Chapter 403
2004 -- S 2753
SUBSTITUTE A
Enacted 07/05/04
A N A C T
RELATING
TO FINANCIAL INSTITUTIONS - - COMMUNITY OBLIGATIONS AND
BANKING
OFFENSES
Introduced
By: Senator Michael J. McCaffrey
Date
Introduced: February 11, 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, 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
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.
(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.
SECTION
2. This act shall take effect on November 1, 2004.
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LC02153/SUB
A/2
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