This docum ent does not reflect the intent or official position of the bill sponsor or House of Representatives.
STORAGE NAME: h0743a.IBS
DATE: 3/21/2023
HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: HB 743 Estoppel Letters
SPONSOR(S):Fabricio
TIED BILLS: IDEN./SIM. BILLS: SB 708
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF
1) Insurance & Banking Subcommittee 18 Y, 0 N Fletcher Lloyd
2) Civil Justice Subcommittee
3) Commerce Committee
SUMMARY ANALYSIS
A mortgagor selling collateralized property, refinancing a mortgage, or paying off a mortgage may
request an estoppel letter from the mortgagee or mortgage servicer (lender). Florida law currently
defines an “estoppel letter” as a statement of the amount of the unpaid balance of a loan secured by
a mortgage, including principal, interest, and any other charges due under or secured by the
mortgage, and the interest on a per-day basis for the unpaid balance.
In some estoppel letters, lenders expressly reserve the right to change the amounts listed and
disclaim the reliance of others on the letter. Further, if after sending an estoppel letter the lender
determines the mortgagor owes additional funds than those stated in the letter, some lenders return
payments made in reliance on the letter. Until the discrepancy in amounts owed is resolved, interest
and potential fees continue to accrue and title to the property remains unclear.
Among other things, the bill:
Reduces from 14 days to 10 days the timeframe within which a lender must send a requested
estoppel letter;
Prohibits a lender from qualifying, reserving the right to change, or conditioning or disclaiming
the reliance of others on information provided in an estoppel letter;
Allows a lender to send a corrected estoppel letter to supersede prior estoppel letters if the
corrected letter is received by 3 p.m. at least one business day before any payment is made in
reliance on a previous estoppel letter;
Prohibits a lender from denying the accuracy of an estoppel letter against anyone who relied
on it, but permits recovery of the sum owed from the mortgagor;
Requires a lender to accept payment received in reliance on an estoppel letter and promptly
apply such payment to the unpaid balance of the loan;
Requires a lender to execute and record an instrument confirming release of the mortgage in
the official records of the proper county, and send the recorded instrument to the mortgagor,
within 60 days of receiving full payment of the loan secured by the mortgage; and
Revises the definition of “estoppel letter.”
The bill has no fiscal impact on state or local governments and has an indeterminate fiscal impact on
the private sector.
The bill provides an effective date of October 1, 2023. STORAGE NAME: h0743a.IBS PAGE: 2
DATE: 3/21/2023
FULL ANALYSIS
I. SUBSTANTIVE ANALYSIS
A. EFFECT OF PROPOSED CHANGES:
Current Situation
Florida law currently defines an “estoppel letter” as a statement of the amount of the unpaid
balance of a loan secured by a mortgage, including principal, interest, and any other charges due
under or secured by the mortgage, and the interest on a per-day basis for the unpaid balance.
1
An
estoppel letter is often requested when selling property that is collateral for a mortgage,
refinancing a mortgage, or paying off a mortgage. The request may be made by the mortgagor,
2
the record title owner of the property, a fiduciary or trustee lawfully acting on behalf of the record
title owner, or any other person lawfully authorized to act on behalf of the mortgagor or record title
owner.
3
Depending on who requests the estoppel letter, the following information must be included:
If the requesting party is the mortgagor or someone lawfully authorized to act on behalf of
the mortgagor, the estoppel letter must include an itemization of the principal, interest, and
any other charges properly due under or secured by the mortgage and interest on a per-
day basis for the unpaid balance.
4
If the requesting party is the record title owner of the property or someone lawfully
authorized to act on behalf of the record title owner, the estoppel letter may include the
itemization of the information required above, but at a minimum must include the total
unpaid balance due under or secured by the mortgage on a per-day basis.
5
Where the amount of money owed on a mortgage loan has been fully paid, the mortgagee or
mortgage servicer (lender) must execute in writing an instrument confirming release of the
mortgage, have the instrument acknowledged, and record the executed, acknowledged instrument
in the official records of the property county.
6
Within 60 days of receiving full payment of the
mortgage loan, the lender must send the recorded release to the person who made the full
payment.
7
In the case of a civil action arising out of this requirement, the prevailing party is entitled
to attorney fees and costs.
8
Some estoppel letters include language reserving the lender’s right to change the amounts listed
in the estoppel letter and disclaiming the reliance of others on the information included in the
estoppel letter. If the lender determines after sending the estoppel letter that the mortgagor owes
additional money, some lenders return the funds received from the closing which were sent in
reliance on the amount stated in the estoppel letter. This results in the continued accrual of
interest and potential fees during the time period it takes to resolve the discrepancy in amount
owed. Further, prior to resolution of the discrepancy, there is not clear title to the property.
Effect of the Bill
1
S. 701.041(1)(a), F.S.
2
Mortgagor means “[s]omeone who mortgages property; the mortgage-debtor or borrower.” Black’s Law Dictionary (11th
ed. 2019).
3
S. 701.04(1), F.S.
4
S. 704.04(1)(a), F.S.
5
S. 704.04(1)(b), F.S.
6
S. 704.04(2), F.S.
7
Id.
8
Id. STORAGE NAME: h0743a.IBS PAGE: 3
DATE: 3/21/2023
The bill reduces from 14 days to 10 days the timeframe within which a lender must send a
requested estoppel letter setting forth the unpaid balance of the mortgage loan. If the request for
an estoppel letter is made by a person other than the mortgagor, the request must include a copy
of the instrument showing such person’s title in the property or other lawful authorization, and the
lender must notify the mortgagor of the request.
The bill standardizes the information that must be contained in the estoppel letter, regardless of
whether the requestor is the mortgagor, a record title owner, or a person lawfully authorized to act
on behalf of the mortgagor or record title owner. The letter must at a minimum include:
The unpaid balance of the loan secured by the mortgage as of the date specified in the
letter, including an itemization of the principal, interest, and any other charges comprising
the unpaid balance; and
Interest accruing on a per-day basis for the unpaid balance, if applicable.
The bill prohibits the lender from qualifying, reserving the right to change, or conditioning or
disclaiming the reliance of others on the information provided in an estoppel letter, and any
attempt to do so is void and unenforceable. However, this prohibition does not apply to mortgages
for which a notice of lis pendens in a foreclosure action or a suggestion of bankruptcy has been
properly filed and recorded.
If the lender determines that any of the information in the estoppel letter was inaccurate, the
lender may send a corrected estoppel letter. The corrected estoppel letter will supersede any prior
estoppel letter so long as the corrected estoppel is received by 3 p.m. at least one business day
before payment is made in reliance on the estoppel letter.
If any of the information in the estoppel letter was inaccurate and there was not a timely corrected
estoppel letter, the bill prohibits the lender from denying the accuracy of the estoppel letter as
against any person who relied on it. However, this does not affect the lender’s right to recover any
sum not included in the estoppel letter, nor does it limit any claim or defense to recovery that the
borrower may have.
If a payment is received at the location and in the manner specified by the lender, the lender must
accept and may not return any payment received in reliance on the estoppel letter, and the lender
must promptly apply such payment to the unpaid balance of the mortgage loan. This will prevent
accrual of interest and potential fees while the lender and the borrower work through any
discrepancy as to the amount owed.
The bill specifies the process for requesting an estoppel letter. A written request for a mortgage
payoff letter must be sent to the lender by first-class mail, postage prepaid; by common carrier
delivery service; or by e-mail, facsimile, or other electronic means at the address made available
by the mortgage lender or servicer for such purpose, or through an automated system provided by
the lender for requesting an estoppel letter. The request is considered received:
Five days after the request sent by first-class mail is deposited with the United States
Postal Service;
The day the request is delivered by a common carrier delivery service; or
The day the request is sent by e-mail, facsimile, or other electronic means or through an
automated system provided by the lender for requesting an estoppel letter.
If any of the foregoing days fall on a Saturday, Sunday, or holiday, the request for an estoppel
letter is considered timely received by the lender on the next business day.
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DATE: 3/21/2023
The bill also specifies the process by which an estoppel letter may be sent. The lender or servicer
must send an estoppel letter by first-class mail; by common carrier delivery service; or by e-mail,
facsimile, or other electronic means, as directed in the written request, or through an automated
system provided by the lender for this purpose. However, the lender is not required to pay for a
common carrier delivery service. If the 10-day period after a written request is received by the
lender ends on a Saturday, Sunday, or holiday, the estoppel letter is considered timely if it is sent
by the close of business on the next business day.
The bill requires the lender, within 60 days after the mortgage loan has been fully paid or paid
pursuant to the estoppel letter, to execute, have duly entered in the official records of the proper
county, and send to the mortgagor or record title owner an instrument acknowledging release of
the mortgage (i.e., a satisfaction of mortgage or a release of mortgage). The prevailing party in a
civil action brought against the mortgage lender or servicer to enforce this requirement is entitled
to reasonable attorney fees and costs. The recorded release of the mortgage does not relieve the
mortgagor, or the mortgagor’s successors or assigns, from any personal liability on the mortgage
loan. In the event of a discrepancy in the amount owed on the mortgage loan, this provision will
ensure clear title to the property while maintaining the mortgage lender’s or servicer’s ability to
recover sums properly owed under the mortgage loan.
The bill conforms the definition of “estoppel letter” in s. 701.041, F.S., to the estoppel letter
requirements in s. 701.04, F.S.
The bill provides an effective date of October 1, 2023.
B. SECTION DIRECTORY:
Section 1. Amends s. 701.04, F.S., relating to cancellation of mortgages, liens, and
judgments.
Section 2. Amends s. 701.041, F.S., relating to title insurer; mortgage release certificate.
Section 3. Provides legislative findings.
Section 4. Provides the bill applies to all mortgages, and all loans secured by such
mortgages, existing as of, or entered into on or after, October 1, 2023.
Section 5. Provides an effective date of October 1, 2023.
II. FISCAL ANALYSIS & ECONOMIC IMPACT STATEMENT
A. FISCAL IMPACT ON STATE GOVERNMENT:
1. Revenues:
None.
2. Expenditures:
None.
B. FISCAL IMPACT ON LOCAL GOVERNMENTS:
STORAGE NAME: h0743a.IBS PAGE: 5
DATE: 3/21/2023
1. Revenues:
None.
2. Expenditures:
None.
C. DIRECT ECONOMIC IMPACT ON PRIVATE SECTOR:
The bill has an indeterminate impact on the private sector. The bill may lead to smoother real
estate closings to the extent that lenders provide more accurate information in estoppel letters.
In the event of a discrepancy in the amount owed on the mortgage loan, the bill will prevent
accrual of interest and potential fees while the lender and the borrower work through the issue.
Additionally, the bill will ensure clear title to the property while maintaining the lender’s ability to
recover sums properly owed under the mortgage loan.
D. FISCAL COMMENTS:
None.
III. COMMENTS
A. CONSTITUTIONAL ISSUES:
1. Applicability of Municipality/County Mandates Provision:
Not applicable. This bill does not appear to affect county or municipal governments.
2. Other:
None.
B. RULE-MAKING AUTHORITY:
None.
C. DRAFTING ISSUES OR OTHER COMMENTS:
None.
IV. AMENDMENTS/COMMITTEE SUBSTITUTE CHANGES