California: Governor Newsom sponsors legislation to provide interest for disaster-affected homeowners
The Californer/10304684

Trending...
News

Feb 10, 2025

Governor Newsom sponsors legislation to provide interest for disaster-affected homeowners

What you need to know: Governor Newsom is sponsoring new legislation to allow homeowners who receive insurance payments for lost or damaged property to receive the interest accrued rather than lenders.

LOS ANGELES — As part of the state's ongoing efforts to support survivors of the LA-area firestorm, Governor Newsom today announced sponsoring new legislation to ensure homeowners, not lenders, benefit from the interest earned on insurance payouts, particularly those impacted by California's most destructive wildfires.

The legislation, authored by Assemblymember John Harabedian (D-Pasadena), seeks to correct an inequity in current law that allows lenders to collect interest on insurance funds held in escrow after a disaster.

"Homeowners rebuilding after a disaster need all the support they can get, including the interest earned on their insurance funds. This is a commonsense solution that ensures that they receive every resource available to help them recover and rebuild."

Governor Gavin Newsom

The legislation, authored by Assemblymember John Haradebian (D-Pasadena), seeks to correct an inequity in current law that allows lenders to collect interest on insurance funds held in escrow after a disaster.

"Homeowners, not insurance companies, should receive the interest earned on their insurance payouts. Many Angelenos devastated by these wildfires have lost nearly everything; they are struggling and need every bit of financial support. This bill puts people over profits, ensuring that rightful insurance payments go to those who need them most," said Assemblymember John Harabedian (D-Pasadena).

After a disaster, insurance payouts are held in escrow until rebuilding is complete, which can take months or even years. During this time, these funds can accrue significant interest.

While California law requires lenders to pay homeowners interest on escrowed funds for property taxes and insurance, it does not extend this requirement to insurance payouts held in escrow. This legislation would amend state law to explicitly require lenders to pay homeowners the interest earned on post-loss insurance payouts, just as they do for other escrowed property expenses

Why this matters

✅ Fairness: Homeowners should receive the interest their insurance funds generate—not lenders.

✅ Disaster recovery: Provides much-needed financial support for wildfire victims rebuilding their homes and communities.
✅ No new burdens on lenders: Simply aligns insurance payout escrow rules with existing California escrow interest law.
✅ Protecting homeowners' rights: Ensures insurance funds are treated the same as other escrowed property expenses.

This legislation ensures that homeowners benefit from the interest earned on insurance funds, particularly those impacted by California's most destructive wildfires.

Speeding recovery, helping survivors

Today's announcement adds to the Governor's work to cut red tape, remove onerous permitting requirements, and help speed rebuilding and recovery from the Los Angeles firestorms. On January 12, Governor Newsom issued an executive order to streamline the rebuilding of homes and businesses destroyed — suspending the California Environmental Quality Act (CEQA) and the California Coastal Act permitting requirements and review.
  • Cutting red tape to help rebuild Los Angeles faster and stronger. Governor Newsom issued an executive order to streamline the rebuilding of homes and businesses destroyed — suspending permitting and review requirements under the California Environmental Quality Act (CEQA) and the California Coastal Act. The Governor also issued an executive order further cutting red tape by reiterating that permitting requirements under the California Coastal Act are suspended for rebuilding efforts and directing the Coastal Commission not to issue guidance or take any action that interferes with or conflicts with the Governor's executive orders. The Governor also issued an executive order removing bureaucratic barriers, extending deadlines, and providing critical regulatory relief to help fire survivors rebuild, access essential services, and recover more quickly.
  • Providing tax and mortgage relief to those impacted by the fires. California postponed the individual tax filing deadline to October 15 for Los Angeles County taxpayers. Additionally, the state extended the January 31, 2025, sales and use tax filing deadline for Los Angeles County taxpayers until April 30 — providing critical tax relief for businesses. Governor Newsom suspended penalties and interest on late property tax payments for a year, effectively extending the state property tax deadline. The Governor also worked with state– and federally-chartered banks that have committed to providing mortgage relief for survivors in certain zip codes.
  • Fast-tracking temporary housing and protecting tenants. To help provide necessary shelter for those immediately impacted by the firestorms, the Governor issued an executive order to make it easier to streamline construction of accessory dwelling units, allow for more temporary trailers and other housing, and suspend fees for mobile home parks. Governor Newsom also issued an executive order that prohibits landlords in Los Angeles County from evicting tenants for sharing their rental with survivors displaced by the Los Angeles-area firestorms.
  • Mobilizing debris removal and cleanup. With an eye toward recovery, the Governor directed fast action on debris removal work and mitigating the potential for mudslides and flooding in areas burned. He also signed an executive order to allow expert federal hazmat crews to start cleaning up properties as a key step in getting people back to their properties safely. The Governor also issued an executive order to help mitigate risk of mudslides and flooding and protect communities by hastening efforts to remove debris, bolster flood defenses, and stabilize hillsides in affected areas.
  • Safeguarding survivors from price gouging. Governor Newsom expanded restrictions to protect survivors from illegal price hikes on rent, hotel and motel costs, and building materials or construction. Report violations to the Office of the Attorney General here.
  • Directing immediate state relief. The Governor signed legislation providing over $2.5 billion to immediately support ongoing emergency response efforts and to jumpstart recovery efforts for Los Angeles. California quickly launched CA.gov/LAfires (https://mclist.us7.list-manage.com/track/click?u=afffa58af0d1d42fee9a20e55&id=3368922576&e=0b26ba1b5c) as a single hub of information and resources to support those impacted and bolsters in-person Disaster Recovery Centers (https://mclist.us7.list-manage.com/track/click?u=afffa58af0d1d42fee9a20e55&id=d90dcd1e27&e=0b26ba1b5c). The Governor also launched LA Rises (https://mclist.us7.list-manage.com/track/click?u=afffa58af0d1d42fee9a20e55&id=3af5ea835f&e=0b26ba1b5c), a unified recovery initiative that brings together private sector leaders to support rebuilding efforts. Governor Newsom announced that individuals and families directly impacted by the recent fires living in certain zip codes may be eligible to receive Disaster CalFresh food benefits (https://mclist.us7.list-manage.com/track/click?u=afffa58af0d1d42fee9a20e55&id=2a8d45645f&e=0b26ba1b5c).
  • Getting kids back in the classroom. Governor Newsom signed an executive order to quickly assist displaced students (https://mclist.us7.list-manage.com/track/click?u=afffa58af0d1d42fee9a20e55&id=8279e45925&e=0b26ba1b5c) in the Los Angeles area and bolster schools affected by the firestorms.
  • Protecting victims from real estate speculators. The Governor issued an executive order to protect firestorm victims (https://mclist.us7.list-manage.com/track/click?u=afffa58af0d1d42fee9a20e55&id=e2fc694f94&e=0b26ba1b5c) from predatory land speculators making aggressive and unsolicited cash offers to purchase their property.
  • Helping businesses and workers get back on their feet. The Governor issued an executive order to support small businesses and workers (https://mclist.us7.list-manage.com/track/click?u=afffa58af0d1d42fee9a20e55&id=ba410937b7&e=0b26ba1b5c), by providing relief to help businesses recover quickly by deferring annual licensing fees and waiving other requirements that may impose barriers to recovery.

Get help today

More on The Californer
For those Californians impacted by the firestorms in Los Angeles, there are resources available.Californians can go to CA.gov/LAfires – a hub for information and resources from state, local and federal government.

Individuals and business owners who sustained losses from wildfires in Los Angeles County can apply for disaster assistance:
  • Online at DisasterAssistance.gov (https://www.disasterassistance.gov/)
  • By calling 800-621-3362
  • By using the FEMA smart phone application (https://apps.apple.com/us/app/fema/id474807486)
  • Assistance is available in over 40 languages (https://www.fema.gov/fact-sheet/fema-speaks-your-language-0#:~:text=After%20dialing%20the%20FEMA%20Helpline,interpreter%20that%20speaks%20your%20language)
  • If you use a relay service, such as video relay service (VRS), captioned telephone service or others, give FEMA the number for that service

Press Releases (https://www.gov.ca.gov/category/press-releases/), Recent News (https://www.gov.ca.gov/category/all/recent-news/)

Recent news

Governor Newsom announces appointments 2.7.25 (https://www.addtoany.com/add_to/facebook?linkurl=https%3A%2F%2Fwww.gov.ca.gov%2F2025%2F02%2F10%2Fgovernor-newsom-sponsors-legislation-to-provide-interest-for-disaster-affected-homeowners%2F&linkname=Governor%20Newsom%20sponsors%20legislation%20to%20provide%20interest%20for%20disaster%26%23x2d%3Baffected%20homeowners%20%7C%20Governor%20of%20California)

Feb 7, 2025

News SACRAMENTO – Governor Gavin Newsom today announced the following appointments:Khalil "KC" Mohseni, of Sacramento, has been appointed Commissioner of the California Department of Financial Protection and Innovation, where he has been the Chief Deputy Director...

Governor Newsom signs legislation 2.7.25 (https://www.gov.ca.gov/2025/02/07/governor-newsom-signs-legislation-2-7-25/)

Feb 7, 2025

News SACRAMENTO – Governor Gavin Newsom today announced that he has signed the following bills: SBX1-1 by Senator Scott Wiener (D-San Francisco) – Budget Act of 2024.SBX1-2 by Senator Scott Wiener (D-San Francisco) – Budget Act of 2024. A signing message can be found...

PSA: Earvin "Magic" Johnson warns Los Angeles fire victims about property predators (https://www.gov.ca.gov/2025/02/07/psa-earvin-magic-johnson-warns-los-angeles-fire-victims-about-property-predators/)

Feb 7, 2025

News LOS ANGELES — Governor Gavin Newsom, LA28 Chairperson and President Casey Wasserman, Dodgers Chairman Mark Walter, and NBA legend Earvin "Magic" Johnson have teamed up through LA Rises to release a new PSA warning fire victims about predatory real estate...

Filed Under: Government, State
Show All News | Report Violation

0 Comments

Latest on The Californer