California lenders ordered to account for wildfire insurance payouts
When a mortgaged home is damaged, insurers typically route payouts through the lender, which holds the money in escrow and releases it in stages as rebuilding progresses — a process that survivors say has been mired in documentation demands and unexplained holds, deepening the post-wildfire housing crisis facing California homeowners and brokers.
Escrow delays compounding hardship for survivors
The DFPI has logged more than 160 confidential consumer complaints about delayed or withheld proceeds since January 2025.
In July 2026, Gov. Gavin Newsom wrote to the California Mortgage Bankers Association (CMBA), the California Bankers Association (CBA), and California’s credit unions, flagging “unnecessary red tape” and directing state agencies to collect data on institutions holding funds beyond 10 business days.
“It’s unacceptable that after running through a gauntlet of paperwork to file insurance claims, some wildfire survivors still have not gotten access to the funds they need to rebuild,” said Rohit Chopra, secretary of California’s Business and Consumer Services Agency.
Joy Chen, executive director of Every Fire Survivor’s Network — a nonprofit led by survivors of the January 2025 Los Angeles-area fires — was pointed: “Every day that they wait to pay us, they’re collecting interest. And that interest really belongs to us.”
