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Title industry urges protections for buyers after lenders sometimes demand extra funds; HF 704 laid over
Summary
The committee heard House File 704, which would require lenders to honor written mortgage payoff statements relied upon by purchasers and title companies; title industry witnesses described cases where purchasers wired funds only to be asked for additional amounts later, and the bill was laid over for further stakeholder work.
Representative Freiberg introduced House File 704 on Feb. 23, 2026, saying the bill establishes a clearer framework governing reliance on mortgage payoff statements and the correction of understated payoff amounts to protect real estate closings.
Adam Schad and Chad Novak of the Minnesota Land Title Association described situations where title companies wired funds based on a lender’s payoff statement, only to receive later demands for additional money and a refusal to record satisfactions unless the extra funds were paid. "If a lender provides a payoff statement and a consumer relies on it and makes that payoff, the lender can no longer use mortgage foreclosure," Novak said, summarizing the bill’s core concept. Title-industry witnesses and lenders emphasized the need for timely satisfactions and consistent recording practices.
The Minnesota Mortgage Association representative urged caution, saying servicing and payoff accuracy have improved but technical issues remain; lenders and bankers noted potential drafting problems. The committee adopted an A1 technical amendment and laid HF 704 over for further stakeholder work so authors and industry could reconcile technical and implementation details.
