AL HB55

Mortgage servicers may allow borrowers to make biweekly payments (every two weeks) or semi-monthly payments (twice per month) without penalty, with excess amounts from biweekly payments applied to the loan principal

Borrowers may also submit additional payments to reduce or eliminate escrow shortages, if permitted by the servicer

Mortgage servicers may require borrowers to opt-in to these alternative payment structures

Applies only to consumer mortgages on Alabama real property originated after the effective date; excludes open-end mortgages, home equity products, and servicers already offering penalty-free biweekly or semi-monthly payment options

Effective date: October 1, 2026; passed Alabama House 104-0 on March 3, 2026