As we approach the one-year mark of the January wildfires which burned through 50,000 acres, destroyed 16,000 structures and killed more than two dozen people, financial institutions continue rolling out relief programs and solutions.
Wescom Financial, a credit union based in Pasadena, recently partnered with ForgiveCo, a debt forgiveness public benefit corporation, with a pledge to erase $10 million worth of debt for those most impacted by the Eaton and Palisades fires.
Through its data-driven platform, ForgiveCo leveraged ZIP codes from the burn areas and conducted “a debt-level analysis,” said Ashley White, chief marketing officer at Wescom.
“We want to make sure those people who really need (the relief) are getting it, and that’s what we really love about this partnership with ForgiveCo and the process that they go through with really looking at the data,” White said.
The focus for the program is on unsecured debt with medical debt taking the greatest share of the relief.
Recipients of the debt relief do not have to be members of Wescom. So far, this campaign has erased $5 million in total debt for more than 2,000 residents living in Palisades and the Eaton burn areas. ForgiveCo sent letters to the first round of recipients the week before Thanksgiving. Because this campaign was not something people applied for, it came as a shock for those selected.
“It’s truly a surprise, a delight and a random act of kindness, if you will,” White said.
The amount individuals receive varies by need with an average of $2,000 per beneficiary.
Plans for the second half of the debt relief pledge will take shape over the next couple of years, White said.
In more related news, Bank of America Corp. received regulatory approval to extend mortgage forbearance up to two years for wildfire victims planning to rebuild their homes.
Additionally, the bank will launch a “rebuild line of credit” early next year to help people close the gap between the cost to build their home and their insurance proceeds. For people in Altadena, Bank of America estimates a shortfall of about $300,000 per household; and for Pacific Palisades, they estimate about $900,000 per household, Raul Anaya, the bank’s president for Greater Los Angeles, told the Business Journal in an October interview.
Those who had their original mortgage with the bank will be allowed to keep the current interest rate on their underlying loan when continuing payments on their new home.
“(This) protects their current lower interest rate while providing additional financing to bridge the gap between their insurance payout and today’s costs to rebuild,” Anaya said in a statement. “It’s our hope that more Angelenos will opt to stay and rebuild knowing that these options may be available to them.”
Of the 13,000 residential properties that burned in the fires, about 1,000 had their mortgage with Bank of America, Anaya said.
Joy Chen, the executive director of Eaton Fire Survivors Network, said Bank of America’s offerings are “exactly the types of solutions that fire survivors need as we assess our ability to rebuild or not.”