The bill requires a mortgage servicer to disclose certain
information to a borrower concerning the disbursement of insurance proceeds to the borrower in the event that a residential property that is subject to a mortgage is damaged or destroyed and an insurance company pays a claim associated with such damage or destruction.
In the event that half or more of a residential property is damaged
or destroyed, a mortgage servicer must work with the borrower to create a repair plan or a rebuild plan that includes specific milestones that require the mortgage servicer to disburse insurance proceeds. However, a mortgage servicer must also disburse insurance proceeds to a borrower in specified amounts, depending on the amount of the insurance proceeds and whether the borrower is delinquent in making payments on the mortgage.
A mortgage servicer must promptly disburse to a borrower any
amount of insurance proceeds in excess of the remaining amount that the borrower owes on the mortgage.
A mortgage servicer must hold in an interest-bearing account any
insurance proceeds that the mortgage servicer does not immediately disburse to a borrower. A mortgage servicer must ensure that any interest that is credited to the account is credited and disbursed to the borrower.
A mortgage servicer must retain for at least 4 years all written and
electronic communications between the mortgage servicer and a borrower.
