First off, I just want to say, I hope everyone that is being effected by the fires...

[Javaman]

is safe and sound. It's truly a horrible thing to watch ones memories vanish into a column of smoke.

That said...

I buddy of mine pointed out something really interesting.

Wasn't San Diego one of the hardest hit areas for the subprime lending collapse?

Not knowing the exact areas, these fires may work out as a good thing for some of those folks that were going to abandon, foreclose or default on their loans.

If a person had a house that was insured at X amount, but was really valued at -X amount, if the house goes up in flames, they would get the original X amount to rebuild, correct?

Now don't get me wrong, I seriously doubt anyone was hoping for wild fires and like I said, in the beginning, I hope everyone is safe and sound, but this may just save a few families some truly long term grief in another way.

[Howardx]

1. use the empty foreclosures to house people

fema/feds can pay rent to the banks

[Javaman]

2. Great idea!! nt

[catmandu57]

3. I think that if you're ready to go into forclosure

that means you haven't been paying your mortgage and the company probably hasn't paid the insurance company, I could be wrong let someone who knows clue us in, but, maybe it would be a double whammy a burned out lot and a monkey on their backs.

[rox63]

7. If your in foreclosure, you probably couldn't get a new mortgage anyway

So I doubt this will help anyone. If there is insurance, the money would probably go to the mortgage company.

[CC]

4. Doubt it will really help any one out

even if in foreclosure. Might just make things worse on them.

Really wrote to correct you on the insurance thing. If you insure for X amount but the property appraises for -X amount you will only get the lower figure, not the full insurance amount, even if your mortgage is more than the -X amount. Unless CA has laws in place to avoid it there will be a lot of people pissed when they find out the insurance company thinks their house is worth less than they do. That was a major problem here (MD) after Isabel and I think that is a problem on the Gulf Coast now too. The insurance companies will try to save every dime they can no matter who it screws.


Example- We had a lady here who had flood and homeowners insurance. Her house was wiped out in Isabel (Sep. 2003). Her insurance company decided her house (2,500 sq. feet) was worth $65,000. You can't build a house near that size for that price. 3 years later with a lawyer she got $75,000 but it cost her $145,000 to rebuild a 1800 sq. foot house to replace the original. Oh and the original amount of insurance coverage she had, $325,000 on buildings, $100,000 on contents. She just finally gave up fighting for what she paid for.

[Javaman]

5. Dang, thanks for the info! :) nt

[CC]

6. No problem.

I hope Ca has better laws in place. I know it caused some rethinking and was investigated here. Me, call me paranoid but my insurance agent has been made to come look at my house, take pictures and I update them yearly. My house is well over a hundred years old but it is also post and beam construction. When we have redone rooms we took pictures of the post and beam construction, new wiring and everything as we worked. Post and beam cost a lot more to replace than regular framed houses. We keep a copy of all pictures and numbers and make our agent keep a copy. Good thing she likes us.