HB55 Alabama 2026 Session

Updated Mar 4, 2026

Notable

Summary

Primary Sponsor: Rolanda HollisRepresentative
Democrat
Session: 2026 Regular Session
Title: Mortgages; authorize lenders to mortgagors to make additional mortgage payments
Summary: HB55 would authorize mortgage servicers to allow borrowers to make biweekly or semi-monthly payments and additional payments toward the loan principal without penalty.
What This Bill Does
If passed, the bill would allow mortgage servicers to offer biweekly or semi-monthly payment options and to accept extra payments that reduce the loan principal, all without penalty. Extra payments must be kept separate from regular principal payments, and borrowers must notify the servicer of their intent to use these options. Borrowers could also use these payments to address escrow shortages if the servicer permits, and the act applies only to consumer mortgages secured by Alabama real property originated after the act’s effective date.

Who It Affects
Mortgagors (borrowers) of consumer mortgages in Alabama—gain flexible payment options and potential faster payoff and escrow-shortage relief.
Mortgage servicers/lenders in Alabama—may offer and manage these payment options and must handle opt-in rules and escrow-related payments

Key Provisions
Allows biweekly payments or semi-monthly payments with any excess above annual contractual payments applied to principal without penalty.
Allows mortgagors to make additional payments to reduce or eliminate escrow shortages, if permitted by the servicer, with those payments treated separately from regular principal payments.
Mortgagors must notify the servicer of intent to use these options; servicer may require opt-in for these payment structures.
Applies to consumer mortgages secured by Alabama real property originated after the act’s effective date; excludes open-end mortgages and home equity products; excludes servicers already offering penalty-free options or closed-end products that allow such payments.
Effective date: October 1, 2026

AI-generated summary using openai/gpt-5-nano-2025-08-07 on Mar 3, 2026. May contain errors — refer to the official bill text for accuracy.
Subjects: Businesses & Financial Institutions