Can the title company obtain payoff statements directly from the lenders, or do I need to request them myself? – North Carolina

Short Answer

In North Carolina, a title company or closing attorney can usually obtain payoff or short-pay statements directly from mortgage lenders if the property owner signs a written authorization naming them as the owner’s agent. State law allows an “authorized agent” to request these statements, and lenders may rely on that authorization. Without that signed authorization, most lenders will not release payoff figures to the title company.

Understanding the Problem

The narrow question here is: under North Carolina real estate law, can a title company handle contacting mortgage lenders and obtaining payoff statements for one or more deeds of trust on a house, or must the property owner personally request the payoff information? This comes up most often when a closing is pending and the title search shows more than one mortgage, including an unexpected second deed of trust from a lender the owner does not recognize.

Apply the Law

North Carolina law allows payoff and short-pay statements to be requested either by the borrower (called the “entitled person”) or by an authorized agent, such as a title company or closing attorney. The agent must clearly identify itself and state that it is acting with the owner’s authority. The lender then has a set period to issue a compliant payoff statement and send it to the person or agent designated in the request.

Key Requirements

Authorized agent status: The title company or closing attorney must have clear written authority from the owner to request payoff or short-pay statements on the owner’s behalf.
Proper payoff request: The request to the lender must include the owner’s name, the agent’s name (if any), where to send the statement, enough detail to identify the loan and property, and whether a payoff or short-pay statement is requested and for what date.
Lender’s response deadline and content: Once a compliant request is received, the secured creditor must send a payoff or short-pay statement within the statutory time and include defined details like payoff amount, per diem interest, and payment instructions.

What the Statutes Say

N.C. Gen. Stat. § 45-36.7 (Payoff and short-pay statements) – Allows an entitled person or an authorized agent to request payoff/short-pay statements and requires creditors to issue them within a specified time with certain minimum content.

Analysis

Apply the Rule to the Facts: Here, a North Carolina title company has found two mortgages of record and is sending the owner an authorization form. Once the owner signs and returns that authorization, the title company may act as the owner’s authorized agent under § 45-36.7 and request payoff statements directly from whichever lenders currently hold those deeds of trust. Because the owner does not know the second lender’s identity, having the title company or closing attorney handle the requests is usually the most efficient and accurate approach.

Process & Timing

Who files: The title company or closing attorney, acting as the owner’s authorized agent. Where: The payoff or short-pay request is sent directly to each secured creditor (the current holders of the deeds of trust), often by mail, fax, secure portal, or email, consistent with the creditor’s instructions. What: A written payoff or short-pay request that satisfies North Carolina’s content requirements, along with the signed owner authorization. When: Typically once a closing is scheduled and the title search identifies all open mortgages; the statute gives the lender 10 days after an effective request to issue the statement.
The lender reviews the request, verifies the loan, and prepares a payoff or short-pay statement showing the payoff amount as of a specific date, daily interest, fees, and payment instructions. This is usually turned around in a few days but can take up to the full 10 days the statute allows.
The title company or closing attorney receives the payoff statements, uses them to prepare the closing documents and settlement statement, and then sends the payoff funds after closing following the lender’s instructions. After payment, the creditor should arrange for satisfaction of the security instrument to be recorded in the county Register of Deeds.

Exceptions & Pitfalls

Lenders may refuse to speak with a title company if the written authorization is incomplete, unsigned, or does not clearly name the title company or law firm as the owner’s agent.
If the wrong loan number or property description is provided, the payoff statement may be delayed or issued for the wrong account, which can jeopardize a scheduled closing date.
If the payoff request asks for a payoff date more than 30 days out, or omits the payoff date entirely, the request may not meet statutory requirements and may not trigger the lender’s 10-day response clock.
Owners sometimes assume old or “unknown” loans have been paid and do not request payoff statements at all; if a recorded deed of trust is not properly satisfied, it can block a sale or refinance until a valid payoff or satisfaction is obtained.

Conclusion

Under North Carolina law, a title company or closing attorney can obtain payoff or short-pay statements directly from mortgage lenders, but only when the property owner authorizes them in writing to act as an agent. A compliant written request from that agent must clearly identify the owner, the property, the loan, and the requested payoff or short-pay date, after which the lender generally has 10 days to respond. The most practical next step is to sign the authorization, have it reviewed by a North Carolina real estate attorney if desired, and allow the title company or closing attorney to request all needed payoff statements.

Talk to a Real Estate Attorney

If a North Carolina title search shows one or more unexpected mortgages and payoff statements are needed, our firm has experienced real estate attorneys who can help explain the process, review any authorization forms, and coordinate with the title company. 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 any specific situation and does not create an attorney-client relationship. Laws, procedures, and local practice can change and may vary by county. If there is a deadline, act promptly and speak with a licensed North Carolina attorney.