The proposed bill authorizes mortgage servicers in Alabama to permit mortgagors to make biweekly or semi-monthly mortgage payments, as well as additional payments towards the mortgage principal, without incurring any penalties. The bill defines key terms such as "biweekly," "semi-monthly," "mortgage servicer," and "mortgagor," and outlines the conditions under which these payment options can be exercised. Specifically, it allows mortgagors to make biweekly payments where any excess amount beyond the annual contractual mortgage payments is applied to the principal, or to make semi-monthly payments that are half of the total monthly payment. Additionally, mortgagors can opt to make payments to address any escrow shortages, provided they notify the mortgage servicer as required.

The bill also stipulates that it applies only to consumer mortgages secured by real property in Alabama that are originated after the act's effective date, which is set for October 1, 2026. It explicitly excludes open-end mortgages or home equity products and does not apply to mortgage servicers that already allow biweekly or semi-monthly payments without penalties. The language of the bill does not include any deletions from current law but introduces new provisions to facilitate these payment options for mortgagors.