What to Do if Your Home is Burned or Destroyed by Wildfires

If you or your loved ones have been affected by a wildfire, our hearts go out to you. In this time of hardship and loss, we at American Pacific Mortgage send you our deepest sympathies and can only hope for a sense of calm and safety to be restored for you as soon as possible.

Please find our answers to some of the most important questions you may have at this time regarding your home loan.

Who To Notify

If your home was fully or partially destroyed in a wildfire, the first step is to contact your insurance company or agent.

You should also notify your mortgage servicer.

Wildfires and Home Insurance

Homeowners insurance covers a wide range of items in terms of what is protected. The good news is damage from fire, smoke and ash is typically covered under most home insurance policies.

The first step is to make sure you have an updated inventory of all items and thoroughly document your damage. Afterward, let your insurance company inspect your home and be sure to document your conversations. It might also be ideal to have a thorough inspection done by an independent contractor who does not get the majority of their business from your insurance company for a second opinion.

Once you have a full assessment of all the damages, file your claim as soon as possible. Be sure to confirm the deadlines to file a claim with your insurance company, and document everything!

Typical Process for handling the insurance claims and repairs or rebuilding (may vary by servicer):

• Provide the Insurance Adjustors Report to your servicer
• Provide an estimate for the repairs or construction
• Insurance Claim checks will be payable to the borrowers and the mortgage company
  Please note: The borrower will need to endorse the check and mail it to the mortgage company.  The mortgage company will control the distribution of funds to the borrower or contractors
• The borrower needs to hire a licensed, experienced, qualified contractor (watch out for fraud, be sure your contractor is licensed). Please note: The plans for repairs or rebuilding must be detailed and specific and adhere to applicable codes and regulations governing residential repair or construction
• The Servicer may require property inspections during the process
• A final inspection will be required to ensure completion of the work
• Final lien waiver will be required to release the final disbursement and finalize the claim

FHA Disaster Relief for Wildfire Victims

If your home is located in a Presidentially declared disaster area, you may qualify for the FHA 203(h) Disaster Relief Loan.

The FHA 203(h) mortgage may be used to finance the purchase of a new home with no down payment and favorable terms. If you plan on purchasing a new home, the new home need not be located in the area where the previous house was located.

Mortgage Related Questions

1. What do I do about mortgage payments?

You should continue to make your mortgage payments.

If your mortgage loan is being serviced by American Pacific Mortgage, we have a hotline you can call for assistance: 855-749-4545.

2. Will there be changes to the loan terms during this process?

There will be no changes to your loan terms during or after the rebuilding process.

3. What if the homeowner does not want to rebuild?  

The insurance proceeds can be used to pay off the mortgage with the balance of the excess funds going to the borrower.

4. After repairs or the rebuild is complete, are there any restrictions on refinancing?  

No, once the home is repaired/rebuilt the borrower can refinance or sell the property.

We appreciate you trusting us to help in this time of need. Please feel free to reach out to let us know if we can help in any way.