Bill
HB 5308
HB 5308 requires lenders/servicers to accept and apply partial mortgage payments, limit extra fees, and protect borrowers from automatic default or rushed foreclosures.
Status and key dates
- Introduced: March 14, 2025
- Passed both chambers: May 26, 2025 (final Senate passage reported May 26)
- Sent to Governor: May 28, 2025; Signed by Governor: June 20, 2025
- Effective date: September 1, 2025
Note on source material
- The legislative text of HB 5308 was not provided. The summary below therefore (A) states the confirmed procedural facts above and (B) describes the bill’s purpose and the types of provisions such a bill typically contains. For an authoritative reading, consult the enrolled bill text and committee report.
Purpose / intent
- The bill’s title — “An Act Concerning Partial Mortgage Payments” — indicates the measure addresses how mortgage lenders and servicers must handle partial payments from borrowers. The general policy aim of such legislation is to reduce borrower harm (including unintended foreclosure) when a borrower cannot make a full monthly mortgage payment, by setting rules for acceptance, crediting, and treatment of partial payments.
Typical key provisions (likely topics addressed)
- Acceptance and application of partial payments
- Whether and when a servicer must accept partial payments and how they must be applied (to interest, fees, principal, or escrow).
- Effect on delinquency/foreclosure
- Whether a partial payment stops or delays a default or foreclosure timeline, and whether acceptance of a partial payment prevents the servicer from declaring default for that installment.
- Fee and charge limitations
- Prohibitions or limits on charging late fees, penalties, or additional interest solely because a payment was partial (subject to cure requirements).
- Notice and communications requirements
- Required disclosures to borrowers about how partial payments are handled, including reinstatement rights, cure periods, and how payments are posted.
- Recordkeeping and reporting
- Requirements for lenders/servicers to document receipt and application of partial payments and to provide borrowers with statements.
- Exceptions and scope
- Possible carve-outs for certain loan types (e.g., reverse mortgages, HELOCs), investor or pooling agreements, or federally regulated lenders; preemption language may be included.
- Enforcement and remedies
- Administrative or civil remedies for borrowers and penalties for violations; interaction with foreclosure procedures and timelines.
Who would be affected
- Primary: mortgage borrowers who cannot make full monthly payments (including those experiencing temporary hardship).
- Secondary: mortgage servicers and lenders (obligations for receipt, application, notices, and recordkeeping), mortgage investors (possible impacts on payment allocation rules), courts (foreclosure cases), and consumer protection agencies.
Procedural notes / next steps
- HB 5308 was reported favorably without amendment in committee and was enacted, becoming law effective 9/1/2025. To determine exact obligations, exceptions, and enforcement mechanisms, review the enrolled bill text and the committee report. Legal counsel or state regulatory guidance may be necessary for implementation by servicers and interpretation by borrowers.
Compiled from official sources — confirm details with the bill’s official record.
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