Posted by Roadie_MD on 7/7/10 11:31am
Msg #343998

Loan Payoffs - is there a legal timeframe

in which this must occur? I always thought that it happened on the day your loan funds, or the day after the RTC expires. I closed my own refi on 6/24 and the loan should have funded on 6/29, but the payoff wasnt made until 7/6--a week later and $300+ dollars in interest out of my pocket.

Reply by Ilene C. Seidel on 7/7/10 11:35am
Msg #344000

Must have been a hitch with funding meaning the mtg company didn't send the funds to the title company on a timely basis or the title company didn't comply with mtg requirements. This happens sometimes.

Reply by Roadie_MD on 7/7/10 11:43am
Msg #344003

So I'm guessing there is nothing I can do about it.....? n/m

Reply by meganPA on 7/7/10 12:25pm
Msg #344008

Call the title co that did your closing and asked whether they overnighted or wired the payoff and confirm which day it went out. Then you will know exactly which day the lender received the payoff funds. The holdup may be on the lender end. When I worked as a settlement agent, we always padded all payoffs for an extra 7 days past the funding date b/c even though we disbursed the funds immedietly, once the lender receives the money they may take several days to process it. (If the payoff is received via check, it has to get taken to their bank, takes a few days to clear, etc.)

Reply by BobbiCT on 7/7/10 12:01pm
Msg #344006

Loan Payoffs - timeframe

My guess (based on closing experience):

6/29 RTC has expired.
6/29 ASSUME out-of-state or area escrow agent/title company FedExs mortgage deed to abstractor to bring down title and record (rather than call for same-day pick up and recording)
7/1 Abstractor receives mortgage deed, brings down title and records (let's say end-of-day) or even 7/2 if company hasn't paid for a "rush" or instead of FedEx uses snail mail
7/2 Abstractor verifies title is clear since last review and that new mortgage is recorded; escrow agent issues payoff check and snail mails mortgage payoff rather than pay FedEx charge or wire transfer fee
7/3-5 weekend and holiday
7/6 still in the mail (maybe it didn't go out to the mailbox on 7/2 until after 5 pm or Postal System was busy)
7/7 old lender books receipt of payment

Note to others: When paying off a mortgage, always check yourself to see whether you can save some $$$ in interest by requiring that the settlement/escrow company wire the payoff amount to your old lender (i.e., a $20 wire fee may save $100+ in interest until a snail-mailed payment is received).

Reply by twil4_WI on 7/7/10 7:49pm
Msg #344061

Re: Loan Payoffs - same thing happened

we received notice from our prior lender that funds had not been received in a timely fashion, 14 days, and the interest bill was almost $500. We immediately called the title company, a large professional outfit, and they paid it immediately, with many apologies. When they figured the pad time, they are aware of the holidays and weekends, and have more than likely worked with that lender many times, they know how far out to charge and should plan accordingly. There is no excuse for not funding on time.

Reply by taxpro on 7/7/10 10:35pm
Msg #344089

Re: Loan Payoffs - same thing happened

And if they don't fund on time, you should get a refund of the prepaid interest. After all, if they didn't send the funds to pay off your old loan by a certain date, why should they be able to collect interest from that date?