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On February 13, 2026, New York enacted S.8768 (“S.8768”), which amends the 2025 legislation governing mortgage discharge procedures under Real Property Law § 275 and Real Property Actions and Proceedings Law § 1921 (the “Statute”). The Statute provides that a mortgagee shall not return, destroy, or otherwise refuse to accept a payment made pursuant to the terms of a payoff letter even if the payment does not cover the full amount of principal, interest, and other amounts due. It also permits refusal only if a defect prevents the mortgagee from identifying with reasonable diligence the mortgage for which the payment is made. The Statute further provides that a payment made pursuant to a payoff statement does not result in the issuance of a certificate of discharge or the execution of a satisfaction of mortgage unless the payment covers the full amount owed. S.8768, therefore, requires acceptance and application of payoff-related payments while preserving that only full payment triggers a formal discharge or satisfaction of the mortgage.
S.8768 also amends the effective date of the underlying Statute. The prior language provided that the Statute took effect immediately. S.8768 changes that timing to the 180 days after the Statute becomes law. Although S.8768 takes effect immediately, Sections 1 and 2 take effect on the same date and in the same manner as the 2025 legislation being amended.
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