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How Mortgage Lenders Are Impeding Californians From Rebuilding Fire-Torn LA

  • Assemblymember John Harabedian introduced legislation in 2025, supported by Governor Gavin Newsom, addressing mortgage lenders withholding insurance funds in California wildfire recoveries.
  • The legislation responds to fire victims whose lenders hold insurance proceeds in escrow due to unclear refinance clauses naming lenders co-payees, causing prolonged delays.
  • Many homes, especially in Pacific Palisades, insured for over $1 million, face high interest accruals at 5%, potentially reaching $200,000 over four years needed for rebuilding completion.
  • The legislation requires lenders to refund interest earned on withheld funds to homeowners, aiming to prevent lenders from profiting by delaying payouts during recovery.
  • This bill could alleviate hardships for thousands of fire survivors who navigate bureaucratic hurdles and mortgage company obstructions while attempting to rebuild homes lost in wildfires.
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Cal MattersCal Matters
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How mortgage lenders are impeding Californians from rebuilding fire-torn LA

Guest Commentary written by Robert Kaplan Robert Kaplan is a senior scholar at the Stanford School of Medicine. He was previously a distinguished professor of public health and medicine at UCLA. Margaret Gaston Margaret Gaston is the retired founder and president of the Center for the Future of Teaching and Learning. Like thousands of other families, in January we lost our Pacific Palisades home to wildfire. Within minutes, every house on our …

·Sacramento, United States
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Cal Matters broke the news in Sacramento, United States on Monday, June 2, 2025.
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