What to Do About Your Mortgage and Bills After a Disaster

With wildfires tearing through Los Angeles County, the devastation is hard to ignore. Over 12,000 structures have been destroyed, entire neighborhoods reduced to ash, and nearly 92,000 residents forced to evacuate.

As communities come together to rebuild their lives, one big question looms: What happens to financial responsibilities—like mortgage payments, rent, and utility bills—when disaster strikes?

This guide walks you through key steps and resources for homeowners and renters navigating financial recovery after a natural disaster.

Do You Still Have to Pay Your Mortgage If Your Home Is Destroyed?

Yes, even if your home is gone, your mortgage doesn’t go away. But there’s good news—relief options are available.

Forbearance allows you to pause or reduce your mortgage payments for up to 12 months. This option is available for loans backed by Fannie Mae, Freddie Mac, the FHA, and the VA. Here’s what forbearance offers:

• No late fees during the forbearance period.

• Foreclosure proceedings are put on hold.

Keep in mind: Forbearance is not forgiveness. You’ll still need to repay those missed payments later, either as a lump sum, through installments, or by extending your loan term.

If you have a private mortgage, relief options depend on your lender. Many major banks, like JPMorgan Chase and Bank of America, offer disaster forbearance programs. Reach out to your mortgage servicer as soon as possible to explore your options.

What to Do Immediately After a Disaster

If your home has been declared a total loss, here’s where to start:

1. Contact Your Insurance Company
   File your claim right away. This can unlock benefits like temporary housing assistance and rebuilding costs. In California, insurers are required to offer four months of loss-of-use payments upfront to help cover rent or hotel stays.

2. Document Everything
   Take photos and videos of the damage and keep all receipts for temporary expenses like hotels, clothes, and pet boarding. These could be reimbursed under your policy.

3. Apply for FEMA and SBA Assistance

• FEMA provides grants for immediate needs like food, temporary housing, and emergency repairs.

• The SBA offers low-interest loans to homeowners and renters for rebuilding and replacing belongings—even if you don’t own a business.

What Happens to Rent Payments After a Disaster?

For renters, California law offers protections:

• If your rental unit is completely uninhabitable, your lease is void, and you’re no longer required to pay rent. Landlords must also return your security deposit.

• If your rental is partially damaged but livable, you can terminate the lease or stay while repairs are made. In most cases, rent payments are suspended during this time.

Even if you don’t have renters insurance, you may still qualify for FEMA aid or SBA loans to cover relocation costs and replace your belongings.

What About Utility Bills?

Utility companies often offer assistance after natural disasters, such as:

• Payment plans or bill forgiveness.

• Temporary suspension of disconnections.

Reach out to your utility providers to learn what’s available.

Plan Ahead: Be Prepared Before Disaster Strikes

Disasters are unpredictable, but you can take steps to make recovery easier:

• Review your insurance. Ensure you have the right coverage for disasters common in your area, and if your home is in a Trust be sure that the Trust is named as additional insured.

• Build an emergency fund. Start saving for unexpected expenses.

• Secure important documents. Keep them in a waterproof, fireproof safe, or back them up digitally.

Let’s Navigate Recovery Together

Disasters are overwhelming, but you don’t have to go through it alone. If you have questions about navigating your financial recovery, I’m here to help, if you’d just like to discuss your particular situation and explore the options available to you.

📅 Schedule a consultation today: https://calendly.com/shellyoneil

Remember, every small step forward is progress. #LAStrong

Donate to those affected by the LA Wildfires here: https://lacity.gov/LAstrong