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One of the most important required
responsibilities of escrow is the payoff of any existing mortgage liens on the
property. Once escrow receives the mortgage information from the seller in a
resale or a borrower in a refinance, we order a payoff statement/demand from
the lender. In many cases, we can order these payoffs by phone and receive them
within 24 hours as we do with Countrywide. However, there are many lenders that
either require us to fax a request, refuse to give verbal information due to
the privacy acts or take days and sometimes weeks to provide a statement (by
law they have up to 21 calendar days). For example, World Savings takes 10 - 12
business days! If there is a prepayment penalty, it can take a longer time as
they have to pull their actual file to confirm and calculate the prepayment
fee. So if you have a short escrow, to ensure a timely closing, call escrow
immediately and provide the loan information to help expedite the process.
Remember, escrow cannot close without a payoff demand!
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