Real Estate Agent · Melbourne, FL · Member since 2016 · 40 posts · 10 votes
First, I am anticipating this scenario, it hasn't actually happened yet. I purchased a house 18 months ago with seller financing and theres a 24 month balloon. I have a buyer for the property now. Based on emails with the seller I believe he will be reluctant to give the payoff figure to the title company. He wants principal and interest paid through the 24 months. There are no prepayment penalties or restrictions in the Note. What happens if he won't provide the payoff?
If your Seller/Lender indicates an unwillingness to provide the payoff information refer him/her to Florida Statute 701.04 which provides in part:
701.04 Cancellation of mortgages, liens, and judgments.—(1) Within 14 days after receipt of the written request of a mortgagor, a record title owner of the property, a fiduciary or trustee lawfully acting on behalf of a record title owner, or any other person lawfully authorized to act on behalf of a mortgagor or record title owner of the property, the holder of a mortgage shall deliver or cause the servicer of the mortgage to deliver to the person making the request at a place designated in the written request an estoppel letter setting forth the unpaid balance of the loan secured by the mortgage.(a) If the mortgagor, or any person lawfully authorized to act on behalf of the mortgagor, makes the request, the estoppel letter must include an itemization of the principal, interest, and any other charges properly due under or secured by the mortgage and interest on a per-day basis for the unpaid balance.(b) If a record title owner of the property, or any person lawfully authorized to act on behalf of a mortgagor or record title owner of the property, makes the request:1. The request must include a copy of the instrument showing title in the property or lawful authorization.2. The estoppel letter may include the itemization of information required under paragraph (a), but must at a minimum include the total unpaid balance due under or secured by the mortgage on a per-day basis.
Also suggest that they speak with a good real estate attorney for advice on possible results for failing to comply.
If your Seller/Lender indicates an unwillingness to provide the payoff information refer him/her to Florida Statute 701.04 which provides in part:
701.04 Cancellation of mortgages, liens, and judgments.—(1) Within 14 days after receipt of the written request of a mortgagor, a record title owner of the property, a fiduciary or trustee lawfully acting on behalf of a record title owner, or any other person lawfully authorized to act on behalf of a mortgagor or record title owner of the property, the holder of a mortgage shall deliver or cause the servicer of the mortgage to deliver to the person making the request at a place designated in the written request an estoppel letter setting forth the unpaid balance of the loan secured by the mortgage.(a) If the mortgagor, or any person lawfully authorized to act on behalf of the mortgagor, makes the request, the estoppel letter must include an itemization of the principal, interest, and any other charges properly due under or secured by the mortgage and interest on a per-day basis for the unpaid balance.(b) If a record title owner of the property, or any person lawfully authorized to act on behalf of a mortgagor or record title owner of the property, makes the request:1. The request must include a copy of the instrument showing title in the property or lawful authorization.2. The estoppel letter may include the itemization of information required under paragraph (a), but must at a minimum include the total unpaid balance due under or secured by the mortgage on a per-day basis.
Also suggest that they speak with a good real estate attorney for advice on possible results for failing to comply.
Thank you Peter, this is exactly what I was looking for. What do you think about sending the note holder an independent account's determination of the numbers along with or just after the payoff request?
Thanks Wayne! I was hoping that you would respond. I don't believe the title company will disburse funds based on the amortization schedule and a per diem. They actually need something from the note holder. Right?
@Tom Donnelly Correct, but you can figure out exactly what it should be. Sounds like your seller was counting on exactly / years of interest....oh well.