What happens to your mortgage if your house burns down?

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• If you lose your home in a fire, you'll still owe the mortgage on the property.
• However, you may be able to temporarily pause your payments with a forbearance.
• As soon as you and your family are safe, call your mortgage servicer to discuss your options.

The wildfires in Los Angeles have caused hundreds of billions of dollars in damage and destroyed over 12,000 homes. As residents begin to sift through the damage, homeowners have been asking: What happens to my mortgage if my house burns down?

Do I still have to pay my mortgage if my house burns down?

Yes, if you have a mortgage on your home, you still owe that money to your lender even if your house burns down. That's where your homeowners insurance comes in.

Mortgage borrowers are required to have homeowners insurance, which covers you if your home is damaged or destroyed. You'll work with your insurance company and your mortgage lender or servicer (the company that you make your monthly mortgage payments to) to figure out what your next steps are, whether you plan to rebuild or start over somewhere else.

Additionally, just because you still need to pay your mortgage doesn't mean you need to pay your mortgage right now. There are relief options available that can put a pause on your monthly payments while you recover.

Mortgage relief for Los Angeles wildfire victims

If you're unable to pay your mortgage due to the impact of the wildfires, relief is available. This is true even if your house didn't burn down.

"Any homeowner that's experiencing hardship due to wildfires, it may be their home, it may be their work, both would have an impact on their ability to make their monthly mortgage payment," says Roger Stotts, chief servicing officer at mortgage lender New American Funding. "They're eligible for a forbearance plan immediately."

Forbearance lets you temporarily pause or reduce your mortgage payments while you're experiencing a hardship. When natural disasters happen, major mortgage investors require lenders to offer relief options like forbearance to borrowers.

Your options may depend on what type of loan you have

Many borrowers have loans that are backed by Fannie Mae or Freddie Mac, the government-sponsored enterprises that purchase conforming mortgages from lenders. Both Fannie Mae and Freddie Mac have forbearance options that enable impacted borrowers to pause or reduce their monthly payments for up to 12 months.

A conforming mortgage is one that conforms to Federal Housing Finance Agency loan limits. In Los Angeles County, the conforming loan limit for 2025 is $1,209,750.

If you have a government-backed mortgage, including an FHA, VA, or USDA loan, you'll also have access to this relief.

But borrowers with higher-value properties likely have jumbo loans, which offer loan amounts that exceed conforming limits. These loans have investors that aren't affiliated with federal agencies, so they may have different rules for what types of relief they offer.

"It's different by every jumbo investor," Stotts says. "They make their own rules."

Stotts notes that in many cases, jumbo loan investors have the same or similar guidelines to Fannie and Freddie. But you'll need to check to be sure, since they aren't required to offer forbearance.

The good news is that lenders typically would rather work with borrowers who are struggling than go through the foreclosure process. And California homeowners are protected under the state's Homeowner Bill of Rights, which prevents servicers from starting foreclosure proceedings without contacting you at least 30 days in advance to discuss options to avoid foreclosure.

Gov. Newsom also recently announced that Bank of America, Citi, Chase, U.S. Bank, and Wells Fargo have committed to offering 90-day forbearances with no late fees and no documentation required to qualify for impacted borrowers. These banks will also not start new foreclosures for at least 60 days.

First steps for impacted homeowners

"Once you ascertain that everyone's safe, the first two calls you need to make are to your insurance company and your mortgage servicer to find out what your options are," Stotts says. "We're the two that are going to walk you through this process.

Suneel Garg, partner and private wealth advisor at Socium Advisors, a private client group at Northwestern Mutual, has been helping clients in Los Angeles who have been impacted by the fires. He says working with someone like a financial advisor can help you get through the process of recovering and making sure your finances are protected.

Garg says that impacted individuals will have a lot of things to think about, including protecting themselves from fraud or identity theft, replacing important documents like driver's licenses and birth certificates, and creating a plan to financially recover.

"Call a trusted partner who can help do a lot of that work for you and just make your life easier versus you having to bear the brunt on your own," he advises.

If you don't have a financial advisor, Fannie Mae advises talking to a housing counselor. Department of Housing and Urban Development-approved counselors can help you understand what steps you need to take.

Be sure you're keeping all your receipts and tracking your expenses during this time. If you have additional living expense coverage, your homeowners insurance will cover things like hotel stays and restaurant bills. You should also take pictures of your home and do what you can to secure the property and remove valuables.

Eventually, you may need to think about what you'll do if your homeowners insurance drops you or gets too expensive. While there's currently a one-year moratorium on canceling or non-renewing policies on homes in or near the fire perimeter, there's no guarantee you'll be able to keep your policy once the moratorium expires. Many insurers have been raising premiums and canceling policies in California due to fire risk, and this latest disaster is likely to make the state's insurance crisis worse.