June 5, 2014
by Lee Perres & Nickolas Schad
Pierce & Associates, P.C. – USFN Member (Illinois)
Illinois law imposes a strict deadline on mortgagees when a mortgagor requests a loan payoff statement. The purpose of this requirement is to facilitate the quick resolution of foreclosure actions allowing both the mortgagee and mortgagor to benefit from a full payoff of the loan. While both parties can benefit from a payoff of the loan, if the strict provisions of Illinois law are not followed, the mortgagee can be sanctioned, including, but not limited to, monetary fines.
Within 10 business days of the receipt of a demand by the mortgagor or the mortgagor’s authorized agent, a mortgagee (or its agent) must prepare and deliver a payoff statement accurately reflecting the outstanding balance of the mortgagor’s loan, and which would satisfy the obligation as of the date the letter is prepared (the Payoff Statement). For the purpose of Illinois law, the Payoff Statement is deemed delivered when placed in the U.S. mail with postage prepaid addressed to the party whose name and address is in the payoff request. Additionally, delivery can also mean fax or electronic delivery if the payoff demand specifically requests delivery in such a way. The first Payoff Statement requested by the mortgagor must be created at no charge to the mortgagor; however, the cost for any additional Payoff Statements may be charged to the mortgagor.
The Payoff Statement must include:
i) information necessary to calculate the payoff amount on a per day basis for a period of 30 days or until the mortgage is scheduled for a judicial sale, whichever is less;
ii) estimated charges (specifically labeled “estimated charges”) reasonably believed to be incurred within 30 days from the date of the Payoff Statement; and
iii) the loan number, telephone number of the mortgagee and, if applicable, the department name, telephone number, and fax number of the department that would receive the payment.
In the event a mortgagee, or its agent, willfully fails to deliver an accurate Payoff Statement within 10 business days after the receipt of a written demand, the mortgagee (or its agent) is liable for actual damages for the failure to deliver the Payoff Statement. In the event there are no actual damages, the mortgagee (or its agent) is liable for damages in the amount of $500. Pursuant to this statute, “willfully” means without cause, excuse, or mitigating circumstances.
© Copyright 2014 USFN and Pierce & Associates, P.C. All rights reserved.