The two big Los Angeles-area wildfires in January destroyed more than 11,000 single and multifamily homes. For those with insurance and a mortgage on a property came what was probably a new piece of personal finance information: If the insurance company writes a check after a fire, the check comes with two names on it — the property owner's and the bank's.

Turns out the mortgage lender gets to hold the money until the property owner can show they've reached various stages of rebuilding. It's in the fine print of your mortgage document ... what, didn't you see it? And here’s the other surprise: The insurance payout money (it could be hundreds of thousands of dollars or more) pays little if any interest even if it sits for months or years on hold.

A member of the California Assembly whose district includes one of the centers of the fire — Altadena — is pushing a bill to get insurance money held in escrow to homeowners. “Marketplace Morning Report” host David Brancaccio spoke to Assemblyman John Harabedian, a Democrat. The following is an edited transcript of their conversation.

David Brancaccio: So we should explain: I mean who knew — if you were lucky enough to have fire insurance and you're lucky enough to have gotten the insurance company to send some of the money — what happens if the homeowner has a mortgage, owes money to the lender on the property? That check comes to you, but it also comes to somebody else.

John Harabedian: That's exactly right, David. If you have a mortgage on your property and you experienced a complete loss, the post-loss insurance payment actually goes to the mortgage lender, and the mortgage lender will hold on to it — sometimes for a very long, extended period of time. What my bill, AB 493, does is actually make sure that any interest that is earned off of that post-loss insurance payment actually goes to the holder of the policy and isn't kept by the banks.

Brancaccio: Yeah, if it's a low interest rate, it might not be that much money. But if I can get a CD, a certificate of deposit, for 4% if I shop around, 4% on $500,000 that maybe the mortgage company is holding for you is $20,000 after just a year. And you might just be starting your rebuild in a year.

Harabedian: That's right. And as anyone in this position knows full well, there are a lot of needs financially, and most people are underwater. They don't have the bank account to pay for everything, they were underinsured, and so anything that we can do to protect the financial rights of these homeowners and of these victims is really critical.

Brancaccio: Some people may be saying, "How could it be? I don't get interest." But if you look deep in the wording of when you sign the mortgage, there's typically a clause that says this. Your bill would change this. Are you getting traction on that thing?

Harabedian: We're getting a lot of support. I think a lot of people are surprised and confused as to why, historically, this interest wouldn't go to the homeowner who lost their home. And the governor's office has been extremely supportive, and I'm very confident once it gets to his desk, he will sign it and we will change this.

Brancaccio: I was talking to an Altadena homeowner who was just on fire about this issue of not getting interest, and he pointed me to a law that changed in the state of Colorado — in fact, it was just signed into law last May — that would do what you're trying to do here in California. So there is precedent.

Harabedian: There is precedent, and California usually is a leader on smart policy. Unfortunately, in this instance, we're behind. Really, this is about protecting those in one of the most vulnerable positions that they'll ever be in in their lives, and it's really trying to lift them up and make sure that they have as much relief and as much help from all different directions as possible.