July 16, 2026 | Blog
LA Fire Survivors Have the Right to Fair and Timely Payouts to Rebuild
When homeowners don’t pay their mortgage or insurance premiums, they face consequences from their lender or insurance company. But when it comes time to receive funds after a disaster, it’s been hard for homeowners to hold these companies accountable.
By Secretary Rohit Chopra
This week, Governor Newsom warned mortgage companies and mortgage servicers – the companies that work with lenders to collect payments from homeowners – that they shouldn’t improperly delay borrowers’ access to insurance funds or withhold funds in excess of what the borrower owes on a mortgage.
Here’s what we are trying to fix:
Many homeowners affected by the LA fires have already run through a gauntlet of paperwork to file insurance claims. However, many still haven’t been able to get access to their money, even after the insurance company made the payment. It’s stuck with their mortgage company.
When you borrow to buy a home, the terms and conditions of your mortgage typically give your lender certain rights when you get a home insurance payout. That’s because the mortgage lender wants to make sure the money goes into restoring the value of the property.
However, consumers have complained about an array of red tape and bureaucracy to get these funds released. Some Californians are forced to wait for extended periods of time to prove that they have used funds to rebuild and repair. To make matters worse, we have received reports that mortgage servicers are keeping funds in excess of federal guidelines.
Fortunately, some financial firms have already developed expedited pathways to disburse funds quickly. This is critical for rebuilding efforts. We are committed to ensuring that all survivors can access the insurance funds they paid for.
The Governor has directed the Business & Consumer Services Agency and the Department of Financial Protection and Innovation to help hold these firms accountable. Homeowners can submit a complaint about problems accessing their insurance payout from their mortgage company.
The Agency and the Department will collect data and report back on whether or not financial firms are making fair and timely payments. Firms that fail to do so may be subject to enforcement under state and federal consumer protection laws.
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