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

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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

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 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.


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