claims total will be. "More money than what insurance companies have on hand" would be a good first approximate guess.

The people who did not have insurance are absolutely screwed. No, they will not be paying their mortgages or property taxes ever again.

That is what will lead to some very tense discussions behind closed doors.

[1Old Pro]

Of course, that is assuming that the homeowner had insurance in force at the time of the fire. A great many of them did not.

That's a personal choice. Self insuring comes with known consequences. I for one would never self insure unless I could take the total loss, kinda like going to the horse track, take what you can afford to lose because it's a gamble.

[Antihero101607]

I wouldn’t be surprised if Democrats tried to impeach President Elect Trump for the fires.

[ProtectOurFreedom]

After the big Napa, CA fire, it was learned that the county (and maybe state) have to inspect all of your burned-out house waste before allowing it to be sent to a landfill. Of course, they had 5% or less of the inspectors they needed to inspect every burned out house, so the inspection process alone too a year. Then you can start the design and permitting process for your replacement home.

The irony is these very hot fires incinerate everything on site including anything that might have been toxic, so the chances of finding any remaining toxic waste are very low. But here's the Nervous Nellie Pantywaist Liberal writing at the "Los Angeles Public Press" on toxic waste at burn sites:

Environmental health experts have a clear message to Angelenos returning to the blackened remains of their homes and businesses: protect yourself from harmful toxins in the ash and air.

“Burn sites can be a kind of toxic waste dump,” said Chris Field, the Perry L. McCarty director of the Stanford Woods Institute for the Environment. “Even treasured possessions can become dangerous after they’ve been through a fire.”

While typical wildfires eat up natural undergrowth, urban fires tear through manmade materials with all sorts of dangerous and often carcinogenic substances. Think transformers containing PCBs. Typical household items containing heavy metals like lead. Copper piping. Building materials with asbestos. Electrical wires coated in toxic polyvinyl chloride. Cars with lithium-ion batteries. Furniture full of per- and polyfluoroalkyl substances (PFAS), and other household products made with volatile organic compounds (VOCs).

Copper pipes are toxic? The same copper pipes that we get our drinking water from?

In the "Author is an uninformed idiot" category, he wrote "Think transformers containing PCBs." He is just shooting from the hip, dredging that up from the cobwebs of his mind.

In 1979, EPA banned the manufacture, processing, and distribution of PCBs under the Toxic Substances Control Act (TSCA). The ban allowed for the continued use of PCBs in existing electrical equipment, such as transformers, until the end of their useful life.

TSCA was passed FORTY SIX years ago. Most utilities have had programs for years to either replace the entire transformer or refill it with non-toxic fluid. The EPA database of PCB filled transformers shows no such transformers in California.

[bk1000]

GA resident here: If you have a mortgage, you have home owners insurance. If you put down less than 20% on your home, you also pay for private mortgage insurance. I fail to understand the point of this article. Of course you are responsible for your mortgage. The government burning it down does not absolve you of your debt.
Oh well, no more house, no more debt, right? Nope.

[The Public Eye]

Some or all insurance companies have been canceling policies. James Woods said his was cancelled 4 months ago. Why he did nothing is his problem. But when that happened the company was in effect stating that he property was un-inhabitable, as I believe is much of California. I

[1Old Pro]

More than 350,000 people in California live in towns sited completely within zones deemed to be at very high risk of fire. In total, more than 2.7 million people live in "very high fire hazard severity zones", which also include areas at lesser risk.

If you are going to live in these areas, be prepared.

[SaxxonWoods]

“I expect many homeowners will just walk away from their property, default on their mortgage and leave the mortgage holder with a scorched piece of land.”

I expect a lot of deals will get made between banks and homeowners.

[Pete Dovgan]

In this corner, you have the Democrats claiming Climate Change was responsible for the Disaster in LA.
1. Climate change caused by CO2 release.
2. Blamed on pro-petroleum/pro-energy Donald Trump

In this corner, you have Conservatives claiming the following:
1. Climate change is eternal, and has been going on long before humans.
2. Even IF it’s CO2 accelerated, the US doesn’t lead CO2 production, China does (Biden enhanced China)
3. The Forests were mismanaged and Donald Trump warned them in 2016...they ignored it.
4. The reservoirs were empty because of California water policy via the Democrats.
5. The fire hydrants were empty, yet to be explained.
6. The Fire Department spent tons of money on Harvard Business grads, but it’s fire engines were not repaired in the shop do to money shortages.
7. The Fire Department budgets were drastically reduced making them incapable of proactive planning.
8. Money for upkeep and repair of fire equipment had been diverted by LA to DEI and Gender art.
9. The mayor of LA was out of the country during fire season, and was speechless upon return.

The reality is that more than 50% of California persons polled blame ‘Climate Change’ and not the misuse of funds, the misuse of water resources, the misuse of the forest. That kind of DENIAL (and I don’t mean a river in Egypt) is pathological and cannot be overcome with logic. In other words, you can’t fix that. Unless people come to terms with the ‘preventable’ causes, these types of catastrophic problems will become more common and cyclic....like Climate change. The change that must be made is a Political Climate Change.

Trump is just a scapegoat for failed, fraudulent, and ineffectively expensive government that has saddled the public with tax burden, but does not deliver services.

[Beowulf9]

Even if they were notified of their cancellations to find a new policy with other insurers, they know what’s going on in the industry, the hazards, hike costs. I’ve read as much as 40%, pretty pricey. Some of the residents have lived there for fifty years.

I’m not talking about not being able to be insured. Even so it might be difficult to find insurers who see the problem coming, overly hot summer. I wonder if they knew about the empty resevoir and the hydrants being dry.

[cgbg]

Insurance companies were looking at two pieces:

Risk

Premiums

Refusing to offer policies just means they were not allowed to charge premiums (by CA insurance regulators) that reasonably covered the risk.

CA regulations require insurance premiums that are among the lowest in the country for the equivalent replacement cost.

The insurance companies are taking extraordinary risk in CA at those premium levels even before taking into account wildfires and earthquakes.

[1Old Pro]

Even if they were notified of their cancellations to find a new policy with other insurers, they know what’s going on in the industry, the hazards, hike costs. I’ve read as much as 40%, pretty pricey. Some of the residents have lived there for fifty years.

It comes with the territory, same thing happening in coastal areas of Florida.

[Beowulf9]

I’m sorry but I’m not on the side of the insurers.

[1Old Pro]

I’m sorry but I’m not on the side of the insurers.

I'm on the side of taxpayers, and I don't think taxpayers should be in the business of insuring under insured properties.

[bankwalker]

there were no cancellations ...

[Teacher317]

Because you say so?

[going hot]

shyster toxic experts ought to be placed in the dump themselves!

The proper disposal of toxic/contaminated material is to incinerate it.

If newsome was truly smart and wante to save his own political ass, he would do the following.

Peel of some of the money for immigrant support.

Start with one city block, and place large bins every few houses on the curb.

Get the front loaders running, paid or volunteer, and scrape the property clean.

Troubleshoot the power, overhead or buried, and set up a temp service panel for each lot.

Obtain fema trailers and place them on the property to the side of the former residence, and hook up tyo services as available.

This gives the family a place to stay, eat drink and sleep, their temp home.

expedite plan approval, keep the permit process, for the safety of all, but hire more reviewers/engineers at planning to open up the bottleneck there. Lighten up on the coastal commision bullshit, tell the naysayers to stifle their tongues, and most likely can break ground by Spring. Get that block looking good, and the tidal wave of rebuild will be contageous.

The problem is always the government and their regs with the boot on the neck.

Allow people to do what they do, and the rebuild will explode.

This in turn will make the unemployment lowest it has been in years.

[FreedomPoster]

In most cases it was more that insurers did not renew a policy, not that it was “cancelled”. And this was a rational business decision for them due to the regulatory environment for insurance in California, the regulatory environment affecting fire prevention (extreme environmental laws preventing firebreaks and forestry management), and the feckless governmental executives local and state.

[flamberge]

That's a personal choice.

That was not a personal choice for a great many homeowners. Their previous insurance company lawfully declined to renew a policy. A non-zero set of that group failed to get enrolled in the California Fair Plan in time to protect themselves.

"If you choose not to decide, you still have made a choice" (RUSH, Freewill, 1980)

Well, OK then. It must be all their fault. Screw them.

And the folks who did pay attention and signed up for California Fair Plan in time? Does that plan have enough money to pay out the contracted benefits? We will find out in the coming months. My guess is that they do not have enough money and will be tapping other insurance companies that still do business in California for assessments.

In both cases, a lot of people won't be able to pay, no matter what sort of intimidation is applied to them. That is why we have bankruptcy laws. The courts that handle those cases had better staff up. They will be backlogged for years.

There is no check in the mail.