LA wildfire recovery aftermath draws Trump scrutiny

Donald Trump said last week that his administration will examine how banks are treating homeowners affected by the last year’s Los Angeles wildfires, singling out Wells Fargo for criticism after meetings with local officials.

In a post on Truth Social, Trump said he met with Los Angeles Mayor Karen Bass and Los Angeles County supervisor Kathryn Barger, among other leaders, to discuss recovery efforts following the fires that “ravaged Los Angeles, and the surrounding area.” He praised insurance companies for their treatment of homeowners but said banks “have a long way to go.”

“The Banks must treat those people, who so horribly lost their Homes in this tragic fire, very fairly and well,” Trump wrote, adding that his administration would be “looking into their actions, effective immediately.”

In a joint statement on Bass’s website, the officials said they had “a very positive discussion” with the president about federal disaster aid and rebuilding funds, “as well as the support of the President to continue joining us in pressuring the insurance companies to pay what they owe — and for the big banks to step up to ease the financial pressure on L.A. families.”

Trump also wrote that Wells Fargo “has been very difficult to deal with” but did not provide details about the actions he intends to review. A spokesperson for Wells Fargo declined to comment when reached by HousingWire.

Donna Schmidt, president and CEO of DLS Servicing, said that although mortgage servicers who are clients of her company have “not identified anything of concern related to forbearance activity either in the affected Los Angeles area or nationally,” risk is still relevant.

“Those properties stuck in permitting or insurance limbo do not provide confidence to the agencies at risk that the matter will be resolved any time soon,” Schmidt said. “Their risk increases proportionally with each delay. Local government ineptitude is not the banks’ nor the agencies’ burden to carry.”

Recovery efforts

The January 2025 Los Angeles wildfires destroyed about 12,000 homes and caused more than $50 billion in damage, with most losses tied to the Eaton and Palisades fires, which were contained by Jan. 31, 2025.

Fueled by drought, low humidity and powerful Santa Ana winds, the fires burned roughly 59 square miles, killed an estimated 440 people and displaced more than 200,000 residents.

In January 2025, California Gov. Gavin Newsom announced that five major lenders — JPMorgan Chase, Wells Fargo, Bank of America, U.S. Bank and Citigroup — would offer 90-day mortgage forbearance to homeowners in fire-affected areas of Los Angeles and Ventura counties. The relief included pauses on credit reporting and the possibility of extended assistance.

In September 2025, Newsom signed Assembly Bill 238 into law, which required lenders to provide up to 12 months of mortgage forbearance for borrowers experiencing financial hardship tied to the disaster.

In January 2026, Trump signed an executive order allowing the federal government to bypass certain state and local regulations in rebuilding efforts after last year’s wildfires, saying that California officials have delayed the recovery.

Under that order, the Department of Homeland Security — through the Federal Emergency Management Agency (FEMA) and the Small Business Administration — was directed to review rules that could override state and local permitting requirements for federally funded rebuilding projects.

In March, the California Mortgage Bankers Association (CMBA) testified before the California Assembly Banking & Finance Committee that AB 238 can provide short-term mortgage relief for January 2025 wildfire victims, but forbearance needs guardrails and a defined path forward.