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Roger, Lawyer
Category: Real Estate Law
Satisfied Customers: 31768
Experience:  BV Rated by Martindale-Hubbell; SuperLawyer rating by Thompson-Reuters
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I was given a full release deed of trust from my previous mortgage

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I was given a full release deed of trust from my previous mortgage company Bank of America, the loan was from 2010, and was just recorded as being released in 2013. I since then have refinanced/transferred my loan since then. I have had no second mortgage on this property. It was with Countrywide originally, then transferred to Bank of America, then transferred to Michigan Mutual, then transferred to Flagstar Bank, and now it is being serviced by Selene finance. Is this a screw up? Does the note/deed of trust that Selene finance has hold water? Or did I just get a 140K lottery ticket?
Hi - my name is XXXXX XXXXX I'm a Real Estate litigation attorney. Thanks for your question.

If you haven't paid off your loan, then you still owe the money under the PROMISSORY NOTE even if the DEED OF TRUST has been released by error.

The promissory note is the document that says you promise to repay the debt - - it's your mortgage contract and the most important document. The deed of trust is just the document that evidences the bank's lien and is public notice of the bank's lien.

Thus, if the deed of trust has been released, that just means that the lender's lien rights/first lien don't exist, so it's like your loan is unsecured.

Also, it could be that one of these successor lenders have filed or re-filed a deed of trust that would validate the lien. The only way to know the lien status is to have an abstractor or an attorney do a title search for you to see what liens are recorded against the property.

Customer: replied 4 years ago.
If we have both the note and deed if trust in hand? I have the note in hand, signed in blue ink saying paid in full. So pulling an Ownership & Encumbrances report from the title company would be beneficial in showing who has the lien if there is one. If, said company made the mistake in releasing both documents, is there any hope for the lottery ticket? If not, no worries, it would just make my day. Thanks for your reply.
The lender usually keeps the original note, so if you have it, that's a little unusual - - or would indicate a possible mistake. But, if you have a canceled note and deed of trust, and if there's no other filing from another lender evidencing the loan, you may have found yourself in a very advantageous position. The only real restriction I can think of is that most loan documents state that if there is an error or if something needs to be signed to validate the loan, then you will. SO, it may be possible for the lender to claim the release as a mistake and then demand that you re-sign the necessary documents to reinstate the loan - - so you may be in a good situation, but the lender likely has some leverage as well.

Yes, a getting a title search/ownership and encumbrance report would be good to have. This will show you whether any other lender has filed anything regarding the lien.

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