Elvia Battoe was asleep in her Altadena home the night the Eaton Fire ignited on Jan. 7, and was woken up by one of her tenants who had just returned from work. They woke up the other tenants who rented rooms from her and all left for a nearby 24-hour IHOP to escape the heavy smoke being pushed towards Battoe’s home by the 80 mph winds.
“Mother nature is mother nature. She doesn’t tell you ‘I’m coming’ or ‘get ready for me,’” said Battoe.
The power had been out for quite some time, there was no television, no internet and no way for the senior who still uses a landline to know she was in danger. Other residents may have received an evacuation notice on their cell phones; however, no police, no firefighters, no one came knocking on their door or made a bullhorn announcement to tell them to leave.
The Eaton Fire burned over 14,000 acres, destroying over 9,000 structures and killing 18 civilians according to the California Department of Forestry and Fire Protection (Cal Fire).
Battoe’s home of 50 years, located around the corner from Altadena Drive and Fair Oaks Avenue, was at the center of that destruction. Blocks in every direction were burned to the ground. Her neighbor down the street and his dog died in the flames because no one came to evacuate them.
She ended up at the Pasadena Convention Center, where her friend Cindy Jackman managed to find her among the crowd of over a thousand displaced people. Battoe is now staying in a small apartment in Pasadena while trying to navigate the rebuilding process.
“The whole process for someone who only knows how to use a home phone [is difficult],” said Jackman. “Even with the insurance. They wanted everything uploaded, downloaded and they did not offer any resources for an 80-year-old woman who is computer illiterate.”
To make things more complicated, Battoe is underinsured with a reverse mortgage.
After falling prey to a scam, being liable for family members’ poor financial decisions and having a life-threatening case of COVID-19, Battoe found herself without retirement savings and in need of an option to continue living in the home she loved so dearly. She was advised to take out a reverse mortgage, an option that worked well for Battoe until disaster struck.
“She was not in a bad situation prior to the fire,” claimed Jackman, “the fire financially ruined her.”
Reverse mortgages are only available to seniors, ages 62 and older, and are typically taken out to give someone additional financial resources so they can age in place and continue living in their home. One in 10 reverse mortgages end in foreclosure, so they should only be considered as a last resort.
With a traditional mortgage, borrowers make monthly payments for the money they borrowed until they own the home outright. Borrowers pay interest on the loan; however, over time the amount they owe will decrease, while the equity in their home will increase.
Conversely, borrowers do not make payments on a reverse mortgage. Instead, it gets taken from their home equity. Residents are still required to cover taxes, maintenance and insurance on the home, and the amount borrowers owe increases over time, while the equity in their home decreases. The bank gets paid back at the end of the loan term, or upon the death or change of primary residence of the borrower.
Aimee Williams, associate vice president of Justice for Tenants, Homeowners and the Unhoused at Bet Tzedek Legal Services, explained that “reverse mortgage borrowers are a uniquely vulnerable community” when a natural disaster strikes.
“It’s the kind of loan that increases over time rather than decreases,” said Williams. “So when the home burns, they’re put in a unique situation where they may have less financial resources than other kinds of borrowers or homeowners out there, and less ability to recover.”
Navigating the rebuilding process and accessing financial assistance is stressful and can be complicated for any fire victim, but for seniors who are reverse mortgage borrowers, it can be even more difficult.
Battoe now owes over $800,000 on the reverse mortgage she took out six years ago. If she decides to move, she would be required to start paying back what is owed.
“If I sell the property to pay the mortgage, where am I gonna go?” questioned Battoe.
The loss of her home was also the loss of Battoe’s monthly income. When her three children moved out, she decided to rent out their rooms and the back Accessory Dwelling Unit (ADU). Her tenants helped provide companionship and $4,000 a month in income, which she used to cover her property taxes and insurance.
“Every place you go for help, for resources, … nobody knows the answers for reverse mortgages,” said Jackman, who has been helping Battoe navigate recovery over the last four months.
Recently, the two eagerly attended a free emergency workshop led by Williams, specifically designed to help homeowners understand the financial and legal implications of disaster recovery related to their reverse mortgage agreements.
Hosted by the Los Angeles County at the MonteCredo Senior Living Community in Altadena, the event also offered additional support from representatives of the Federal Housing Administration, the United States Department of Housing and Urban Development and local legal aid organizations offering one-on-one consultations.
Attendees learned about their rights as homeowners, the steps and requirements to rebuild, how to negotiate with insurance and mortgage companies and what free resources are available for financial and legal consulting.
“Not everyone is going to have enough insurance money to rebuild their home exactly how it was without incurring any further financial debt,” said Williams. “Quite often, we see this patchwork of financial resources,” which could include financial help from family, FEMA assistance or participating in a class action lawsuit.
Although Battoe’s home was appraised at $1.3 million, the insurance company has only offered her $374,000 – hardly enough to rebuild what was lost.
“It’s like a lion against a little rat,” noted one audience member about how it feels to battle with insurance companies.
“There are ways of working together here with other community members, so that you don’t necessarily have to figure this out alone and can learn from what others are doing,” responded Williams.
This entails communicating with others on how they are navigating the process, or neighbors coordinating aspects of their rebuilds, such as pouring the foundation for their homes at the same time to lower costs.
“Disaster recovery is going to need everyone’s participation,” she continued. “We’ve seen a lot of people who came today with their neighbors and other community members, and that’s really what it’s going to take – the community banding together, private, public and grassroots, neighbors helping neighbors – in order to recover.”
Battoe said the event “recharged our battery,” providing them the strength and knowledge to continue with the rebuilding process.
This is not the first hardship she has experienced, but she is a survivor, continuing to battle the obstacles life throws in her path. Over the years, Battoe has built a network of friends and neighbors whom she has helped care for when they were in need. Now, it may be their turn to help Battoe through this next obstacle.
“Her roses were all burned and now they’re coming back to life,” said Jackman, who offered encouragement. “I told her, that’s you. You’re going to rebloom.”
I am a mortgage broker I have placed reverse mortgage loans over the past 20 yrs. If done right, it is not a last resort vehicle at all. The first thing in this case is that the homeowner needs to challenge the insurance company on the cost of the rebuild and reimburse her for her losses. She can hire her own adjuster to get that done.