What Happens To Your Mortgage After A Wildfire?
California faces wildfires every year, particularly during the summer and fall seasons, when high temperatures, low humidity, and strong winds create the perfect conditions for fires to spread rapidly.
Some of the most devastating fires in recent years include the Cedar Fire (2003), which damaged 2,829 homes in San Diego County; the Camp Fire (2018), which burned almost 19,000 structures—of which 14,000 were residences—and decimated much of the town of Paradise; and the Dixie Fire (2021), which left 1,329 buildings damaged in the town of Greenville.
Fires like the Palisades Fire and the Eaton Fire are still raging through Los Angeles, despite days of tireless efforts from the LAFD to contain the situation and extinguish the flames. The ongoing challenge the state faces in wildfire prevention and response becomes even more apparent.
In particular, the Eaton Fire, which started in the Altadena area and has scorched over 14,000 acres, has become one of the most destructive fire events in LA history and, as of this week, evacuation orders remain in place.
These fires raise difficult questions about safety, liability, and the future of communities vulnerable to these disasters. One of the most immediate concerns for homeowners in the fire-affected area is what happens to their mortgage after a wildfire. If you’ve been affected by the fire, keep reading to learn more:
Unfortunately, It Doesn’t Disappear, But You Have Options:
Sadly, even if you’ve lost your home in a wildfire, your mortgage doesn’t disappear, but the impact on it depends on several factors:
Insurance Coverage
- Homeowners insurance: depending on your policy, this may cover the cost of repairing or rebuilding your home, including attached structures like decks or garages. However, homeowners insurance doesn’t always cover damages from wildfires in high-risk areas, so you should check your policy or contact your insurance provider if you’re unsure.
- Mortgage Lender’s Interest: if your home is damaged by a wildfire, you and your mortgage lender will receive a portion of the insurance payout, which ensures the lender’s financial interest is protected. The lender may hold onto these funds until repairs are completed, or the property is rebuilt.
Mortgage Lender and Forbearance
- Payment Relief: forbearance or payment deferral options may be available to impacted homeowners. This allows you to temporarily suspend or reduce your mortgage payments, giving you time to recover and rebuild without the financial pressure of monthly payments.
- Loan Modifications: under certain circumstances, when your home has been significantly damaged, but you are able to continue living in it, your lender might work with you to modify your loan terms. This could include extending your repayment period or reducing the amount you owe.
Rebuilding and Mortgage
If the property is destroyed, the mortgage remains unchanged unless the lender agrees to forgive the debt. The insurance compensation will go toward rebuilding the home, but the homeowner will still be responsible for the mortgage on the land.
What Happens If You Can’t Afford To Rebuild?
Unfortunately, since you are still responsible for your mortgage after a wildfire, your lender may eventually initiate foreclosure proceedings. However, lenders generally prefer to work with homeowners to avoid foreclosure—particularly after a natural disaster—so trying to work out a loan modification or repayment plan could be your best option. You should contact your lender to learn more about the options they offer.
FEMA Assistance And Other Aid
If your home is damaged after a wildfire, you may be eligible for disaster assistance from the Federal Emergency Management Agency. To find out if you can benefit from this, visit the FEMA site.
When Do I Need A Personal Injury Lawyer After a Wildfire?
If the wildfire was caused by negligence on the part of a power company—whether due to lack of maintenance, failure to de-energize power lines in high-risk areas during inclement weather events, or any other reason that may constitute negligence—and you’ve suffered injuries, significant distress, or loss, it may be time to consult a personal injury lawyer. Here are some examples of how the team at Adamson Ahdoot may be able to assist you:
Injuries From the Wildfire
Whether you’re suffering from burns, smoke inhalation, or other injuries, you could be entitled to compensation. An experienced personal injury lawyer can help you pursue a claim for medical expenses, pain and suffering, and other damages.
Exposure to Toxins or Chemicals
Wildfires often release hazardous smoke and chemicals into the air. These may cause respiratory and cardiovascular issues, as well as other long-term health conditions. If you’ve been exposed to dangerous levels of toxins due to a wildfire, you may have a claim. If you think you’ve been exposed to these toxins, you should talk to a lawyer about pursuing a claim.
Property Damage/Loss
Although property damage/loss typically falls under property law, if negligence plays a role, you may be entitled to compensation if your home or business was damaged or destroyed by wildfire. Your personal injury lawyer can assist you in pursuing a claim.
Wrongful Death
If someone dies in a wildfire caused by negligence from the power company, this could be considered a wrongful death. In this case, a trusted personal injury lawyer would be able to help you file a claim for the emotional and financial damages caused by the loss. As well as ensure that the responsible party is held accountable for their role in the tragedy.
Financial Loss Due to Displacement
After a wildfire, many people are forced to leave their homes due to evacuation orders, property damage, or property loss. If you were displaced by the fire, you may be entitled to compensation for temporary housing, relocation expenses, and other costs associated with the situation.
If you or your loved ones have been affected by the wildfire, don’t hesitate to reach out to Adamson Ahdoot. We are here to help you get the compensation you deserve, and we offer a free case evaluation.

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