Bill > S532

This bill amends Chapter 167E of the General Laws to establish new responsibilities for lending institutions regarding property insurance premiums paid from escrowed funds. Specifically, it introduces Section 8A, which states that if a lender neglects to pay a property insurance premium when it is due, and there are enough funds in the borrower's escrow account (a special account held by the lender to collect funds for taxes and insurance) to cover the payment, the lender will be held liable for any loss the property owner suffers as a direct result of this failure. However, the lender's liability for such a loss will be capped at the coverage limits of the insurance policy that has lapsed. Furthermore, the bill mandates that the lender must pay the overdue insurance premium and any additional costs associated with obtaining a new insurance policy for a period of three years.