Unfortunately, the credit union is being straight with you. As they stated to you, if there is a connection between accounts, they have the lawful ability to freeze assets from one account to satisfy obligations of another account. In this situation, the connection is your name and social security number. As your information is attached to both accounts, they may do as they did.
The only way to cure the problem would be to eliminate the connection. To do so, you would either remove your name from one of the accounts or move the account to another banking institution. The mortgage would not be easily moved to another institution. However, as the trust is nearly complete, perhaps this would be the account to move.
Please let me know if anything requires clarification.
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