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  • Wildfires may increase Foreclosure rates in California

    Oct 15, 2018
    By Scott L from Los Angeles, United States of America (1_E1C9469) [CC BY-SA 2.0 (https://creativecommons.org/licenses/by-sa/2.0)], via Wikimedia Commons
    Wildfires may increase Foreclosure rates in California
    in Insurance Claims, Fire Damage, Foreclosure and Bankruptcy, Property Damage

    Although foreclosures nationwide are at a 12 year low according to a recent article from National Mortgage News, this may change sometime soon as the effects of the history 2017 and 2018 wildfire seasons on California begin to be felt in the foreclosure statistics.  The data cited by the article, which comes from data provider CoreLogic’s Loan Performance Insights Report compiling foreclosure statistics from mortgages throughout the country, reflects that foreclosure rates nationwide dropped by 0.2 percentage points last year and the nationwide foreclosure rate is at the lowest level since May 2006, before the financial crisis began.  This rate was only 0.5 percentage in May 2018, which means that only half of 1 percent of all individuals with mortgages across the United States were in the process of being foreclosed upon as of May 2018. However, this report likely masks a problem that particularly affects California, as these rosy statistics do not reflect the thousands of homes that have been adversely impacted by the 2017 and 2018 wildfire seasons and what effect those wildfires will ultimately have upon the many California residents who have lost their homes as a result of the 2017 and 2018 wildfires.  Nevertheless, there is welcome news because California has been declared a major disaster area by the federal government, which means that California homeowners are automatically entitled to certain protections simply by virtue of the fact they own homes in an area affected by a natural disaster.

    A Welcome Trend, But Can It Last With Back to Back Historic Wildfire Seasons in California?

    Although fewer and fewer homeowners both in California and across the nation are being foreclosed upon as reflected in this recent data, there is speculation among experts on the mortgage market both in California and across the country as to whether this trend will begin to slowly reverse itself in the Golden State as a result of the historic wildfire seasons of 2017 and 2018 as more and more homeowners find themselves homeless as a result of homes that have burnt to the ground. Many homeowners are dealing with homes that may have been completely destroyed by fire.  Their immediate concern is likely not to pay their mortgage on a structure that may have burnt to the ground. Few homeowners may even know (or care) whether their responsibility to keep making mortgage payments continues after a fire has burnt their home to the ground. However, the declaration of California as a natural disaster area has given welcome relief to California homeowners.

    What Are a Homeowner’s Options in the Event of a Natural Disaster like a Wildfire?

    Although natural disasters like Hurricane Michael that this week made landfall near Mexico Beach, Florida in Florida’s Panhandle and has been responsible for 13 deaths thus far as it travels on a destructive path through the Southeast, homeowners who are affected by a natural disaster like a hurricane or the recent wildfires of the past two years in California have certain rights available to them as it relates to their mortgages.  However, because these rights are not well-publicized, many homeowners may not realize they are automatically eligible for the relief. According to a blog post by federal housing agent Freddie Mac, homeowners with a mortgage in California who have been adversely affected by the California wildfires who have mortgages, may be able to suspend mortgage payments for up to 12 months, waive any penalties or late fees associated with late payments made because of the wildfires and suspend the reporting of any late or missed payments to the credit reporting agencies.  As further pointed out by a news release from another of the federal housing agencies, Fannie Mae, mortgage servicers must suspend foreclosure and other legal proceedings if the servicer believes the homeowner has been impacted by a disaster.  Finally, if someone has a mortgage and lives in an area like California that has been declared a national disaster zone, mortgage servicers are authorized to suspend or reduce a homeowner's mortgage payments immediately for up to 90 days without any contact with the homeowner if the servicer believes the homeowner has been affected by a disaster.  Therefore, if you are a California homeowner who has been adversely affected the 2017 and 2018 wildfires, you have a full slate of rights that are now available to you to help you deal with the aftermath of those fires.

    Contact JT Legal Group if You Are a California Homeowner Who is Struggling About What To Do About Your Mortgage if You Have Been Affected by the California Wildfires

    Fire seasons 2017 and 2018 have been nothing short of catastrophic for California homeowners.  Thousands of homes have been destroyed, leaving tens of thousands of California homeowners homeless and wondering what to do about a mortgage on a house that may have burnt to the ground.  If you are a California homeowner who has been adversely affected by the wildfires of the past two years, your mortgage is likely the last thing on your mind. However, understand that you have many options other than a foreclosure, which is often something your bank or mortgage servicer may not tell you.  You also have specific rights due to the fact that California has been declared a federal disaster area by the President.

    If you are a California homeowner who has been adversely impacted by the state’s recent wildfires, you may feel like you have no recourse whatsoever, that the deck is stacked against you and that soon you will be on the streets or living in a shelter. However, this does not have to be the case given that you have specific rights under federal law due to the natural disaster declaration. For more information on your specific rights since California has been declared a federal disaster area due to the wildfires burning throughout the state, your rights and how our experienced foreclosure defense attorneys can assist you, give us a call today at (888) 529-3111 or email us at info@jtlegalgroup.com.  

    JT Legal Group is a Los Angeles-based law firm which focuses on California foreclosure defense, real estate law, and personal injury representation. Our attorneys fight to keep families in their homes, particularly those who have been negatively impacted by a national disaster like the 2017 and 2018 California wildfires.

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