Massachusetts S685 amends the fiduciary responsibility of lenders for non-payment of insurance premiums from escrowed accounts.

Massachusetts S685 amends Chapter 167E of the General Laws to clarify the liability of banks that fail to pay insurance premiums from escrowed accounts. If a bank requires borrowers to escrow property insurance premiums and neglects to pay the premium when due, despite having sufficient escrowed funds, the bank becomes liable for any loss the property owner suffers. The bank must cover the insurance premium and any increased costs for securing a new policy for three years. Additionally, if the bank is late in paying the premium, it must also cover the late fee charged by the insurance company.

Massachusetts S685 amends the fiduciary responsibility of lenders for non-payment of insurance premiums from escrowed accounts.

Massachusetts S685 amends Chapter 167E of the General Laws to clarify the liability of banks that fail to pay insurance premiums from escrowed accounts. If a bank requires borrowers to escrow property insurance premiums and neglects to pay the premium when due, despite having sufficient escrowed funds, the bank becomes liable for any loss the property owner suffers. The bank must cover the insurance premium and any increased costs for securing a new policy for three years. Additionally, if the bank is late in paying the premium, it must also cover the late fee charged by the insurance company.