Sec 33-715. Payoff demands; definitions

A. On the written demand of an entitled person or that person's authorized agent, a secured lender shall prepare and deliver a payoff demand statement to the person who has requested it within fourteen days after receipt of the demand. Any written demand for a payoff demand statement prescribed in section 33-420.01 shall include a statement that the entitled person is acting as an agent of the borrower and that the line of credit is to be suspended.

B. The payoff demand statement shall provide the amounts required as of the date of preparation, include the information reasonably necessary to calculate the payoff amount on a per diem basis for a period of at least thirty days and include the following information:

1. The name and address of the person who or department that is to receive the payoff payment.

2. The name and address of the person who or department that is to receive the request to close the debt, line of credit or other obligation to pay.

3. The name and address of the person who or department that is to receive the request for release of lien.

C. The entitled person or that person's authorized agent may rely on a payoff demand statement for the purpose of establishing the amount necessary to pay the obligation in full and obtain a release of the mortgage or deed of trust that secures the obligation through and including the time set forth in the payoff demand statement. The entitled person must submit the payoff funds, instructions to close the revolving line of credit and request for release of lien to the secured lender as directed by the secured lender on the payoff demand statement prepared in conjunction with subsection B of this section.

D. The entitled person or that person's authorized agent may rely on an amended payoff demand statement if the secured lender delivers that amended payoff demand statement to the entitled person or that person's authorized agent before the earlier of:

1. The transfer of title to the mortgaged or trust property or any portion of the property.

2. The recordation of a mortgage or deed of trust describing the mortgaged or trust property or any portion of the property.

E. For notes created or renegotiated after August 22, 2002, any sums that were due the secured lender and that were not included in the payoff demand statement or in any amended statement constitute an unsecured obligation of the obligor pursuant to the terms of the note and are recoverable by the secured lender pursuant to the terms of the note and as otherwise provided by law.

F. A secured lender who willfully fails to prepare and deliver a payoff demand statement for fourteen or more days after receipt of a written demand is liable to the entitled person for all damages sustained for failure to deliver the statement. The secured lender is also liable to the entitled person for five hundred dollars whether or not actual damages are sustained. Each failure of the secured lender to prepare and deliver the payoff demand statement when required to do so pursuant to this section constitutes a separate cause of action. A judgment that awards an entitled person a forfeiture or damages, or both, for any failure to prepare and deliver a payoff demand statement bars recovery of any other damages or forfeiture for any other failure to prepare and deliver a statement with respect to the same obligation, if the other demand for the statement was made within six months before or after the demand was made that resulted in the award. For the purposes of this subsection, "willfully" means a failure to comply with this section without just cause or excuse.

G. If the secured lender has more than one branch, office or other place of business, the payoff statement demand shall be made to the branch or office address provided in the payment billing notice or payment book. Unless the payoff demand statement provides otherwise, the statement is deemed to apply only to the unpaid balance of the single obligation that is named in the demand and that is secured by the mortgage or deed of trust that is payable at the address that is provided in the payment billing notice or payment book.

H. The demand for and preparation and delivery of a payoff demand statement pursuant to this section does not change any date or time period that is prescribed in the note or that is otherwise provided by law.

I. The secured lender may assess a fee of no more than thirty dollars for furnishing each payoff demand statement. This is conclusively presumed to be reasonable.

J. For the purposes of this section, unless the context otherwise requires:

1. "Deliver" or "delivery" means depositing or causing to be deposited into the United States mail an envelope with postage prepaid that contains a copy of the documents to be delivered and that is addressed to the person whose name and address are provided in the payoff demand. Delivery includes transmitting those documents by telefacsimile machine to the person. Delivery includes transmitting those documents electronically pursuant to title 44, chapter 26 if the payoff demand specifically requests and authorizes that the documents be transmitted in electronic form.

2. "Entitled person" means the trustor or mortgagor of the mortgaged or trust property or any part of that property, any successor in interest to the trustor or mortgagor, any person with a lien or encumbrance of record on the mortgaged or trust property and an escrow agent that is licensed pursuant to title 6.

3. "Payoff demand" means a written demand for a payoff demand statement made by an entitled person or that person's authorized agent.

4. "Payoff demand statement" means a written statement that is prepared in response to a written demand made by an entitled person or that person's authorized agent that sets forth the amounts required by the secured lender to fully satisfy all of the obligations secured by the loan that is the subject of the demand.

5. "Secured lender" has the same meaning prescribed in section 33-420.01.