Fire survivors were finally ready to rebuild homes. A new barrier is leaving them 'demoralized'

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Set us as preferred More than a year after the Eaton fire devastated their community, returning to their beloved Altadena neighborhood finally seemed within reach for Baba Singh and his family.They had secured their insurance payout, gotten rebuilding plans approved and hired a contractor.But then their mortgage company started withholding the couple’s insurance money it held in escrow — allocated specifically for the rebuild.

The inaccessible cash continues to threaten their family’s ability to continue construction.“We’re literally being denied money that doesn’t belong to them,” Singh said of his mortgage company.

“It’s just so demoralizing at this point.”The frustrating situation comes on top of mounting financial strain and housing instability for many fire survivors who are trying to rebuild their homes and lives after the 2025 firestorms.Local and state officials worry the mortgage payout delays could further stymie what’s become an already slow recovery.

This week, Gov.Gavin Newsom called on mortgage companies to better support fire victims, calling “survivors’ ability to access the insurance coverage they’ve paid for ...

foundational to recovery.” “I am concerned that too many financial institutions are not providing fair and fast access to insurance proceeds,” Newsom wrote in a letter to associations representing California banks, credit unions and mortgage lenders.“The state has received dozens of reports of servicers holding funds in excess of the unpaid principal balance in clear violation of federal guidelines.” California Fifteen months after the Los Angeles County fires devastated Altadena and Pacific Palisades, families are facing heightened financial pressures as insurance payments run out and appear to fall short of expected costs, according to a new report.Under...