Monday, April 30, 2007

query: relying on mortgage payoff letter Pennsylvania

Well, give yourself a fighting chance.

  1. When possible, request payoffs in writing - including the recording information.
  2. Compare the information on the payoff letter to the title file. Make sure the payoff reasonably matches the mortgage on record and is for the correct property.
  3. Read the payoff letter and adhere to its terms.
By doing those three things you give yourself a fighting chance of getting help should the mortgage lender attempt to change the terms after closing. If a payoff has been refused and you have diligently followed all instructions, work your way up the chain of command until you get a supervisor who will work with you. Though the lender may not honor the payoff letter, they may at least assist you in resolution.

If you can't find a solution within 24 hours contact your title underwriter without delay. They will review the matter and advise how to best handle it.


John Povejsil said...

I've never seen recording information on a payoff statement, but then we don't do that many small bank payoffs (maybe 5%, and I usually don't see them unless there's a problem). I started putting the MERS mortgage identification number (MIN) on our commitments, and that has made a huge difference. Oftentimes, with MERS as nominee mortgages, the party being paid off cannot be connected to the lender except through the MIN.

Diane Cipa, The Closing Specialists® said...

You're right, John, the recording info is rarely on the payoff statement. More than one title underwriter has recommended that we include the recording information in our written request. The onus then, theorectically, is on the mortgage lender to give us the correct mortgage. This is especially true when the borrower has more than one property mortgaged through the same lender.

Even though in practice, the lender giving the payoff might not check, having that letter in the file may give you or your underwriter some leverage.

Use this type of request for lenders who require a faxed request including the borrower's authorization.

John Povejsil said...

For whatever reason, lenders generally have no clue what recording infomation even is (until loss mitigation). I suspect you talk to a payoff department for years without getting an acknowledgement of the security instrument information. Fortunately, Minnesota has a Certificate of Release by Agent of a Title Company statute that allows us to release a mortgage if a certain set of conditions are met. And unlike Illinois (whose process I'm becoming familiar with), lender objection is immaterial.

Diane Cipa, The Closing Specialists® said...

Interesting. PLTA is lobbying now for revisions to the Mortgage Satisfaction Act in which mortgage lenders would be required to honor their payoff statements.