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Assembly committee advances bill to require interest on insurance escrow payouts for wildfire-damaged homes
Summary
The Assembly Banking and Finance Committee voted to refer AB 493 to the Assembly Appropriations Committee after testimony that the bill would close a loophole that lets lenders keep interest on post-loss insurance payouts held in escrow, a change supporters said would aid wildfire survivors rebuilding their homes.
The Assembly Banking and Finance Committee voted to refer Assembly Bill 493 to the Assembly Appropriations Committee after testimony that the bill would require lenders to pay interest on post-loss insurance payouts held in escrow for mortgage loans.
Assemblymember Harbidian, the bill’s author, told the committee that current California law requires lenders to pay interest on certain escrow funds, such as property tax escrows, but excludes post-loss insurance payouts. “That hurts wildfire survivors,” Harbidian said, arguing the change would give homeowners “more money to rebuild their homes and their lives.” He clarified at the chair’s request that the bill would apply only to insurance payouts that remain in escrow on or after the…
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