When a disaster damages a home, receiving an insurance payment is only one part of the recovery. Getting those funds released so repairs can move forward can bring another set of challenges.
California is taking a closer look at that process. Following complaints from homeowners affected by the 2025 Los Angeles area wildfires, state regulators are requiring financial institutions to report on their handling of insurance proceeds. The first submissions are due October 29.
National Mortgage News recently spoke with DLS Servicing Managing Director Donna Schmidt about the requirement and what it means for servicers.
The Information Should Already Be Within Reach
The reports must explain the amount of insurance proceeds received, whether funds were fully disbursed, how long disbursement took, and the reasons for any delays or withholding.
Donna’s perspective is practical: servicers with the right technology and borrower communication capabilities should be positioned to respond.
“As long as you have that technology available to be able to communicate back and forth to a borrower, to get the latest information — and you can zoom in based on ZIP code and have the ability to search your portfolio, this shouldn’t be difficult for a servicer of any size,” she told National Mortgage News.
Her comments point to the importance of visibility, knowing which borrowers are affected, maintaining current information, and being able to locate it when needed.
Reporting Is Only Part of the Challenge
Understanding why funds have not moved is equally important. As the article explains, delays do not necessarily originate with the servicer. Repair verification and the volume of claims concentrated in one area can complicate the process. Donna also noted that technologies such as drone inspections are helping expedite verification.
For servicers, the takeaway goes beyond meeting a reporting deadline. Clear borrower communication and accessible portfolio information help teams explain where a file stands and distinguish a necessary step from an avoidable delay.
Read the full National Mortgage News article.