Governor Signs A2739 Protecting Consumers from Predatory Payoff Practices
We wanted to take this opportunity to alert you to recent legislation (Assembly Bill A2739) signed by Governor Hochul on December 12, 2025, which is designed to directly address the disruptive practices of mortgage servicers who return or destroy payoff checks due to minor discrepancies. As you know, our own Mark D’Addona currently serves as the President of the New York State Land Title Association (NYSLTA) and on his watch, NYSLTA has actively lobbied the legislature to get this important Bill passed into law.
The new law amends Sections 275 and 1921 of the Real Property Law and now mandates that Mortgagees accept and apply payments made in reliance on a payoff statement, provided the funds are received at the specified location and manner. In relevant part, the new law reads as follows:
“...if payment is received at the location and in the manner specified by the mortgagee, the mortgagee must accept and may not return or destroy any payment received in reliance on a payoff statement and must promptly apply such payment to the unpaid principal, interest or any other amounts due under the mortgage.” (emphasis added).
The importance to the real estate community at large cannot be underscored. For years, Title Agents, Underwriters, Attorney, Sellers and Purchasers have dealt with the fallout of "all-or-nothing" policies of certain servicers, as they relate to the processing of mortgage payoff checks or wires that may not have exactly matched the payoff amount for any number of reasons. Previously, a payoff short by as little as $50.00 could result in a certified check which was returned or even destroyed, without notification to the payment sender, leading to thousands of dollars in additional interest, mounting fees, and delayed discharges.
This law provides a critical safeguard for:
- Borrowers: Protecting them from unnecessary interest accrual.
- Title Agents & Companies: Reducing post-closing administrative burdens and "short-payoff" complications.
- Attorneys: Ensuring greater certainty in the closing process.
Click the link below to view the complete Assembly Bill A2739-
https://www.nysenate.gov/legislation/bills/2025/A2739
On behalf of the Team at Home Abstract Corp., we thank the NYSLTA for its efforts in advancing this legislation and for its continued commitment to supporting and protecting the real estate industry throughout New York State.
As always, the Home team is here for any questions you may have.
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