Legal Question in Real Estate Law in Alabama

mortage question

if your mortage has been regitered in probate court as paid in full or canceled by your mortage company but they say it is not but you have the original document that they sent you that says it is do you still owe them money

Asked on 4/26/07, 6:54 pm

1 Answer from Attorneys

Robert Kreitlein Robert Kreitlein, Attorney at Law

Re: mortage question

Okay, a couple of different issues here. This is kind of a complicated issue and I really need more to go on to give you a good answer (such as what the lender is claiming they are owed-principle? fees?) I'll do my best to give you some good information but you might want to contact an attorney directly so you can get fully-informed advice. When you sign a mortgage loan, you're actually doing two things: One, you're obligating yourself to pay back a particular sum of money at an agreed-upon rate of interest and for a specified period of time-this is done via the "loan agreement" or "note". Second, you're executing a mortgage, which is different from the note or agreement. The mortgage is not an agreement to borrow and pay back money-it merely augments the note or agreement and says if you don't pay as agreed on the loan, the holder of the mortgage and note can foreclose their interest in the property. So, a mortgage satisfaction (the document filed in the probate court saying that the mortgage no longer is valid) only means the lender no longer holds a security interest in your property. I would argue that it is good evidence that the debt was paid in full (since it would not be smart to release your mortgage if you're still owed money!), but it does not technically mean the debt is fully paid as per the note or agreement. Long story short, you can use the mortgage satisfaction as evidence to show that the debt was paid but if the lender counters with a full account history and it shows that they merely mistakenly released the mortgage and you do still owe money, you might still be found to be liable for that debt. Of course, it's now a personal or "unsecured" loan since they were dumb enough to release the mortgage but it's still a debt nonetheless. Good luck!

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Answered on 4/26/07, 9:37 pm

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