North Carolina General Statute Sec. 45-36.7 outlines the steps necessary for a borrower to request a short-pay statement when all or a portion of the collateral is to be released without paying the full remaining balance of the obligation.
The request shall include a specific short-pay date, whether all or a portion of the collateral is to be released and description of the specific collateral to be released, if less that all of the collateral is to be released.
Within ten (10) days of receipt of the short-pay request, the lender is required to provide the following:
- information reasonably necessary to calculate the short-pay amount to the payment cutoff time (including any per diem interest amount);
- instructions on the approved payment method(s) and address or place where payment must be made;
- any conditions precedent that must be satisfied before the collateral will be released; and
- confirmation of the specific real property to be released.
Issuance of a short-pay statement does not effect any kind of release of liability for the balance due from borrowers and guarantors on the underlying debt, which balance is still subject to collection. Unless the statement expressly provides otherwise, the remaining monetary obligation survives sale of the property that secures the debt.