Bill > HB1047

This bill establishes new requirements for Hawaii financial institutions and mortgage servicers during a state of emergency regarding the handling of insurance proceeds related to residential mortgage loans. Specifically, within 30 days of receiving insurance proceeds from a property damage claim, financial institutions must contact the borrower to determine whether the funds should be applied directly to the mortgage loan's principal balance or placed in an interest-bearing escrow account. If the insurance proceeds are sufficient to pay off the mortgage, the financial institution can do so with the borrower's consent and disburse any excess funds. If the funds are insufficient to pay off the loan or the borrower intends to rebuild, the proceeds must be placed in an interest-bearing escrow account. The bill mandates that the interest accrued in this account be credited to the borrower's account monthly, and critically, prohibits financial institutions from charging any fees for maintaining or disbursing the interest earned. This legislation aims to provide clear guidance and consumer protections for homeowners dealing with insurance claims during emergency situations, ensuring transparency and fair treatment in the handling of insurance proceeds.

Budget and Finance, Business and Industry

https://www.capitol.hawaii.gov/session/measure_indiv.aspx?billtype=HB&billnumber=1047&year=2025