Real estate and property law
Those who lost homes in massive Wash. mudslide may still owe mortgage payments
Posted Apr 2, 2014 4:05 PM CDT
By Martha Neil
It appears that at least most of the dozens of homes destroyed in a Washington state mudslide a little over a week ago didn't have the special landslide coverage required to insure against such damage.
And even if they had, homeowners likely will not be permitted by government officials to rebuild, the Seattle Times reports.
Likewise, most homeowners also don't appear to have had mortgage insurance to cover payments they may not be able to make, the MyNorthwest.com reports.
That leaves few options for survivors and families of the 29 victims killed by the March 22 collapse of a Snohomish County hillside soggy with precipitation.
While federal disaster relief may be forthcoming, it isn't expected to cover mortgages on homes that may now effectively be worth nothing. And although some lenders have expressed willingness to work with homeowners, many appear to be discussing temporary options, such as forbearance, rather than simply writing off the entire home loan. That may leave those without savings sufficient to cover a hefty unpaid principal balance no choice but to declare bankruptcy.
Coastal Community Bank in nearby Everett is willing to write off loans, if need be. But CEO Eric Sprink told the Times other banks will have to agree to do so as well if the area is ever to recover.
His advice to affected homeowners and the survivors of those who died is to take a deep breath and get on the phone.
“The most important thing people can do is call their bank and ask, ‘What do we do?’ ” Sprink said. “They need to start asking the hard questions of their banks and insurance companies to get some answers so they can make some tough decisions."
United Press International: "Confirmed death toll in Washington mudslide rises to 29"