What can a bank do toa borrower if the bankreleaseda mortgage on the wrong property?

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What can a bank do toa borrower if the bankreleaseda mortgage on the wrong property?

We had 2 loans for 2 different homes through the same bank; 1 we decided to pay off. When we received the letter of paid in full and the deed, we realized the bank screwed up and sent us the deed for the other home and the note stating it was paid in full. Now this home had a lot left to pay on now; they are trying to get us to give them back the deed and give us the other one that we didn’t owe much on. Yes the right thing to do would to be giving it back but we are talking a large difference and a huge screw up on the banks part; this was approximately a $68,000 mistake.

Asked on September 23, 2011 under Real Estate Law, Wisconsin

Answers:

FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

Legally you are obligated to sign all documents to be recorded on your property that will need to be prepared at the bank's expense since it was the entity that erroneously signed a full conveyance of the paid of mortgage (or trust deed) on the wrong property that you owned.

If you do not agree to do what the bank wants done as a result of its mistake, it will most likely file a lawsuit against you to reform and rectify the error that it did as an equitable matter.

If you do not do so, you will be faced with having to defend the likely lawsuit. I suggest that you retain an attorney and negotiate with the bank for a better interest rate on the loan evidenced by a promissory note secured by the mortgage (trust deed) with respect to the one that was inadvertently retired. That way you receive a benefit as well.


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