Bill > HB55

This bill, effective October 1, 2026, allows mortgage servicers (companies that manage mortgage payments) to permit borrowers (mortgagors) to make additional payments beyond their regular monthly contractual mortgage payment, which includes principal, interest, and any amounts set aside for future expenses like property taxes and insurance (escrow amount). Specifically, mortgage servicers can allow borrowers to make biweekly payments, where any amount exceeding the total annual contractual payments is applied to the loan's principal, or semi-monthly payments of half the monthly contractual amount. Borrowers can also choose to make separate payments to reduce or eliminate any escrow shortage, provided they notify the mortgage servicer. However, mortgage servicers are not required to offer these options and can require borrowers to opt-in. This bill applies only to consumer mortgages on real property in Alabama that are originated after its effective date and does not apply to open-end mortgages or home equity products, nor to servicers already offering penalty-free biweekly or semi-monthly payment options.

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