For the purpose of this section, a partial payment is a payment of any amount less than the full amount due under the terms of the mortgage at the time the payment is tendered, including late charges.

Except as provided in this section, the mortgagee shall accept any partial payment and either apply it to the mortgagor's account or identify it with the mortgagor's account and hold it in a trust account pending disposition. When partial payments held for disposition aggregate a full monthly installment they shall be applied to the mortgagor's account, thus advancing the date of the oldest unpaid installment but not the date on which the account first became delinquent.

If the mortgage is not in default, a partial payment may be returned to the mortgagor with a letter of explanation.

If the mortgage is in default, a partial payment may be returned to the mortgagor with a letter of explanation in any of the following circumstances:

When payment aggregates less than 50 percent of the amount then due;

The payment is less than the amount agreed to in a forbearance plan, whether or not reduced to writing;

The property is occupied by a tenant who is paying rent and the rentals are not being applied to the mortgage payments;

Foreclosure has been commenced. (Foreclosure is commenced when the first action required for foreclosure under applicable law is taken.)

Under the following circumstances the mortgagee may return any partial payment received more than 14 days after the mortgagee has mailed to the mortgagor a statement of the full amount due, including late charges, and a notice of intention to return any payment less than such amount.

Four or more monthly installments are due and unpaid, or

A delinquency of any amount has continued for at least six months since the account first became delinquent.