If a mortgage is fully paid and discharged by the bank, does the Note stay in tact as a fully due and payable debt? 12 Answers as of August 19, 2012

If mortgage is "fully paid, satisfied and discharged" by bank. In 2008 Bank verbally agreed to a short sale but never provided release documentation, now collection agency is hounding me for difference plus interest, fees, claiming Note is still valid.

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Dennis P. Mikko Attorney at Law | Dennis P. Mikko
The note is the actual instrument that signifies the debt. The mortgage is the security instrument securing the debt to your home. If you satisfied the debt in 2008, the note should have been cancelled. You should contact the bank to determine why that did not happen.
Answer Applies to: Michigan
Replied: 8/19/2012
The Law Office of Darren Aronow, PC
The Law Office of Darren Aronow, PC | Darren Aronow
You have to check the language in your payoff letter from your short sale. Often the deficiency debt is sold to a debt buyer who tries to collect.
Answer Applies to: New York
Replied: 8/19/2012
Victor Varga | Victor Varga
No, the bank should have issued you a Certificate of Satisfaction listing the mortgage as paid. Show this to the collection agency and it should go away.
Answer Applies to: Maryland
Replied: 8/18/2012
LAW OFFICE OF JEFFREY Z DWORIN
LAW OFFICE OF JEFFREY Z DWORIN | JEFFREY Z DWORIN
No. You should request the cancelled note from the bank and keep it in a safe place.
Answer Applies to: Michigan
Replied: 8/18/2012
Slotnick & Schwartz
Slotnick & Schwartz | Leonard T. Schwartz
The Note is the personal obligation. The mortgage is only a lien on the home. If you do not have proof that the Note has been fully satisfied you still owe it.
Answer Applies to: New Jersey
Replied: 8/18/2012
    Law Office of Bijal Jani | Bijal Jani
    Unfortunately, since whatever agreement you had with the lender was not put in writing it is very difficult to prove the short sale agreement. However, if you have other written communications such as emails and letters, you may seek to bring a claim against the lender and collections agency as a meritless claim.
    Answer Applies to: New York
    Replied: 8/18/2012
    Harris, Yug & Ohlinger
    Harris, Yug & Ohlinger | Roberta Ohlinger-Johnson
    Everything involving real estate is governed by the Statute of Frauds. Therefore all agreements must be in writing. If the bank never agreed to the release, how else was title transferred.
    Answer Applies to: Nevada
    Replied: 8/18/2012
    Stephens Gourley & Bywater | David A. Stephens
    That would depend on whether the short sale included a release of the note too.
    Answer Applies to: Nevada
    Replied: 8/18/2012
    Clos, Russell & Wirth, P.C. | Gary A. Russell
    If the bank did not forgive the deficiency between the short sale purchase and the amount owed on the note (and you would have received a 1099 at the end of the year showing the forgiven debt as income for tax purposes if it did) then the debt remains owing.
    Answer Applies to: Michigan
    Replied: 8/18/2012
    Law Office of D.L. Drain, P.A.
    Law Office of D.L. Drain, P.A. | Diane L. Drain
    You need to go the title company that handled the short sale.
    Answer Applies to: Arizona
    Replied: 8/18/2012
    Musilli Brennan Associates PLLC
    Musilli Brennan Associates PLLC | John F Brennan
    Engage an attorney, from what you have related it would appear you should not be liable, but the devil is in the details.
    Answer Applies to: Michigan
    Replied: 8/18/2012
    MatthewR. Schutz, Esq | Matthew R. Schutz
    You should have a letter from the bank that discusses the terms of the short sale. The bank typically will note that the sale is either non recourse (won't come after you) or recourse (may come after you). I would speak with an attorney, bringing the entire file for him to review.
    Answer Applies to: New Jersey
    Replied: 8/18/2012
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