What to do in the wake of California’s wildfires
Wildfires rage through Los Angeles, Ventura, and Riverside counties, burning tens of thousands of acres, and killing people and animals while pushing them from their homes.
Once contained, homeowners and renters will assess their property damage and whether they need mortgage assistance or disaster relief.
As climate change catastrophes become more dire, severe, and frequent, borrowers should know their options in times of need.
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Help after a climate disaster
In any emergency situation, the first thing to do is find safety. Following the guidance from the local Red Cross or Federal Emergency Management Agency (FEMA) can help. Once safe and secure, you can focus on your home, property, and mortgage.
For homeowners and renters impacted by the wildfires in Southern California, assistance options are available that can reduce or even suspend monthly payments. The first step would be to contact your mortgage servicer to report any hardships and request help as soon as you possibly can. (Your mortgage servicer is likely a different company from your lender, and can almost always be found on your monthly statement.)
Fannie Mae and Freddie Mac reminded both borrowers and servicers that they provide emergency resources during disasters (see Fannie’s here and Freddie’s here). The disaster response resources include trained recovery counselors to assess needs and personalize plans, help request aid from FEMA and insurance providers, and ongoing guidance for 18 months.
In these situations, impacted homeowners often meet the eligibility to enter a forbearance plan — reducing or pausing their mortgage payments for up to 12 months without incurring late fees or foreclosure. Once back on their feet, borrowers can make up the missed payments through a lump sum, increase their monthly payment, defer missed payments to the end of their loan term, or modify their mortgage if faced with long-term hardship.
Climate change now claims a large share of non-current mortgages. At the end of 2024, natural disasters were responsible for 42.8% of borrowers in forbearance, according to the Mortgage Bankers Association (MBA). That jumped from a 12% share one year earlier.
“Given the disruption and devastation caused by the California wildfires, that share will likely move higher in the months ahead, as homeowners turn to forbearance to allow time to navigate their recovery process,” said Marina Walsh, VP of industry analysis at the MBA.
In addition to reaching out to servicers, borrowers should also review their insurance policy and see what their coverage provides.
As climate emergencies become more chronic, knowing the steps to take for mortgage relief can help mitigate any loss and stress in the face of disaster.
“Our hearts go out to our fellow Californians dealing with the tragedy and loss from the fires in the L.A. area. While we don’t yet know the complete scope of the devastation, we know there could be tens of thousands of families who will need a new home,” said Eric Johnson, spokesman at the California Housing Finance Agency (CalHFA).
“As we continue to work with the Administration to explore additional ways the CalHFA can help, our existing disaster relief guidelines are already set up to assist Southern Californians looking to buy a new home. Those guidelines allow those whose homes were destroyed or declared uninhabitable by a California major disaster to access the CalHFA FHA first mortgage program with the 203(h) option that offers 100% financing. In addition, borrowers can also include the MyHome Assistance Program to pay for additional down payment or closing costs without having to be a first-time home buyer.”
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The 2025 Southern California wildfires; data, causes, and fallout
As of Jan. 23, the 2025 Southern California wildfires still aren’t contained and burned over 50,000 acres in Southern California, according to the California Department of Forestry and Fire Protection. As of Jan. 23, CoreLogic estimates total losses between $35 billion and $45 billion across nearly 17,000 properties.
While investigators try to determine the fires’ initial causes, ideal wildfire conditions set up the widespread devastation.
From May 5, 2024 to Jan. 21, 2025, Los Angeles only received 0.16 inches of precipitation. The area would normally accumulate 6.68 inches over that timeframe, according to the National Weather Service (NWS).
“Los Angeles in 2025 has had the second-driest start to the year since 1877 and it was the hottest summer in over 130 years,” Thomas Jeffery, senior principal and geospatial scientist at CoreLogic, said in a webinar. “The wind is the critical factor that will determine how that fire progresses. Certain types of vegetation will determine that as well.”
Jeffrey added that this year’s Santa Ana winds are the strongest measured in the past decade, according to the NWS. Moreover, four exacerbating factors — sustained winds over 30 miles per hour, relative humidity below 10%, temperatures above 70 degrees Fahrenheit, and drought conditions — occurred simultaneously in the U.S. for the first time this January.
Things to look out for
Unfortunately, some people and companies will try to take advantage of the desperation and devastation born out of emergency situations.
This form of exploitation, coined ‘disaster capitalism,’ happens when investors buy up destabilized assets and privatize them for profit in the aftermath of a catastrophe.
Additionally, renters should be on the watch for landlords gouging prices. As many anticipate rents in Los Angeles to balloon, California Attorney General Rob Bonta warned about the illegality of gouging and already filed charges. In a state of emergency, California’s price gouging law prohibits increasing prices by more than 10%.
Typically, this protection lasts 30 days but varies based on the event. Violators can be punished by up to a year in jail, a $10,000 fine, or both, and can be subject to further civil penalties. Resources to report any suspected price gouging can be found here.
The insurance problem
In addition to contacting your servicer, borrowers should also review their insurance plan and see what it provides.
Unfortunately, with weather becoming more extreme, homeowners insurance costs have soared. From 2018 to 2023, premiums increased 33.8% in the U.S. with California seeing a 43.7% growth rate (the eighth-highest overall) in that five-year period.
Many insurers also dropped coverages and cancelled policies as the effects of climate change worsened. Due to the climbing wildfire risks, two examples of this happened in California when Allstate discontinued homeowners policies in 2022 and State Farm followed suit in 2024.
For those with policies in place, you may decide to repair, rebuild, or move on from your home. For professional advice, work with your servicer to develop your best plan by identifying all your options and any specialized loans that can help.
If you’re having trouble with your insurance provider, there are steps you can take to get the most from your coverage.
Time to make a move? Let us find the right mortgage for youThe bottom line
Climate change — the man-made result of profiteering to the planet’s detriment — led to the latest wildfire disaster in Southern California.
Borrowers should contact their insurance provider and mortgage servicer following any sort of weather-related emergency to their house or place of work.
If you or someone you know has been impacted, leverage all your resources and get the help you need.
