A refinance is set to close 18 April. The payoff statement obtained on 1 April shows $214,880 good through 10 April. What should the closing team do with a payoff quote that expires before the planned payoff date?
Correct Answer
C) Obtain a payoff figure valid for the intended payoff date, including accrued interest
C. Obtain a payoff figure covering the intended payoff date. The $214,880 figure covers only the stated good-through period ending April 10. Interest and other applicable unpaid charges affect the amount required to satisfy the debt on a later date. Scope and exceptions: Signing, disbursement and receipt of payoff funds need not occur on the same day. Follow verified servicer instructions; if an existing quote supplies authorized per-diem adjustments, confirm their valid period rather than inventing a daily amount. No rate is supplied here to calculate the difference. Source: Payoff amount and specified-date statement — https://www.consumerfinance.gov/ask-cfpb/what-is-a-payoff-amount-and-is-it-the-same-as-my-current-balance-en-205/
Why This Is the Correct Answer
C. Obtain a payoff figure covering the intended payoff date. The $214,880 figure covers only the stated good-through period ending April 10. Interest and other applicable unpaid charges affect the amount required to satisfy the debt on a later date. Scope and exceptions: Signing, disbursement and receipt of payoff funds need not occur on the same day. Follow verified servicer instructions; if an existing quote supplies authorized per-diem adjustments, confirm their valid period rather than inventing a daily amount. No rate is supplied here to calculate the difference.
Why the Other Options Are Wrong
Option A: Use $214,880 and let the servicer bill the borrower for the difference
It knowingly risks sending less than the amount required to satisfy the debt.
Option B: Use the earlier April 10 date regardless of when payoff funds will actually be received
An earlier quote date cannot substitute for the actual payoff timing.
Option D: Use the $214,880, since a payoff statement is binding once it is issued
Issuance does not make the quoted amount valid indefinitely.
Exam Tip
Match the payoff amount to payoff timing, not merely the closing appointment.
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