Bill > SB1366

This bill requires licensed mortgage servicers and financial institutions to follow specific procedures when handling insurance proceeds related to a mortgage loan during a state of emergency declared by the governor. The bill mandates that within 30 days of receiving insurance proceeds, the financial institution must contact the borrower to determine whether the funds should be applied to the mortgage loan balance or placed in an escrow account. If the insurance proceeds are sufficient to pay off the mortgage, the institution must do so with the borrower's consent and disburse any excess funds. If the funds are insufficient or the borrower intends to rebuild, the proceeds must be placed in an interest-bearing account. The financial institution must credit the account's interest to the borrower monthly and cannot charge any fees for maintaining or disbursing the interest. This legislation aims to protect homeowners by ensuring transparent and borrower-friendly handling of insurance proceeds during emergency situations, providing clear guidelines for mortgage servicers and financial institutions to follow when processing insurance claims related to residential properties.

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https://www.capitol.hawaii.gov/session/measure_indiv.aspx?billtype=SB&billnumber=1366&year=2026