Insights into Approving Payoff Demands

Dear Valued Investor,

As always, we are looking to provide you with the most expedient service possible when managing your investments. To this purpose, here is some important information concerning payoff demands.


When a payoff demand is requested, we at White Hat Servicing will review the payoff demand in full to ensure that all interest, late payments, penalties, and any other fees due to each lender is accurately reflected in the payoff demand. It has occurred that a late fee, or unpaid interest gets missed on the payoff demand, so we watch for this closely to ensure that you are getting the full return on your investment. If the payoff demand comes from FCI with an error, and a lender approves the demand before we have had a chance to correct it, you may end up with multiple emails from FCI cc-ing you of the approval, then rejection, then new payoff, etc. When we approve a payoff demand we will let you know that we have reviewed it and that what we are seeing is accurate. You too may review the payoff demand, and we do encourage you to, given that it is your investment.

If your borrower is delinquent or defaulted on their investment and you are considering filing an NOD, approving a payoff demand prior to the filing of the NOD will prevent the NOD from being filed. The NOD cannot be filed until the payoff demand has expired. In these instances, we can get a payoff demand with a short window of 1-2 weeks, if the borrower is about to pay off the loan. Or we can get the NOD filed, and once filed issue a payoff demand to the borrower. So, when you are considering filing an NOD, we need to consider any request for a payoff demand and how this will impact being able to file for NOD. We will gather all information needed, including contacting Escrow if they are refinancing, their real estate agent if they are selling, etc. to get their closing timeline so that you can determine your best course of action.

When a loan has ballooned or is delinquent we work to gather escrow information from the borrower or refinancing lender so that we can connect directly with escrow to get their timeline for their close of escrow date, provided one has been established. This also helps us to provide you with more information to decide on authorizing a payoff demand request, or to move forward with the filing of an NOD prior to releasing a payoff demand.

We hope the above has provided additional insight on the nuances of the payoff demand procedure.

As always, we are here for you so don’t hesitate to reach out with any questions or concerns via email, text, phone call, or an in-office visit!

Best,

Your White Hat Servicing Team

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