On May 20, Colorado enacted HB24-1011 (the “Act”), which predominantly addressed mortgage servicers’ disbursement of insurance proceeds.

The Act states that, upon the borrower’s request, mortgage servicers must disclose the specific conditions under which the servicer will disburse insurance proceeds in the event that the underlying property was damaged and an insurance company paid proceeds to satisfy the claim. Among other requirements, if the borrower is not delinquent or was less than thirty-one days delinquent in respect of his or her mortgage payments, the borrower is responsible for creating a repair or rebuild plan for the mortgaged property and submitting such plan to the mortgage servicer for approval. In turn, the mortgage servicer is responsible for approving or denying a plan within thirty days of receipt. Additionally, the borrower is entitled to reimbursement of certain advance payments made to a contractor or to purchase materials for the repair or rebuild. The Act outlines a different process if a borrower is more than thirty-one days delinquent on a mortgage payment. The Act provides for additional details regarding the disbursement of proceeds, including the amounts of disbursement.

Additionally, the Act provides that (1) mortgage servicers must disclose, among other items of information, the mortgage interest associated with mortgages upon the commencing of servicing and thereafter as the request of the borrower, and (2) a mortgage servicer must keep all communications with a borrower for at least four years. The Act became effective upon passage.