(a)  Every lending institution or other entity that owns or services a loan, secured by a mortgage on property located in this state, shall:

(1)  Provide to the obligor, within three (3) business days after receipt of a written or telefaxed request, the exact payoff due the lender on the loan;

Notwithstanding the foregoing, if the payoff is requested for a loan that is forty-five (45) days or more delinquent in payment thereof or for any equity line of credit, the payoff shall be provided within five (5) business days of said request. Nothing contained herein shall prevent the institution from providing the exact payoff sooner than the deadline set forth herein;

Notwithstanding the foregoing, nonamortizing loans made by Rhode Island housing and mortgage finance corporation for the purpose of providing closing cost or down-payment assistance shall not be subject to the provisions of this section;

(2)  Permit the payoff to be made to it or, in the case of a mortgage owned or serviced by its subsidiary or affiliate or servicing agent, permit the payoff to be made at the subsidiary’s or affiliate’s principal place of business located in this state;

(3)  Accept as final interest due the lender on this payoff the interest calculated as of the business day full payment is made to the lending institution or servicing agent; and

(4)  Issue or provide to the mortgagor, or his or her agent or real estate closing officer, a discharge of the mortgage securing the loan within thirty (30) days after full payment of the payoff and final interest by separate instrument of release of the mortgage or as provided in §?34-26-3.

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Terms Used In Rhode Island General Laws 19-9-9

  • Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
  • Mortgage: The written agreement pledging property to a creditor as collateral for a loan.
  • Mortgage loan: A loan made by a lender to a borrower for the financing of real property. Source: OCC
  • Mortgagee: The person to whom property is mortgaged and who has loaned the money.
  • Mortgagor: The person who pledges property to a creditor as collateral for a loan and who receives the money.
  • real estate: may be construed to include lands, tenements, and hereditaments and rights thereto and interests therein. See Rhode Island General Laws 43-3-10
  • Settlement: Parties to a lawsuit resolve their difference without having a trial. Settlements often involve the payment of compensation by one party in satisfaction of the other party's claims.

(b)  “Payoff statement” means any statement produced by a lending institution or servicer of a mortgage setting forth the amount of the unpaid balance on said mortgage loan, including principal, interest, and other charges assessed pursuant to the loan documentation of such mortgage and a statement of the interest on a per-diem basis with respect to the unpaid principal balance of the mortgage loan.

(c)  Notwithstanding the provisions of any law or regulation to the contrary, if a settlement agent complies with all of the terms of a payoff statement from the lending institution or servicer then the settlement agent shall not be responsible for any shortfall in the amount due to the mortgagee to pay off the mortgage loan in full. The settlement agent shall not be liable for any interest on funds tendered to said lending institution or servicer beyond the date that said funds were received by said lending institution or servicer even if said funds were insufficient to pay off the full balance of the mortgage loan.

History of Section.
P.L. 1995, ch. 82, § 47; P.L. 2004, ch. 172, § 1; P.L. 2004, ch. 403, § 1.