Financial Institutions - Mortgage Servicers - Insurance Proceeds

HB 1509 requires mortgage servicers in Maryland to deposit insurance proceeds from damaged residential properties into a federally insured interest-bearing account with a minimum 2% annual rate. Borrowers must choose whether to have interest earnings credited back to the account or paid directly to them. Servicers must notify borrowers within 10 business days of receiving proceeds and disburse interest directly within 10 business days of the borrower’s election, with strict limits on fees for direct payments. The law applies to all mortgage servicers handling insurance claims for owner-occupied homes in Maryland, effective July 1, 2026, for existing claims.