Fire season is well underway here in California, and is already impacting residents on a historic scale.
Fires continue to burn across the state, so far having destroyed over 1,000 homes at the time of publication. [See this Mercury News map for the status on current wildfires]
Homeowners impacted by California’s wildfires may be eligible for a temporary stop or reduction in mortgage payments. Fannie Mae and Freddie Mac have directed mortgage servicers of mortgages paid by affected homeowners to halt or reduce mortgage payments for up to 12 months without penalty.
To receive the full benefit, homeowners need to contact their mortgage servicer. Servicers are also authorized to suspend or reduce mortgage payments for up to 90 days without getting in touch with the homeowner. Eligible homeowners may include those whose homes have been directly impacted and those who work in areas affected by the wildfires.
When homes are destroyed or made uninhabitable by wildfire, residents who need to relocate turn primarily to rentals for shelter while their homes are being rebuilt. However, many of these wildfires are occurring in parts of the state where housing is already in short supply.
With the surge in demand for rentals, the potential for price gouging is high.
Price gouging occurs when landlords charge rents significantly higher following an emergency. In this case, real estate licensees who increase asking rent by 10% or more immediately following a state of emergency are committing a misdemeanor and may receive discipline action from the California Department of Real Estate (DRE).
This disciplinary action may include a fine of up to $10,000 and possibly even jail time.
Victims and observers of price gouging may file a complaint at the DRE’s website, here.