California AB 493 Insurance-Proceeds Escrow Interest
Financial ProductsMortgages & Lending
About
- Requires qualifying mortgage lenders/servicers to pay homeowners 2% annual interest on insurance proceeds held in escrow following a covered property loss, subject to the statute. This is an account based statutory right, not a grant application. If a covered financial institution holds qualifying hazard-insurance proceeds in a loss-draft account pending repair or rebuilding of a qualifying one-to-four-family California residence, the institution must pay at least 2% simple interest per year on the funds while held, credited as required by law.
Eligibility — Residency
- Property must be a qualifying California one-to-four-family residence subject to the statute.
Eligibility — Other
- Covered financial institution must be holding hazard-insurance proceeds pending repair/rebuilding.
Benefits
- 2% annual interest on qualifying insurance proceeds held in escrow (Accrues/credited while qualifying proceeds are held)
- Statutory interest
Documents needed
- Loan/servicer information
- Insurance-proceeds and loss-draft statements
- Communications needed to verify the statutory interest
How to apply
- contact lender/servicer
- file complaint via DFPI
- Processing time: Interest accrues/credits under the lender's administration; dispute resolution timing varies.
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