Bill > S787

This bill establishes comprehensive protections for homeowners during the insurance loss draft (insurance payout) process after property damage. The legislation defines a loss draft as insurance money issued to homeowners following events like fires, floods, or storms, and mandates that mortgage lenders must not transfer a mortgage while loss draft funds are pending. The bill requires lenders to provide homeowners with options for receiving funds (like direct deposit or check), and give a timeline for fund disbursement. If lenders retain funds for over 30 days, they must pay interest to the homeowner, calculated at the current annual percentage rate. The bill also mandates that new mortgage documents include a dedicated section explaining the lender's loss draft claim process, and requires written notification if a mortgage is sold to another lender. Additionally, the Commonwealth of Massachusetts will establish a zero-interest loan fund of up to $15,000 to help homeowners with repairs during claim delays. Lenders who fail to comply with these provisions can be penalized up to 5% of the total loan value for each violation, with collected penalties being redirected into the zero-interest loan fund. The act will take effect immediately upon passage, providing swift consumer protections in the insurance and mortgage lending process.

Budget and Finance, Business and Industry

https://malegislature.gov/Bills/194/S787