If your lender gave you an incorrect payoff amount and you paid it, do they still have to give you a release?

UPDATED: May 5, 2011

Advertiser Disclosure

It’s all about you. We want to help you make the right legal decisions.

We strive to help you make confident insurance and legal decisions. Finding trusted and reliable insurance quotes and legal advice should be easy. This doesn’t influence our content. Our opinions are our own.

UPDATED: May 5, 2011Fact Checked

Get Legal Help Today

Compare Quotes From Top Companies and Save

secured lock Secured with SHA-256 Encryption

If your lender gave you an incorrect payoff amount and you paid it, do they still have to give you a release?

My former mortgage holder supplied a payoff letter with an improper amount to our new lender and closing company. The closing occurred 2 1/2 months ago. A check was sent from closing to, and cashed by my former lender. The amount was as they had requested in their payoff letter. My question is what is my rights at this point? If there is a dispute, should they release my old mortgage as satisfied and either lien for the disputed amount or take legal action. Basically, what are my rights?

Asked on May 5, 2011 under Real Estate Law, Florida


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

There is no simple answer to this, and you should consult with an attorney who can evaluate all the circumstances and the exact language of the letter.

Essentially, if the lender cannot show some sort of obvious error--particularly an error which should have been obvious to you (or rather, to any reasonable debtor reading it)--they are bound by the payoff amount. They may not "rethink" the amount, or hope for more.

On the other hand, if there was a clear error--the wrong account number referenced, the wrong names or addresses, a decimal in the wrong place, an amount which can be shown to not "track" at all with any prior offers, correspondence, etc. on the subject, then they may be able to disregard it and submit a correct payoff number to you. The law does not hold people or businesses accountable, as a general matter, to clear mistakes.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although AttorneyPages.com has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

Get Legal Help Today

Find the right lawyer for your legal issue.

secured lock Secured with SHA-256 Encryption