AB 1603 Summary

• Prohibits mortgage servicers from obtaining force-placed insurance (hazard, flood, or homeowner's) unless there is reasonable basis to believe the borrower failed to maintain required insurance coverage

• Requires mortgage servicers to send written notice by first-class mail and wait at least 30 days after a second notice before imposing force-placed insurance charges, and mandates refunds of all premiums paid when borrower provides proof of existing coverage

• Requires mortgage servicers to advance payments to continue a borrower's existing insurance policy if it is paid through an escrow account, unless the borrower or insurance company cancels it

• Prohibits mortgage servicers from obtaining force-placed insurance from affiliated entities, splitting fees, accepting referral fees, or placing insurance in excess of replacement value or outstanding loan balance without written borrower request

• Authorizes borrowers to sue for violations and recover attorney's fees plus the greater of actual damages or $5,000, and authorizes Attorney General, district attorneys, and city attorneys to seek injunctive relief, restitution, and civil penalties up to $10,000