Bill > HB1047

This bill establishes new requirements for Hawaii financial institutions and mortgage servicers during a state of emergency, specifically regarding the handling of insurance proceeds related to damaged or destroyed residential properties. When a state of emergency is declared by the governor, these institutions must contact borrowers within 30 days of receiving insurance proceeds to determine whether the funds should be applied directly to the mortgage loan balance or placed in an interest-bearing escrow account. If the insurance proceeds are sufficient to pay off the mortgage, the institution must pay off the loan with the borrower's consent and disburse any excess funds. If the proceeds are insufficient to pay off the loan or the borrower intends to rebuild, the funds must be placed in an interest-bearing escrow account. The bill mandates that any interest accrued in this account must 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 guidelines and consumer protections for homeowners dealing with property damage during emergency situations, ensuring transparent and fair handling of insurance proceeds.

Budget and Finance, Business and Industry

https://www.capitol.hawaii.gov/session/measure_indiv.aspx?billtype=HB&billnumber=1047&year=2026