12/12/2025 Mortgage Lenders are now legally required to accept and apply all payoff payments

On December 12, 2025, Governor Hochul signed Assembly Bill A2739 into law in part due to the active advocacy and support of the NYSLTA and directly addresses the disruptive practices of mortgage servicers who return or destroy payoff checks due to minor discrepancies.

The law amends Sections 275 and 1921 of the Real Property Law. Mortgagees are now legally required to accept and apply payments made in reliance on a payoff statement, provided they are received at the specified location and manner.

The statute now reads:

“…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.”

Click here: NYS Assembly Bill A2739