PA 08-58—HB 5578

Banks Committee


SUMMARY: This act extends the requirements for issuing mortgage payoff statements to reinstatement payment statements. It defines a “reinstatement payment statement” as one that provides the total amount owed and that a borrower must pay to cause the loan to be reinstated, provided any other contractual conditions for reinstatement are satisfied. Specifically, the act requires a lender, upon written request, to provide a written reinstatement payment statement to the borrower or borrower's authorized agent by the date noted in the request as long as that date is at least seven business days after the request is received. The act also shortens the deadline for payoff statements from 10 business days to seven. The borrower's attorney can make the request to the lender if it relates to a default, as long as the request represents that the person is an attorney authorized to do so by the borrower.

By law, the lender must provide a payoff statement by the request date or forfeit any interest on the mortgage loan that accrues between the request date and when the borrower receives it. The act extends this requirement to reinstatement statements. The borrower bears the burden of proof with respect to the receipt of the request by the lender and the lender bears it with respect to receipt of the statement by the borrower. As with payoff statements, the act prohibits the lender from imposing any fee or charge for the first reinstatement payment statement requested each year unless the person making the request agrees to pay a fee for expedited delivery of the payoff statement and the lender delivers it on time.

Finally, the act specifies that it does not create an obligation on the part of the lender to provide a reinstatement payment statement if no right to cure the default and reinstate the loan exists under the loan documents or the law.

EFFECTIVE DATE: October 1, 2008

OLR Tracking: SC: jr: jsl: ts/tjo