Chapter 172

2004 -- H 7799 SUBSTITUTE B

Enacted 06/25/04

A N A C T

RELATING TO FINANCIAL INSTITUTIONS - - COMMUNITY OBLIGATIONS AND

BANKING OFFENSES

Introduced By: Representatives Kennedy, Anguilla, Lally, Gallison, and Watson

Date Introduced: February 12, 2004

It is enacted by the General Assembly as follows:

SECTION 1. Section 19-9-9 of the General Laws in Chapter 19-9 entitled "Community

Obligations and Banking Offenses" is hereby amended to read as follows:

19-9-9. Mortgages issued -- Payoffs. – (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 ~~five (5)~~ 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, nonamoratizing 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

section 34-26-3.

(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.

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.

SECTION 2. This act shall take effect on November 1, 2004.

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LC00500/SUB B

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