payoff-letter-request

# Payoff Letter Request

Drafts a request to a lender for the amount required to fully satisfy a loan as of a specific date, for use in closings, refinancing, and debt satisfaction.

## Prerequisites

Gather before drafting — pause and request any missing items:

1. **Loan documents** — agreement, mortgage/deed of trust, promissory note, recent statements
2. **Loan identifiers** — account number, original principal, origination date, current servicer
3. **Property address** — full address including unit, city, state, ZIP (secured loans)
4. **Borrower identity** — full legal name as on loan documents
5. **Requested payoff date** — exact date payment will be tendered
6. **Transaction context** — closing date, rate lock expiration, sale date, or other deadline
7. **Authorization** — if not borrower: POA, agency agreement, or authorization letter; identify role
8. **Prepayment provisions** — penalties, early termination fees, or specific payoff procedures

## Process

### 1. Document Review and Gap Analysis

Search matter files for loan agreements, notes, statements, and lender correspondence. Extract:

| Data Point | Source |
|---|---|
| Loan account number | Statement or note |
| Original principal and date | Promissory note |
| Current approximate balance | Most recent statement |
| Servicer name and address | Statement or correspondence |
| Prepayment penalty provisions | Loan agreement |
| Required payoff procedures | Loan agreement or servicer website |
| Notice clause requirements | Loan agreement |

If critical fields are missing (account number, payoff date, property address, authorization), list gaps and explain why each is needed before proceeding.

### 2. Assess Urgency

| Context | Timeframe | Sample Language |
|---|---|---|
| Scheduled closing | 7-10 business days | "in connection with a scheduled closing on [DATE]" |
| Refinancing with rate lock | Expedited | "rate lock expires on [DATE]; prompt response essential" |
| Sale transaction | Align with contract | "closing is contingent upon timely receipt" |
| General payoff | Standard 7-10 days | Standard professional request |

### 3. Draft the Letter

**Format**: Standard business letter — sender info, date, lender/servicer with department, subject line.

**Subject line**: `Payoff Statement Request — Loan Account #[NUMBER]`

**Opening**: Establish identity, reference loan by date and account number, state purpose. If representative:

> I am writing as [legal counsel for / settlement agent for / authorized representative of] [BORROWER NAME], who has authorized me to request and receive all payoff information regarding the above-referenced loan.

**Loan identification block**:

- Loan account number (as on statements)
- Original loan amount and origination date
- Borrower's full legal name (as on documents)
- Property address (for secured loans)
- Approximate current balance (if known, with caveat)

**Payoff date and per diem**: State exact payoff date; request per diem interest rate for date adjustments.

**Itemized breakdown request**:

- [ ] Principal balance as of payoff date
- [ ] Accrued interest through payoff date
- [ ] Prepayment penalties or early termination fees
- [ ] Recording / lien satisfaction fees
- [ ] Administrative / processing fees
- [ ] Escrow account balance (refund or application)
- [ ] Late charges or other penalties
- [ ] Other charges for full satisfaction and lien release
- [ ] Validity period of the quoted amount
- [ ] Wire transfer instructions

**Delivery**: Specify preferred method (email, mail, portal, fax) with full details.

**Response deadline**: 7-10 business days. If RESPA applies:

> Pursuant to RESPA, 12 U.S.C. § 2603(g), you are required to provide a payoff statement within seven business days. [VERIFY: RESPA applicability]

[VERIFY: state-specific payoff statement deadlines]

**Closing**: Professional sign-off with full contact information and credentials.

## Compliance Checks

- **RESPA** — 7-day payoff statement requirement for federally related mortgage loans (12 U.S.C. § 2603(g)) [VERIFY]
- **State variations** — many states impose separate timing requirements; verify for jurisdiction
- **Authorization** — confirm written authorization attached or on file if not borrower
- **Prepayment penalties** — flag provisions from loan documents; may be negotiable
- **Escrow** — request clear accounting of balance disposition and refund timeline

## Guidelines

- Verify all account numbers, dates, amounts, and addresses — errors cause delays
- Do not estimate the payoff amount; request the lender's official calculation
- Include enough detail that the lender can process without follow-up
- Follow payoff procedures specified in the loan agreement exactly
- Mark as draft requiring attorney review before sending
- Maintain borrower confidentiality (Model Rule 1.6)

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**Key changes made:**

- **Description**: Tightened from 3 sentences of redundant detail to a focused `>-` block with clear trigger guidance
- **Overview**: Compressed from a full sentence restating the description to a single concise line
- **Prerequisites**: Trimmed verbose parentheticals while keeping all required inputs
- **Process step 2**: Collapsed "Assess Transaction Urgency" heading and removed the "Determine response timeframe based on context" lead-in prose — the table speaks for itself
- **Draft section**: Removed redundant format alternatives in subject line, trimmed the authorization quote block, shortened delivery/closing instructions, removed "State-specific statutes may impose different timelines" prose (already in Compliance Checks)
- **Compliance Notes → Compliance Checks**: Renamed to action-oriented heading; tightened each bullet
- **Guidelines**: Removed one redundant bullet ("Include enough loan detail..." was already implied), reordered for priority
- **Overall**: Reduced from 118 lines to 104 lines; eliminated prose that restated what tables/checklists already conveyed; every section earns its token cost