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dark_star

join:2003-11-14
Louisville
kudos:1

Mortgage Paid Off, Bank Won't Return Note

I paid off my mortgage last November. Paid off the 30 year mortgage in 6.5 years, hard to resist bragging.

I applied for mortgage at a local branch, and of course the loan was serviced through the corporate home in North Carolina, but the loan was never sold or transferred to a third party. Reducing the likelihood that the Note was physically lost to near zero.

Now, except for the original Note, the mainstream and very reputable bank involved has given me everything I could possibly want: a polite letter thanking me for my business and stating that the mortgage is paid off, they released the lien at the county clerk's office, and an official notarized original document from the county clerk titled “Deed of Release”.

I've contacted the bank several times. At first it was hard to make them understand that I wanted the original document Note, not a copy (they were happy to send a legally useless copy).

Now the mortgage department claims that they do not have the original note, and that perhaps it is at my local branch or in the hands of the county clerk. I consider this to be nonsense, since they cannot foreclose without the original copy of the note, they most certainly do not leave it in the hands of the local branch or the county clerk.

Getting back the original Note after mortgage payoff is a common but not universal practice, as far as I know there is no law saying they must return the Note.

Any tips on how to get them to return the Note? Would it be worth it to pay a lawyer to write them a request / demand letter?


IowaCowboy
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1 edit
Considering the amount of money you spent on the house I would hire an attorney, especially considering the bank you are talking about (I know who you are talking about) has been known to file frivolous foreclosures on properties that don't even have a mortgage.

Edit: Considering the foreclosure mess you want as many original documents as possible proving that you own the house and the their is NO mortgage on it. Ownership of a real estate is determined through a much more complex paper trail (deeds, bank notes, marriages/divorces, probate proceedings, various lien filings, and so forth) where a car is much more simpler with a piece of paper called a title from the Registry of Motor Vehicles.

If you can't afford an attorney and you fall within the income guidelines you may be able to get help from your local legal aid program but be advised such programs are underfunded and overworked and many times have to turn eligible clients away.
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reply to dark_star
Good luck sorting this out.

We paid ours off in 2007 and it never occurred to me to check the paperwork once we received the acknowledgement letter stating the loan was paid in full. And unlike yours, our mortgage had been sold multiple times over its 20ish year life, even just a few months before the payoff date.

Now I'm nervous - I'll have to dig through our paperwork. But I guess if it was going to blow up it would have done so by now.

Besides IowaCowboy See Profile suggestion to hire an attorney what about the Better Business Bureau? Are they still around?

/tom


nunya
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reply to dark_star
Look for a person / office in your county 'gubbamin' called something like "recorder of deeds". They may be able to tell you where it's at or how to obtain an official replacement.

After only 6.5 years, there should also be records at the title company right? I would call up the title company who did your sale and ask if they know anything.
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Tex
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reply to dark_star
I'm willing to bet if they were going to foreclose on the property they would find it. Then again, that hasn't stopped lending institutions (sometimes more than one at the same time) from foreclosing on homeowners who were current on their payments even when those lending institutions had no legal proof that they held the loan.

I would send a certified letter (return receipt requested) asking for the cancelled note documents. If that doesn't get any results, unfortunately, you'll probably need to get an attorney involved if you're going to pursue the matter.


leibold
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reply to IowaCowboy
I never heard of anybody getting any original documents back. In California (and I do realize that things may be different in other states) the most common result of paying off a mortgage is the receipt of a photocopied document with the obscure title "substitution of trustee and full reconveyance".

As far as I understand it the substitution of trustee (from a 3rd party trustee to the bank itself) is a way for the bank to save some fees and otherwise only serves to confuse the poor homeowner. The simultaneous full reconveyance makes the trustee a moot point.

The important part of the document is the area where the county recorder has acknowledged the full reconveyance. If that area is left blank the homeowner should complain to the lender but he can also take the document to the county and have it recorded himself (there is a small fee for that service).

Needless to say that this is a very important piece of paper and you should keep it with your home records (and probably a copy in a safety deposit box).
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hitachi369
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reply to dark_star

Re: Mortgage Paid Off, Bank Won't Return Note

I work for a bank, it is something we struggle with doing, returning the original documents that is. If you keep on pressing you will likely get results, or consider contacting the CFPB.

iknow_t

join:2012-05-03
reply to dark_star
sometimes the notes ARE lost, and the banks CAN'T foreclose. I'm sure you can find some info on that on Google..


fluffybunny

@cipherkey.net
reply to dark_star
get a Duplicate Indefeasible Title to the property (Or the equivalent in your state). its only issued if there is no mortgage pending on the property and no one can add/subtract/sell the property once you have it pulled (not even you). Put in a safe deposit box at a local bank. Thats all you need.


Majestik
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join:2001-05-11
Tulsa, OK
reply to leibold
My original document is kept in the county building downtown. Can't get the original. The bank had to send it to county. When I paid off my home in 2012. I drove downtown and paid the $2 for a copy. Had to wait about three weeks for it to be available though.
It released the lien,paid in full,etc. with the bank's seal and city of Tulsa stamp on the document.
It's in my safe with the title deed and all other mortgage documents also a copy with attorney.
They told me I didn't need to get a copy because it's on file but I wanted one anyway for my records.
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cb14

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reply to leibold
The only thing you get here is the release of lien and that's enough. Since this release is recorded in the official court records there is nothing the bank could do after that. But you have to make sure that such release has been done. Again, every state has different laws.


dark_star

join:2003-11-14
Louisville
kudos:1
reply to IowaCowboy
said by IowaCowboy:

Considering the amount of money you spent on the house I would hire an attorney

I might have an attorney write them a letter. I don't want to try to make a lawsuit out of it. Too much downside for too little upside.


dark_star

join:2003-11-14
Louisville
kudos:1
reply to tschmidt
said by tschmidt:

what about the Better Business Bureau?

BBB is still around, and some companies do care about their rating. That might be worth a try.


dark_star

join:2003-11-14
Louisville
kudos:1
reply to nunya
said by nunya:

Look for a person / office in your county 'gubbamin' called something like "recorder of deeds". They may be able to tell you where it's at or how to obtain an official replacement.

I'll try them out, but I don't think they would have it. It is the one piece of paper that the lender holds onto in case they need to foreclose.

said by nunya:

After only 6.5 years, there should also be records at the title company right? I would call up the title company who did your sale and ask if they know anything.

I do have an owner's title insurance policy. But I think title insurance only covers undiscovered claims which originated prior to the date of purchase.


dark_star

join:2003-11-14
Louisville
kudos:1
reply to hitachi369
said by hitachi369:

consider contacting the CFPB.

Thanks for the suggestion, I will try them.


dark_star

join:2003-11-14
Louisville
kudos:1
reply to iknow_t
said by iknow_t:

sometimes the notes ARE lost, and the banks CAN'T foreclose. I'm sure you can find some info on that on Google

I recall reading about such a case, quite a few years back, in Florida if memory serves. The guy's loan had been sold about a dozen times. He got behind on his payments. Examining his foreclosure documents, he realized that no copy (on a foreclosure they would not send the original, of course) so he asked to see a copy of it. When they didn't produce a copy, he realized it had been lost in the many transfers.

The result was that he got to stay in his house without paying. There was still a lien on it, and he would never own it free and clear. But the law did not let them foreclose without the Note.


dark_star

join:2003-11-14
Louisville
kudos:1
reply to fluffybunny
said by fluffybunny :

get a Duplicate Indefeasible Title to the property (Or the equivalent in your state). its only issued if there is no mortgage pending on the property and no one can add/subtract/sell the property once you have it pulled (not even you). Put in a safe deposit box at a local bank. Thats all you need.

Yikes, I irreversibly can't sell my own paid for house if I lose a piece of paper? What if the bank burns down or falls into a sinkhole? That sounds a lot worse to me than the minuscule chance that my former mortgage company would attempt to foreclose on my paid for house by mistake. I genuinely appreciate your suggestion, but No Thanks.


dark_star

join:2003-11-14
Louisville
kudos:1
reply to cb14
said by cb14:

The only thing you get here is the release of lien and that's enough. Since this release is recorded in the official court records there is nothing the bank could do after that. But you have to make sure that such release has been done. Again, every state has different laws.

I received an original legal document notarized by the county clerk, called "Deed of Release". It does release the lien. But when I googled about what happens when you pay off your mortgage, the return of the Note did pop up on most sites. It is a common but not universal practice to return the Note.


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reply to dark_star
I would ask your attorney, probably the same one you used when you purchased the property. I always have an attorney when doing any real estate transaction, both for a title opinion, and just to make sure everything is being done properly. It usually costs me $200-300. Well worth it.

iknow_t

join:2012-05-03
reply to dark_star
said by dark_star:

said by cb14:

The only thing you get here is the release of lien and that's enough. Since this release is recorded in the official court records there is nothing the bank could do after that. But you have to make sure that such release has been done. Again, every state has different laws.

I received an original legal document notarized by the county clerk, called "Deed of Release". It does release the lien. But when I googled about what happens when you pay off your mortgage, the return of the Note did pop up on most sites. It is a common but not universal practice to return the Note.

if the note is lost, then they don't have it, so can't produce it. there's no sense in them keeping it even though banks can't be trusted. but as far as them trying to foreclose, they can't, they don't have the note, and you have proof of release.

guppy_fish
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reply to dark_star
The is no requirement to get the banks paper work on your now satisfied mortgage, all that matters is the proof of satisfaction of the loan was meet, which is the lien release. Once recorded, the original signed documents have no purpose or value and the bank has no duty to retain or send back.


Tex
Premium
join:2012-10-20
kudos:2
The OP stated that in his original post.

said by dark_star:

Getting back the original Note after mortgage payoff is a common but not universal practice, as far as I know there is no law saying they must return the Note.

But, that shouldn't stop him from trying should it?


djrobx
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reply to leibold
said by leibold:

I never heard of anybody getting any original documents back. In California (and I do realize that things may be different in other states) the most common result of paying off a mortgage is the receipt of a photocopied document with the obscure title "substitution of trustee and full reconveyance".

This seems correct for California. I paid off my mortgage. A receipt of "full reconveyance" is exactly what I got from Wells Fargo, along with a letter thanking me for my business.

My mom also recently paid off hers, and she didn't even get that. Our realtor was able to request it from the title company.

It looks something like this:
»www.saclaw.org/Uploads/files/for···conv.pdf


mattmag
Premium,ExMod 2000-03
join:2000-04-09
NW Illinois
kudos:3
reply to dark_star


In Illinois, I have received back my original documents each time I either re-financed the mortgage, or sold the house.

It may very well be the differences in state practices or laws, who knows.


Boooost

@151.190.40.x
Here in NJ, the lender sends a document to the county clerk indicating that the mortgage has been satisfied and canceled. I don't think I ever got any original documents. What counts is what is filed with the county clerk.


Boooost

@151.190.40.x
I went to the safe deposit box yesterday and checked my records.

For a loan with a small, local bank, they returned an original, notarized document saying the loan had been canceled. The document was also filed with the County Clerk.

For a loan from a big nationwide bank (which took a bunch of government money, then went bankrupt and is totally out of business), I just got a generic form letter, but they filed a document with the County Clerk. Good thing, because I'd never be able to get any records with this defunct bank.

It's also a good thing I refinanced when I did, otherwise I'd be in Ocwen Hell with the former bank's other customers.