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| 2 | 2 | | SENATE DOCKET, NO. 2189 FILED ON: 1/20/2023 |
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| 3 | 3 | | SENATE . . . . . . . . . . . . . . No. 685 |
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| 4 | 4 | | The Commonwealth of Massachusetts |
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| 5 | 5 | | _________________ |
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| 6 | 6 | | PRESENTED BY: |
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| 7 | 7 | | Mark C. Montigny |
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| 8 | 8 | | _________________ |
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| 9 | 9 | | To the Honorable Senate and House of Representatives of the Commonwealth of Massachusetts in General |
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| 10 | 10 | | Court assembled: |
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| 11 | 11 | | The undersigned legislators and/or citizens respectfully petition for the adoption of the accompanying bill: |
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| 12 | 12 | | An Act relative to the fiduciary responsibility of lenders for non-payment of insurance premiums |
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| 13 | 13 | | from escrowed accounts. |
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| 14 | 14 | | _______________ |
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| 15 | 15 | | PETITION OF: |
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| 16 | 16 | | NAME:DISTRICT/ADDRESS :Mark C. MontignySecond Bristol and Plymouth 1 of 2 |
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| 17 | 17 | | SENATE DOCKET, NO. 2189 FILED ON: 1/20/2023 |
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| 18 | 18 | | SENATE . . . . . . . . . . . . . . No. 685 |
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| 19 | 19 | | By Mr. Montigny, a petition (accompanied by bill, Senate, No. 685) of Mark C. Montigny for |
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| 20 | 20 | | legislation relative to the fiduciary responsibility of lenders for non-payment of insurance |
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| 21 | 21 | | premiums from escrowed accounts. Financial Services. |
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| 22 | 22 | | The Commonwealth of Massachusetts |
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| 23 | 23 | | _______________ |
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| 24 | 24 | | In the One Hundred and Ninety-Third General Court |
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| 25 | 25 | | (2023-2024) |
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| 26 | 26 | | _______________ |
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| 27 | 27 | | An Act relative to the fiduciary responsibility of lenders for non-payment of insurance premiums |
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| 28 | 28 | | from escrowed accounts. |
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| 29 | 29 | | Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority |
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| 30 | 30 | | of the same, as follows: |
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| 31 | 31 | | 1 SECTION 1. Section 4 of Chapter 167E of the General Laws, as so appearing in the |
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| 32 | 32 | | 22020 Official Edition, is hereby amended by inserting after subsection (c), the following |
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| 33 | 33 | | 3subsection:- |
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| 34 | 34 | | 4 “(d) If a bank requires, as part of its loan policies, that a borrower escrow the insurance |
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| 35 | 35 | | 5premium for property insurance on real estate secured by a mortgage loan and said bank, as a |
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| 36 | 36 | | 6result of neglect, fails to pay the insurance premium on a mortgage loan when the insurance |
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| 37 | 37 | | 7premium is due and there are sufficient escrowed funds on deposit to pay said insurance |
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| 38 | 38 | | 8premium, and if the property owner suffers a loss as a result of this failure, then the bank is liable |
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| 39 | 39 | | 9for the loss; except, however, that with respect to any loss, which would otherwise have been |
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| 40 | 40 | | 10insured, the extent of the liability shall not exceed the coverage limits of any insurance policy, |
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| 41 | 41 | | 11which has lapsed. The bank shall pay the insurance premium and any increased cost for securing 2 of 2 |
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| 42 | 42 | | 12a new insurance policy for a period of three (3) years. If the bank is late in paying the insurance |
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| 43 | 43 | | 13premium, the bank shall pay the late fee charged by the insurance company.”. |
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