What homeowners impacted by the LA fires should do

Jill Connelly/Bloomberg

As firefighters work to extinguish the remaining embers of the Los Angeles fires, impacted homeowners can begin to seek relief. 

Borrowers whose homes were partially damaged or completely destroyed should not be chased down by servicers. The government-sponsored enterprises this week reminded consumers of disaster forbearance plans, which could exempt them from late fees or penalties for up to 12 months.

If servicers can't establish contact with homeowners who they believe have damaged homes, they're also authorized to offer forbearance for up to 90 days. President Biden's major disaster declaration has also provided a 90-day moratorium on foreclosures of certain home loans including those insured by the Federal Housing Administration. There's also a 90-day extension granted automatically for Home Equity Conversion Mortgages. 

Payment relief won't look the same for every homeowner. And potential headaches await in insurance claims and rebuilding that could carry ever-rising price tags.

"The displacement of borrowers is going to be many months, if not into the couple of years, until they get back into their homes," said Russ Fowlie, executive vice president of loan servicing at San Diego-based Guild Mortgage. 

The massive servicer has checked its book of around 370,000 loans against a federal list of ZIP codes affected by the fire, flagging mortgages in those affected areas. As home loan providers respond to borrowers whose homes may have been among the 12,000 structures destroyed, they're suggesting next steps for those consumers to get relief.