MA S787

Prohibits mortgage lenders from transferring a mortgage to another lender once a homeowner initiates a loss draft claim until all funds are disbursed

Requires homeowners be given choice of receiving loss draft funds via direct deposit, paper check, or mutually agreed method, along with an expected disbursement timeline

Entitles homeowners to interest on loss draft funds retained by lenders for more than 30 days, calculated at the current APR and either paid out or applied to the loan balance

Mandates all new mortgage documents include disclosure of the lender's loss draft claim process, with written notification required when mortgages are sold

Establishes a state zero-interest loan fund providing up to $15,000 per homeowner for repairs during loss draft delays, funded by penalties of up to 5% of loan value per violation