Florida legislature recently passed SB 708

10/16/2023

The Florida legislature recently passed SB 708, which makes some important changes to the requirements for mortgage estoppel letters.  The law went  into effect on October 1, 2023 and will apply to all mortgages existing or entered into on or after October 1.

The changes will mostly effect mortgagees and servicers who are required to send out estoppel letters.  Estoppel letters are typically requested by title companies as they prepare real estate closings because the letter will verify the final amount due on the Seller’s mortgage at the time of closing.  The legislature made the changes after finding that the timeliness and accuracy of estoppel letters is critical to the real estate market in Florida.  The legislature found that the increasing use of conditional language in these letters and the rejection of payments made in reliance on estoppel letters has resulted in unnecessary delays and needless costs and burdens on buyers and sellers.

Some of the noteworthy changes are:

  • The time period for a mortgage company or servicer to send an estoppel was reduced to 10 days (previously was 14 days) after a written request is received;
  • If someone other than the mortgagor requests the estoppel letter, the requesting party must include a copy of the instrument showing such person’s title in the property or other authorization to make the request;
  • The estoppel letter must include:
    • The total unpaid balance of the loan as of the date specified in the letter;
    • An itemization of the principal, interest, any other charges comprising that balance;
    • The amount of interest accruing on a per-day basis from and after the date specified in the letter.
  • The estoppel letter cannot qualify, reserve the right to change, condition, or disclaim reliance on the information contained in the letter, unless the property is subject to a foreclosure action or suggestion of bankruptcy;
  • The mortgage company or servicer may only amend an estoppel letter if the amended letter is received at least one (1) business day before a payment is issued in reliance on the previous letter;
  • The mortgage company or servicer must promptly apply a payment received pursuant to an estoppel letter;
  • Upon receiving payment pursuant to an estoppel letter, the mortgage company or servicer must execute and record a release of mortgage and satisfaction of mortgage within 60 days.  They must also send a copy of these documents to the mortgagor.

While these changes do not create any additional work for you or your client, they are important to be aware of.  Listing agents can be confident that their Sellers will have accurate information about their mortgage payoffs and proceeds at the time of closing.  If you have any questions or are concerned about an estoppel letter you or your client received, you can contact me at any time. I can be reached at 239-784-5556 via phone or text or you can email me [email protected].

Law Office of Sam Saad