After almost a month, Lender Will Not Provide Payoff Amount!!!

[John Anderson]

Hi biggerpockets,

Looking for some advice here.  I purchased this home subject-to this past summer.  The mortgage was pretty far behind, but even so it was a pretty decent deal at the time. Since it didn't make sense to catch up the mortgage, I didn't, and I sold the property for what should have been a decent profit.  The plan was to payoff the mortgage and back payments at closing, which with the sales price that would not have been an issue.  This is where it all started falling apart. 

I have authorization and POA regarding the mortgage so I can speak with the lender directly. The B-C closing was set for November 11 and I had a payoff request faxed in on October 31st by the title company closing the B-C transaction; the lender claims they never received it. I directly faxed in another payoff request on November 8th, which was confirmed by the lender that they did receive the request and that it could take up to 5 business days due to the back payments.

The B-C closing was supposed to happen on November 11th, which is when the buyers actually closed on their side, so I am getting heat from the buyers agent and broker at this point (I don't blame him).

After not receiving the payoff during the 5 business days, I called the lender again to ask what the status was, which they were unsure of, but they gave me the number to the law firm that would be reviewing the payoff request.  I contacted the law firm, and found out that a payoff request was never sent to them by the lender.  They asked for the loan information and said they would order a payoff from the lender to review. At this point, the law firm said it would take up 7 business days for me to receive the payoff (getting a little frustrated at this point).  

As of November 25, and after numerous calls during this entire time period (most going unanswered), I called the lender again today. It was like listening to a broken record, same run around story.  The lender keeps telling me that they are having their attorneys review the payoff amount, and it will take 5 business days for them to get back to me!  Throughout this time substantial late fees have been adding up  due to the back payments, and the buyers are unable to have the contractors they hired work on the property!

I have closed many deals, and this is a first.  I filed a complaint through the Consumer Financial Protection Bureau last week, but have yet to hear back from them. According to RESPA, financial institutions have to provide a payoff within 7 business days of written request, which has well passed.  I am not one to take legal action, but at this point and after constantly getting the run around the lender, more late fees, and the fact that they buyers can't even move in to the house, I am seriously contemplating it. It is costing everyone money and time at this point, and the buyers, even though they closed are threatening to walk away.

I would appreciate any feedback and advice from people that have dealt with this type of situation and the action they took.

Cliffs:

-Bought House Subject-to which was substantially behind on payments

-Sold property for a profit, with plans to payoff mortgage and back payments at closing on Nov. 11th.

-Requested payoff on Oct 31st. Lender Claims they did not receive it.

- Sent Payoff request November 8th, Lender confirmed they received it.  Would get payoff with 5 business days.  Buyers closed their side Nov. 11.

-No Payoff within 5 business days,  Lender tells me to contact the attorney reviewing the request

-Contacted Attorney, they never received a request from the lender, would take 7 business days to get payoff.

- 7 business days passed, nothing.  Filed a complaint with the CFPB.

-As of Nov. 25th, Contacted Lender, same story, 5 business days before I could get a payoff.

- Buyers closed on their side Nov 11, and still not payoff, late fees have added up, and buyer's contractors can't work on the property.

-Contemplating taking Legal Action.

[Chris Mason]

Have the actual borrower go to their online loan servicing portal, and click "click here for payoff letter." Should take 2 minutes.

You, of course, have absolutely no right to force the actual borrower to do this, and they don't have to help you if they do not feel like it. That's part of breaking the law, it means the law isn't there for you.