Legally Who Paid Off My Mortgage? - Posted by Gabriel Hayes

Posted by Michael Morrongiello American Note on August 11, 1999 at 10:14:56:

Although the situation was not exactly as describe (in my case the satisfaction was actually issued, rather than just a payoff confirmation letter). I recorded it ASAP. When the lender uncovered their mistake & faced with the prospect as you stated of litigaion or having a loan that was not marketable, they were more than willing to allow me to “tweak” my previous loan terms to more favorable terms as an inducement for me to execute a new mortgage & note which would re-establish the debt of record. Did I commit Fraud? Probably not, did I use their mistake to better the financing on my property by implementing this stratergy? Absoulutley YES.

Michael Morrongiello
Operations Manager

Legally Who Paid Off My Mortgage? - Posted by Gabriel Hayes

Posted by Gabriel Hayes on August 07, 1999 at 11:06:31:

I had 20 years left on my mortgage. Yesterday my mortgage company sent me back all the mortgage papers stamped PAID IN FULL, notarized etc. I hadn’t paid it off and I don’t know any good fairies who might have. QUESTION: If it is an error by the mortgage company, what happens? Do I have a windfall or am I liable when they audit and find their error?

Re: Legally Who Paid Off My Mortgage? - Posted by Irwin

Posted by Irwin on August 08, 1999 at 12:06:56:

If the mortgage company catches the mistake, and it’s likely they will, you still owe the money. What usually happens is that someone’s real payoff gets applied to the wrong account-in this case, yours.
If it happened to me, I’d call my mortgage company and ask them to check out what happened, and in the meantime keep sending them checks with your mortgage account number on it. If they send them back saying the account is paid in full, then do as Jackie suggests and pay them into a savings account, until they get it straightened out.

Mortgage bought by some entity. Look for another coupon book in the mail! (NT) - Posted by Bill C. (CA)

Posted by Bill C. (CA) on August 07, 1999 at 19:16:35:


It might not have been paid off… - Posted by DaveM(CT)

Posted by DaveM(CT) on August 07, 1999 at 18:12:00:

I hope for your sake that the gods smiled gracefully upon you…

If a mistake was made, well, someone will probably catch it.

This happened to me once also, when my mortgage was sold by my mortgagor to another party. My original mortgage paperwork was processed before the new mortgage was assigned, and the first thing I got was a paid off note!!

It wasn’t long before the new note arrived…

Did you help Donald Trump with a flat tire? - Posted by Ben

Posted by Ben on August 07, 1999 at 16:40:49:

This is a true story. One time a guy stopped to help a limo driver with a flat. The next day he was notified that his mortgage was paid off by the appreciative passenger…Donald Trump.

An Interesting Question… - Posted by Hugh James

Posted by Hugh James on August 07, 1999 at 14:41:25:

Frankly, I’ve just never heard of one like this before. If we assume they have made an error, I think they’ll have a right to correct it, just as a bank that erroneously credits your account for money that does not belong to you, has a right to take it back. Hmmmmmm…Interesting situation though.

Re: Legally Who Paid Off My Mortgage? - Posted by Jackie - MO

Posted by Jackie - MO on August 07, 1999 at 14:34:07:

Hmmm, lucky you! I would not say anything. Keep paying your payments, but to a savings account and not the lender. This way, if the lender contacts you on this error or whatever, you have the funds to pay them back for the months they did not receive any payments from you.

ACT FAST and SMART NOW! - Posted by Michael Morrongiello American Note

Posted by Michael Morrongiello American Note on August 08, 1999 at 22:24:03:

You should request ASAP an executed release of lien, reconveyance, or satisfacton of mortgage document. If your lender provides this to you then ASAP record it in the county where the property is located.

Regardless of whether or not a lender made a mistake, if they issued a release document to you and you record it, you’ve effectively extinguished the debt from record.

The other suggestions are valid as well, while you are waiting on this release document, continue to pay payments into a seperate account in the event the system catches on.

Michael Morrongiello
American Note
Operations Manager

Re: Did you help Donald Trump with a flat tire? - Posted by Felipe

Posted by Felipe on November 11, 1999 at 06:56:54:

Yep! I’ll do it! …I’m serious, not because is my buddy Don, is the way I am! a goooood person!..Donald, if you are reading this, thank you in advance to pay my mortgage and good luck Mr President!

Roofing nails - Posted by John Behle

Posted by John Behle on August 10, 1999 at 23:21:46:

Ok, let’s go hang out outside his building and strew some roofing nails in the road as his limo emerges.

Bring your payment coupons for the mortgage company :slight_smile:

Re: ACT FAST and SMART NOW! - Posted by JoeKaiser

Posted by JoeKaiser on August 09, 1999 at 23:15:42:

Not such a hot idea.

I’ve seen this sort of thing half a dozen times. Lender simply files affidavit that the satisfaction was filed in error and that’s the end of the story.

What’s there to negotiate?


I wouldn’t call it acting “smart” - Posted by Irwin

Posted by Irwin on August 09, 1999 at 21:13:30:

Asking for a mortgage release, knowing that the mortage hasn’t been paid if full is tantamount to fraud. But, if that’s your bag, be my guest. Yes, you might get away with selling the property and pocketing all the proceeds, but my guess is the morgage company bloodhounds will track you down, sue you and get a judgment against you. So unless you’re prepared to hide out for the rest of your life, forget this idea.
Actually, I’ve had this happen to mortgage company clients. We didn’t ask for a new mortgage. Didn’t have to. We just recorded an affidavit that the release had been recorded in error, and that the mortgage debt was still owed. No subsequent lender or buyer would touch the property with that document on record, and we collected all our money.
Also, to those who thought that this happened because the loan was sold, you should be aware that mortgage loan documents are NEVER canceled when the loan is transferred to another lender.

Re: ACT FAST and SMART NOW! - Posted by trandle

Posted by trandle on August 09, 1999 at 24:24:11:

Are you saying the lender has no recourse after you’ve recorded the release of lien? I believe that the other theories of the paid-off lender acting faster than the new lender are probably accurate, but you raised an interesting point. Thanks…

Conservative or Agressive Aproach You decide - Posted by Michael Morrongiello American Note

Posted by Michael Morrongiello American Note on August 10, 1999 at 12:15:12:

It sounds like you have legal background? You response is one of conservative caution as one should expect from legal counsel. While the approach of obtaining a formal release of lien to go along with the payoff letter previously provided by a lender may not work in every state, there are many states that recogize a real estate lien as being extinguished of record IF the release is filed. If the lender was remiss and issued a false release and that release is recorded, that debtor at the very least is now in a very STRONG position to open negotiations with that lender for some concessions as an inducement to reinstate the lien. A “faux pas” committed by a lender that cannot recognize whether or not a valid lien exist is their problem not the debtors. Taking the approach of releasing the lien of record is a more aggresive approach rather than the cautious one suggested. Certainly there are pluses and minuses to each stratergy. These issues can be discuss with ones individual legal counsel.

Michael Morrongiello
Operations Manager

Re: ACT FAST and SMART NOW! - Posted by Michael Morrongiello American Note

Posted by Michael Morrongiello American Note on August 09, 1999 at 12:33:40:

I would think from a negotiations standpoint at least, you would be in a much stronger position if you have a lien taht has been officially released of record.

It is doubtful that a lender can force you to re-execute another mortgage against your will simply because they indavertenly released the former lien.

Michael Morrongiello
Operations Manager

Re: Conservative or Agressive Aproach You decide - Posted by Irwin

Posted by Irwin on August 10, 1999 at 21:11:31:

It’s not a matter of conservative or aggressive. It’s a matter of using trickery and deceit (you know that the loan documents were cancelled by mistake)to try to avoid paying a just debt. In pure legal terms, this can be synonymous with FRAUD. But as I stated (and I do have a legal background) the lender doesn’t need the borrower’s acquiescence in executing new loan documents. The old ones are still good, and the erroneous recording can be cured by affidavit. So there goes the leverage. The only problem the lender might have would be in trying to sell this loan on the secondary market. The documents would probably be unmarketable.
Unless you’ve actually dealt with this situation in real life, you have no experience to support your advice.

Re: ACT FAST and SMART NOW; be HONEST - Posted by Damon

Posted by Damon on August 12, 1999 at 23:55:24:

I can`t knock anyone for how they handle their own affairs but I would make it right.

Getting yourself in a “stronger position” to negotiate because someone made a mistake is something I would not do.

I keep thinking or the saying " What comes around, goes around"