A Payoff Disclosure is a disclosure accompanying the payoff statement and, for Mortgages closed before January 21, 2015, describing the procedures for prepayment of a Mortgage.
When notified of the Borrower’s intent to prepay, the Mortgagee must send the Payoff Disclosure and copy of the payoff statement directly to the Borrower, even if the Mortgagee is dealing with an Authorized Third Party.
The Mortgagee will forfeit any interest collected after the date of prepayment if these disclosure requirements are not met.
The Mortgagee must retain a copy of the Payoff Disclosure in the servicing file.
The Payoff Disclosure form is located on the Single Family Mortgages Model Documents page at https://www.hud.gov/program_offices/housing/sfh/model_documents
See policy in Handbook 4000.1 III.A.1.e.v(C)(3) and III.A.1.m.ii. at:
https://www.hud.gov/program_offices/administration/hudclips/handbooks/hsgh