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Current as of January 01, 2023 | Updated by FindLaw Staff
A. If a mortgagee or mortgage servicer is presented with a jointly payable insurance proceeds check, draft, or other negotiable instrument for residential immovable property damage, which contains the borrower-payee's endorsement, and the mortgagee or mortgage servicer receives a written request from the borrower-payee to release excess funds, then the mortgagee or mortgage servicer shall have fifteen business days after receiving such request and such check, draft, or other negotiable instrument to provide its endorsements and return all excess funds provided for in Subsection B of this Section. The fifteen-business-day timeline for releasing excess funds provided by this Section shall not apply when the insurance proceeds check, draft, or other negotiable instrument requires the endorsement of multiple mortgagees or lien holders.
B. For purposes of this Section, the term “excess funds” shall mean insurance funds in excess of both of the following:
(1) All loan balances of any mortgagee or mortgage servicer named as payee on the insurance claim check, draft, or other negotiable instrument calculated as of the thirtieth day following receipt of the request and check or draft as outlined in Subsection A of this Section.
(2) Six months of future accrued interest as calculated pursuant to the terms of the mortgage loans and calculated from the date of the payoff explained in Paragraph (1) of this Subsection.
C. (1) The commissioner may impose civil money penalties of up to five hundred dollars per day of each day a mortgagee or mortgage servicer fails to comply with the requirements of Subsection B of this Section. The penalties provided in this Paragraph shall not exceed five thousand dollars per violation.
(2) Penalties shall be due and payable upon notice of their assessment to the mortgagee or mortgage servicer, unless set aside after an administrative hearing pursuant to the provisions of the Administrative Procedure Act. 1 The assessment of civil money penalties shall be final and definitive and subject to enforcement by the commissioner through judicial proceedings.
D. The provisions of this Section shall apply only to residential mortgage loans secured by a property that contains one to four residential dwelling units. However, the provisions of this Section shall not apply to a mortgagee or mortgage servicer when the borrower-payee is in default on his mortgage loan, past due with payments on his mortgage loan, or in foreclosure related to his mortgage loan.
E. The provisions of this Section shall not impair the contractual rights of a mortgagee or mortgage servicer related to all loan balances and accrued interest as described in Paragraphs (B)(1) and (2) of this Section.
Cite this article: FindLaw.com - Louisiana Revised Statutes Tit. 6, § 338. Insurance settlement proceeds; return of excess funds; enforcement - last updated January 01, 2023 | https://codes.findlaw.com/la/revised-statutes/la-rev-stat-tit-6-sect-338/
FindLaw Codes may not reflect the most recent version of the law in your jurisdiction. Please verify the status of the code you are researching with the state legislature or via Westlaw before relying on it for your legal needs.
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