Latest update: Jan. 11, 8:30 a.m. Central Time.
The Los Angeles area is currently facing a dire situation as wildfires have led to mandatory evacuation orders for hundreds of thousands of residents. These escalating fires have claimed an estimated eleven lives and destroyed thousands of structures, casting a long shadow over the community. Amid this turmoil, the reverse mortgage industry is grappling with the implications and repercussions resulting from the widespread disaster. It is crucial for affected individuals to contact their loan servicer and insurance company as soon as possible to gain clarity and support during this challenging time.
In the aftermath of the wildfires, it became apparent that Federal Housing Administration (FHA) regulations could significantly affect borrowers. Several industry experts, including lenders and servicers, emphasized the importance of keeping servicers informed regarding any FHA-insured reverse mortgages. This proactive communication may alleviate some challenges that homeowners face while navigating a devastating disaster, especially in terms of occupancy and the ability to make informed decisions for the future.
Industry Responses to the Disaster
The National Reverse Mortgage Lenders Association (NRMLA) swiftly responded to the crisis, urging its members to communicate with affected borrowers immediately. In their updates, the organization expressed condolences and provided guidance, emphasizing the need for unity and resilience during these trying times. They asserted that concern for members, staff, and affected families is paramount, assuring them that support exists within the community.
Erica Macias, Chief Operating Officer of Hitech Lending, a prominent reverse mortgage finance company in Southern California, articulated her company’s commitment to supporting borrowers during this crisis. Hitech Lending is actively assessing the risks involved and is prepared to implement continuity plans as necessary. The focus remains on providing essential resources and flexibility to both customers and employees as they navigate this complex situation.
Finance of America (FOA), another significant player in the reverse mortgage industry, echoed similar sentiments. With a substantial presence in Southern California, they pledged to offer personal care and support to their employees, partners, and borrowers. Their philanthropic organization, Cares, has extended assistance funds during the crisis as they monitor the situation and evaluate further actions based on the evolving circumstances.
On-site Situation
George Morales, the National Sales Director for Mortgage Cadence and a veteran in the reverse mortgage sector, brought attention to the high concentration of Home Equity Conversion Mortgages (HECMs) in the impacted areas. Morales emphasized the necessity of a proactive response to these evolving challenges, particularly given that Los Angeles County holds a significant number of reverse mortgages in the country. As a result, immediate responses to the changing landscape are imperative to mitigate possible implications for borrowers.
Local experts estimate over 5,000 established HECMs and approximately 4,600 approvals in the Los Angeles-Long Beach-Glendale metropolitan area, underscoring California’s status as a leader in the reverse mortgage market. Industry professional Tom O’Donoghue from Reverse Loans Now highlighted the challenges faced by both current and past customers in the wake of the fire, affected by delays due to federal aid regulations enforced by FEMA. The complicated dynamics of this crisis present hurdles not just to those whose homes were impacted but also to those in various stages of the loan process.
Next Steps
Experts recommend that borrowers take immediate action by reaching out to their insurance companies or loan servicers. The urgency of this communication is critical, especially for individuals whose homes have suffered damage or who are impacted by evacuation orders. By obtaining accurate assessments of potential property damage and initiating the claims process, homeowners can better navigate the recovery journey.
For those who have not yet engaged with FEMA and require assistance, it is essential to do so through their online resources or contact them directly by phone at (800) 621-FEMA (3362). Understanding available options through federal assistance can significantly influence recovery efforts moving forward.
Conclusion
The wildfires in Southern California have had a far-reaching impact on the community, especially for reverse mortgage borrowers. The resilience of the industry is evident in the swift actions taken by various organizations and lending companies, fostering a spirit of collaboration and support in times of crisis. Affected borrowers are encouraged to stay informed, seek help, and maintain communication with their servicers and insurers to address the rapidly evolving situation effectively. As circumstances continue to unfold, the industry remains committed to finding solutions and providing resources for affected individuals as they work toward recovery.
FAQs
What should I do if my home was damaged by the wildfires?
If your home has been damaged, immediately contact your insurance company to initiate the claims process. Additionally, reach out to your loan servicer to inform them of your situation and discuss potential options.
How can I access FEMA assistance?
You can access FEMA assistance by visiting their official website or calling their hotline at (800) 621-FEMA (3362) for guidance through the application process.
What if I have an FHA-insured reverse mortgage?
If you have an FHA-insured reverse mortgage, it is vital to inform your lender about your situation. Keeping your servicer updated on your occupancy status can help them provide appropriate assistance during the disaster recovery.
Are reverse mortgage lenders providing additional support during the wildfires?
Yes, many reverse mortgage lenders have announced emergency response plans, including forbearance assistance and increased staffing to manage the higher call volume from affected borrowers.
How long can I expect forbearance assistance to last?
Forbearance assistance typically lasts three to six months, but it can be extended based on your particular situation and discussions with your loan servicer.
