CT HB05140

Mortgage holders cannot unreasonably withhold insurance settlement proceeds or endorsements from borrowers when the borrower and mortgage holder are jointly named as payees on a residential property insurance claim.

Borrowers must provide mortgage holders with requested information about the property, loss, insurance claim, and proposed repairs, and must satisfy any reasonable conditions to protect the mortgage holder's interest.

Mortgage holders are not considered to be unreasonably withholding payment if they provide the proceeds within ten business days after borrower compliance, or if they fail to specify conditions within ten business days of receiving the proceeds.

Mortgage holders may legitimately withhold payment if doing so would impair their ability to recover the mortgage debt or if the borrower is in default on the residential mortgage loan.

Mortgage holders may disburse partial payments to borrowers as repairs are completed and collateral value is restored, without affecting their other contractual rights.