HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: CS/CS/HB 353 Mortgage Payoff Letters
SPONSOR(S): Civil Justice & Property Rights Subcommittee, Insurance & Banking Subcommittee, Fabricio
TIED BILLS: IDEN./SIM. BILLS: CS/SB 1016
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF
1) Insurance & Banking Subcommittee 16 Y, 0 N, As CS Hinshelwood Luczynski
2) Civil Justice & Property Rights Subcommittee 17 Y, 0 N, As CS Mathews Jones
3) Commerce Committee 22 Y, 0 N Hinshelwood Hamon
SUMMARY ANALYSIS
A mortgage payoff letter may be requested by a mortgagor who is selling the property that is collateral for the
mortgage loan, refinancing the mortgage loan, or paying off the mortgage loan. Florida law requires that a mortgage
lender or servicer deliver to the requestor, within 14 days after rece ipt of a written request, a mortgage payoff letter
with the unpaid balance of the loan. When a mortgage loan has been fully paid, the mortgage lender or servicer
must execute in writing an instrument acknowledging satisfaction of the mortgage and have the instrument
acknowledged and duly entered in the official records of the proper county. Within 60 days after receiving full
payment of the mortgage loan, the mortgage lender or servicer must send the borrower the recorded satisfaction.
A mortgage payoff letter may sometimes include language reserving the mortgage servicer’s or lender’s right to
change the amounts listed in the payoff letter and disclaiming the reliance of others on the payoff letter. In the event
that the mortgage lender or servicer determines after sending the mortgage payoff letter that the borrower owes
additional money, the mortgage lender or servicer may sometimes return the funds received from the closing which
were sent in reliance on the amount stated in the mortgage payoff letter. In turn, this may cause continued accrual of
interest and potential fees during the pendency of resolving the discrepancy in the amount owed. Further, as long as
the discrepancy or dispute remains unresolved, there may not be clear title to the property.
The bill:
Includes legislative findings that a mortgage payoff letter’s accuracy and timeliness are critical, and that the
addition of disclaimer language within such letters creates unnecessary delays within the real estate market.
Reduces from 14 days to 10 days the timeframe within which a lender or servicer must send a requested
mortgage payoff letter.
Standardizes the contents of the mortgage payoff letter as to all of the authorized requestors.
Except where the property is in foreclosure or the borrower is in bankruptcy, prohibits the lender or servicer,
from qualifying, reserving the right to change, or conditioning or disclaiming the reliance of others on the
information provided in a mortgage payoff letter; and provides that any attempt to do so is void and
unenforceable.
Allows the lender or mortgage servicer to send a corrected mortgage payoff letter supersed ing a prior payoff
letter so long as the corrected payoff letter is received by 3 p.m. at least one business day before payment is
made in reliance on the payoff letter.
Prohibits the lender or servicer from denying the accuracy of the mortgage payoff letter against any person
who relied on it.
Requires the lender or servicer to promptly apply a payment received in reliance on the payoff letter.
Specifies the process by which a mortgage payoff letter may be requested and sent.
Requires the lender or servicer, within 60 days after the mortgage loan has been paid pursuant to the
mortgage payoff letter, to execute, have duly entered in the official records of the proper county, and send to
the mortgagor or record title owner an instrument acknowledging satisfaction of the mortgage.
The bill has no fiscal impact on state and local governments and an indeterminate fiscal impact on th e private sector.
The bill provides an effective date of October 1, 2022, and states that it applies to all mortgages existing as of such
effective date or entered into afterwards, as well as to all loans secured by such mortgages .
This docum ent does not reflect the intent or official position of the bill sponsor or House of Representatives .
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DATE: 2/24/2022
FULL ANALYSIS
I. SUBSTANTIVE ANALYSIS
A. EFFECT OF PROPOSED CHANGES:
Background
Estoppel Letters
In general, an estoppel letter (or estoppel certificate) is a legal document provided by one party that
enables another party to rely on the document’s accuracy, and that prevents the first party from later
claiming different facts or terms regarding an agreement. 1 With respect to real estate, these types of
letters are typically used to confirm amounts of moneys owed that attach to a certain piece of property,
such as mortgage debt, condominium association fees, homeowners’ association fees, and outstanding
claims or deposits due to tenants. These types of letters are often sought prior to closing on a real
estate transaction as part of due diligence to confirm proper amounts due that can affect the settlement
of such transaction.
Mortgage Payoff Letters
In Florida, s. 701.04, F.S., provides the requirements for estoppel letters with respect to real estate
mortgages; such letters are also commonly known as “mortgage payoff letters.”2 A mortgage payoff
letter3 may be requested by a mortgagor4 who is selling the property that is collateral for the mortgage
loan, refinancing the mortgage loan, or paying off the mortgage loan. Florida law requires that a
mortgage lender or servicer deliver to the requestor, within 14 days after receipt of a written request, a
mortgage payoff letter setting forth the unpaid balance of the loan secured by the mortgage. 5 The
request may be made by 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.6
Florida law specifies the information that must be contained in the mortgage payoff letter, depending on
who requests the letter, as follows:7
If the mortgagor, or any person lawfully authorized to act on behalf of the mortgagor, makes the
request, the mortgage payoff 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.
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, the mortgage payoff letter
may include the itemization of the information required above, but must at a minimum include
the total unpaid balance due under or secured by the mortgage on a per-day basis.
When the amount of money due on any mortgage loan has been fully paid, the mortgage lender or
servicer must execute a written instrument acknowledging satisfaction of the mortgage and have the
instrument acknowledged, or proven, and duly entered in the official records of the proper county. 8
Within 60 days after receiving full payment of the mortgage loan, the person required to acknowledge
satisfaction of the mortgage must send or cause to be sent the recorded satisfaction to the person who
1 CREPedia, Estoppel Letter, https://www.crepedia.com/dictionary/definitions/estoppel-letter/ (last visited Feb. 14, 2022); Redfin, What
is an Estoppel Certificate, https://www.redfin.com/definition/estoppel-certificate (last visited Feb. 14, 2022).
2 S. 701.041, F.S., defines an estoppel letter in regards to mortgages as a statement of the amount of the unpaid balance of a loan
secured by a mortgage, including principal, interest, and any other charges properly due under or secured by the mortgage; and the
interest on a per-day basis for the unpaid balance.
3 Referred to as an “estoppel letter” in Florida statutes. See ss. 701.04 and 701.041, F.S.
4 Mortgagor means “[s]omeone who mortgages property; the mortgage -debtor, or borrower.” Black's Law Dictionary (11th ed. 2019).
5 S. 701.04(1), F.S.
6 Id.
7 Id.
8 S. 701.04(2), F.S.
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has made the full payment.9 In a civil action arising out of this requirement, the prevailing party is
entitled to attorney fees and costs.
Section 701.04(2), F.S., requires the full payment of the mortgage, not the amount specified in an
estoppel letter provided pursuant to 701.04(1), F.S. This is in contrast with homeowners’ association
estoppel certificates in Florida, where s. 720.30851(3), F.S., specifically states that a homeowners’
association “waives the right to collect any moneys owed in excess of the amounts specified in the
estoppel certificate from any person who in good faith relies upon the estoppel certificate and from the
person’s successors and assigns.” Sections 718.116(8)(c), and 719.108(6)(c), F.S., provide similar
language regarding estoppel certificates for any unpaid condominium association assessments and
unpaid rents, and assessments due to cooperatives (“co-ops”), respectively.10 A mortgagee is not
necessarily held to the same waiver of rights to collect additional moneys from a mortgagor upon the
provision of an estoppel letter, as s. 701.04, F.S., does not provide a similar waiver provision as those
applying to homeowners’ associations, condominium associations, and cooperatives. 11
Some mortgage servicers and lenders, when sending the estoppel letter required under s. 701.04(2),
F.S., include language which seeks to reserve that servicer’s or lender’s right to change the amounts
listed in the payoff letter or disclaiming the reliance of others on the information in the payoff letter.
Examples of such language include the following statements:
“The payoff figures provided are subject to final verification by the Note Holder. The noteholder
reserves the right to adjust these figures and refuse or accept any funds which are insufficient to
satisfy the full indebtedness for any reason.”
“The payoff amount is subject to our final verification once we receive payoff funds.… If the
payoff funds received are insufficient to pay off the account in full for any reason including, but
not limited to, error in calculation, NSF, or additional escrow disbursements and/or adjustments.
[We] reserve the right to decline to pay the account in full. In addition, any and all interest will be
due at the time of payoff.”
“All payoff figures are subject to final verification of the mortgage lender. We may adjust any
portion of this payoff statement, at any time, for the following reasons, including but not limited to:
escrow disbursements made on behalf of the loan holder(s), fee advances, items returned by
your financial institution including previously made payments, additional fees or charges, and any
good faith and/or inadvertent clerical errors.”
“We will not be bound by errors and/or omissions contained herein.”
“Agent hereby reserves the right to adjust Payoff Amount or the Per Diem Amount in the event
that we discover a mathematical, typographical, bookkeeping or clerical error.”
“Borrower forever releases and discharges Agent, the Lenders, and their respective officers,
directors, employees, agents, representatives, successors and assigns…from any and all claims,
causes of action, damages and liabilities of any nature whatsoever, known or unknown, which
such person ever had, now has or might hereafter have against [the parties] which relates,
directly or indirectly, to any of the Loan Documents or the Loan.”12
Such language can frustrate the parties involved in a real estate transaction since such language
essentially attempts to remove the mortgagee’s right to rely on the amounts provided therein. In the
event that the mortgage lender or servicer determines after sending an estoppel letter that the borrower
9 Id.
10 S. 701.116(8)(c) states that a condominium association “waives the right to collect any moneys owed in excess of the amounts
specified in the estoppel certificate from any person who in good faith relies upon the estoppel certificate and from the per son's
successors and assigns.” 719.108(6)(c), F.S. states that a cooperative association “waives the right to collect any moneys owed in
excess of the amounts specified in the estoppel certificate from any person who in good faith relies upon the estoppel certif icate and
from the person's successors and assigns.”
11 But see, Rissman on Behalf of Rissman Inv. Co. v. Kilb ourne, 643 So. 2d 1136, 1139 (Fla. 1st DCA 1994), where the 1 st District
Court of Appeal found that a lender could be estopped from claiming additional moneys after an estoppel letter. The facts of this case,
however, were rather unique. As the court mentioned, the mortgagee regularly reaffirmed the amount given in the estoppel lett er over a
number of years. In addition, the mortgagor made a number of transactions based in detrimental reliance on the amo unt provided by
the mortgagee.
12 See Email from Melissa Murphy, Executive Vice President, Chief Legal Officer & General Counsel, The Fund (Feb. 4, 2022, 11:46
EST) (on file with the Senate Banking and Insurance Committee), which provided samples of escrow letters that were sent to Florida
borrowers.
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owes additional money beyond that provided in the estoppel letter, some mortgage lenders or servicers
return all of the funds received from the closing and demand full payment, even if such funds were sent
in reliance on an estoppel letter that was never corrected or revised by the lender or servicer. This can
result in the continued accrual of interest on the full amount of the mortgage (not just the amount in
dispute) during the pendency of resolving the discrepancy in the amount owed. Further, as long as the
discrepancy or dispute continues, there may not be clear title to the property. 13
Effect of the Bill
The bill reduces from 14 days to 10 days the timeframe within which a mortgage lender or servicer must
send a requested mortgage payoff letter setting forth the unpaid balance of the mortgage loan. If the
request for a mortgage payoff letter is made by a person other than the mortgagor,14 the request must
include a copy of the instrument showing such person’s title in the property or other lawful
authorization, and the mortgage lender or servicer must notify the mortgagor of the request.
The bill standardizes the information that must be contained in the mortgage payoff letter, regardless of
whether the requestor is the mortgagor, a record title owner, or a person lawfully authorized to act on
behalf of the mortgagor or record title owner. The letter must at least include the unpaid balance of the
loan properly due under or secured by the mortgage as of the date specified in the letter, including an
itemization of the principal, interest, and any other charges comprising the unpaid balance.
The bill specifies the process for requesting a mortgage payoff letter. A written request for a mortgage
payoff letter must be sent to the mortgage lender or servicer by first-class mail, postage prepaid; by
common carrier delivery service; or by e-mail, facsimile, or other electronic means at the address made
available by the mortgage lender or servicer for such purpose, or through an automated system
provided by the mortgage lender or servicer for requesting a mortgage payoff letter. The request is
considered received:
Five business days after the request sent by first-class mail is deposited with the United States
Postal Service;
The day the request is delivered by a common carrier delivery service; or
The day the request is sent by e-mail, facsimile, or other electronic means or through an
automated system provided by the mortgage lender or servicer for requesting a mortgage
payoff letter.
If any of the foregoing days fall on a Saturday, Sunday, or legal holiday, the request for a mortgage
payoff letter is considered timely received by the mortgagee or mortgage servicer on the next business
day.
The bill also specifies the process by which a mortgage payoff letter must be sent. The mortgage
lender or servicer must send a mortgage payoff letter by first-class mail; by common carrier delivery
service; or by e-mail, facsimile, or other electronic means, as directed in the written request, or through
an automated system provided by the mortgage lender or servicer for this purpose. How