On October 1, 2023, several changes to Florida law governing estoppel letters (also referred to as “payoff letters”) prepared by lenders and servicers became effective. §701.04, Fla. Statute, now includes the following notable changes:
- A lender or servicer’s deadline to respond to an estoppel letter request from a record title owner, or fiduciary or trustee acting on behalf of a record title owner, was reduced from 14 days to 10 days.
- Estoppel letters must itemize principal, interest and any other charges making up the unpaid balance.
- Estoppel letters may be corrected in certain circumstances, so long as the corrected estoppel letter is receive by 3:00 pm at least 1 business day before payment is issued in reliance on the original estoppel letter.
- A lender or servicer may not refuse to accept funds received that conform with the amount provided in a current, valid estoppel letter. In those circumstances, the lender or servicer must apply such funds to the balance of the loan.
- After payment, an instrument acknowledging release of a mortgage must be executed and sent for recording in the official records of the proper county within sixty (60) days after a loan is paid off. The recorded instrument must be sent to the mortgagor or record title owner. A lender or servicer that fails to complete this action may now be subject to a civil action, as well as an award of attorney fees and costs.
- The same sixty (60) requirement to provide an instrument acknowledging release of a judgment now applies to judgment creditors. A judgment creditor may be subject to a civil action, as well as an award of attorney fees and costs for failing to provide a timely satisfaction of judgment.
The attorneys at Winderweedle handle transactions on behalf of both borrowers and lenders, and are well acquainted with estoppel requirements. Should you have questions regarding Florida’s new estoppel requirements, please contact our firm.
Michael C. Caborn practices law in the areas of business litigation, bankruptcy, creditors rights and collections, foreclosure litigation, real property and receiverships. Mike holds both his law degree and undergraduate degree from the University of Florida. He currently serves as a board member and general counsel for the not-for-profit company Operation American Dream, Inc, which funds scholarships for children of U.S. Military, law enforcement and fire rescue personnel who have sacrificed their lives in the line of duty.
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