How can I get my lender to issue a mortgage payoff statement before closing? – North Carolina

Short Answer

In North Carolina, a seller (or the seller’s authorized agent, including the closing attorney) can make a formal written payoff-statement request that must include specific information, including a payoff date no more than 30 days out. If the request meets the statutory requirements, the secured creditor generally must issue and send the payoff statement within 10 days after the request becomes effective. When the lender is not responding to calls, using a written, trackable request to the correct payoff address is often the fastest way to trigger that deadline.

Understanding the Problem

In a North Carolina home sale, a seller often needs the mortgage lender’s payoff statement before closing so the closing attorney can calculate the exact amount needed to pay off the loan and release the lien from the property. The question is what steps can be taken to require the lender to provide that payoff figure when the closing date is approaching and the lender is not responding through normal channels. The key decision point is whether the payoff request is being made in the specific written format North Carolina law recognizes, and whether the request is being sent in a way that makes it “effective” for deadline purposes.

Apply the Law

North Carolina law allows an “entitled person” (typically the borrower/property owner) or that person’s authorized agent to request a mortgage payoff statement by giving the secured creditor a compliant written notification. If the notification includes the required details—especially identification information and a payoff date within the allowed window—the secured creditor must issue the payoff statement and send it as directed within a set time period. North Carolina law also recognizes “short-pay statements” when the parties have negotiated a reduced payoff to obtain a release, and it sets content and timing rules for those statements as well.

Key Requirements

A compliant written request (notification): The request must be in writing and must include specific information, such as the entitled person’s name, where the statement should be sent, and enough details to identify the loan and the encumbered property.
A valid payoff date: A payoff-statement request must state a payoff date that is not more than 30 days after the notification is given.
Delivery directions and authorized-agent details: If an authorized agent (often the closing attorney) makes the request, the request must identify the agent and state the agent has authority, and it must clearly direct where the payoff statement should be sent.

What the Statutes Say

N.C. Gen. Stat. § 45-36.7 (Payoff and short-pay statements) – Explains how to request a payoff or short-pay statement, what must be included, and the timeline for the creditor to respond.
N.C. Gen. Stat. § 45-36.8 (Corrected payoff/short-pay statements) – Addresses corrected statements and the effect of an understated payoff amount.

Analysis

Apply the Rule to the Facts: The scenario involves a North Carolina sale with a mid-month closing and a lender that has not provided a payoff statement and is not returning calls. Under the statute, the most direct lever is a written payoff (or short-pay) request that includes the required identification details, specifies a payoff date within 30 days, and clearly directs where the statement must be sent, including to an authorized agent such as the closing attorney. If a reduced lien payoff has been negotiated, a short-pay statement may be the better fit because it can include the lender’s conditions for releasing the lien on receipt of the reduced amount.

Process & Timing

Who files: The seller/borrower (entitled person) or the seller’s authorized agent (often the closing attorney). Where: Delivered to the secured creditor (or servicer handling payoff requests) at the address the creditor designates for payoff requests; in practice, the closing attorney typically sends this to the lender’s payoff department. What: A written payoff-statement request that includes the required items (names, identification of the loan and property, the payoff date within 30 days, and the delivery address for the response). When: As soon as the closing date is known; the payoff date in the request must be within 30 days of giving the request.
Confirm “effective” delivery and follow up: Use a method that produces proof of delivery (for example, certified mail, overnight delivery, or another trackable method the creditor accepts). If mail-forwarding problems exist, direct the payoff statement to the closing attorney’s address and include a secondary delivery method request (such as email or fax) if the creditor will agree.
Use an updated-payoff procedure close to closing: If the lender provides a payoff that is qualified as subject to change, the statement should also provide a no-charge way to obtain an updated payoff amount on the payoff date or the preceding business day, which helps avoid last-minute surprises at disbursement.

Exceptions & Pitfalls

Incomplete request details: Missing the payoff date, omitting the delivery address, or failing to provide enough information to identify the loan and property can prevent the statutory response deadline from being triggered.
Wrong type of statement: When a reduced payoff has been negotiated to obtain a release, a payoff statement may not reflect the deal; requesting a short-pay statement can better capture release conditions and the reduced amount.
Relying on phone calls only: Phone logs rarely prove the request was made in the required form. A written, trackable request is usually more effective when a lender is unresponsive.
Holdback/“trust account” misunderstandings: Holding funds back at closing can create risk if the payoff is wrong or if the lender’s release conditions are unclear. Any holdback typically should be documented in writing in the settlement/closing instructions and coordinated through the closing attorney’s trust account practices and the settlement agreement.

Conclusion

In North Carolina, the most effective way to get a lender to issue a mortgage payoff statement before closing is to send a written payoff-statement request that includes all required identifying information and a payoff date no more than 30 days out. If the request complies with the statute and is delivered so it is effective, the lender generally must send the payoff statement within 10 days. The next step is to have the closing attorney send the compliant written request to the lender’s designated payoff address immediately.

Talk to a Real Estate Attorney

If closing is approaching and a lender is not issuing a payoff statement (or a negotiated short-pay statement), our firm has experienced attorneys who can help clarify the required request format, delivery method, and timeline under North Carolina law. Call us today at (919) 341-7055.

Disclaimer: This article provides general information about North Carolina law based on the single question stated above. It is not legal advice for your specific situation and does not create an attorney-client relationship. Laws, procedures, and local practice can change and may vary by county. If you have a deadline, act promptly and speak with a licensed North Carolina attorney.