What is my obligation if my lender wants me to re-execute my mortgage?
Question Details:
I refinanced a home 3 years ago with alender. Within a month of closing, that lender sold the note to another lender. All loan payments have been on time. The current lender via an attorney just sent me a notice asking me to "re-execute" the mortgage because apparently the mortgage was never recorded with the town and they don't have a copy with original signatures. Why would I want to "re-execute" the mortgage? I checked the land records and it appears the new lender never filed a lien.
Typically among the loan documents that are signed at the time of a closing on a mortgage loan is a document entitled "Compliance Agreement" or "Errors and Omissions Agreement" or something to that effect. These documents usually state that the borrower agrees that if an error occurs and it is necessary to obtain the borrower's signature on another document in order to carry out the purpose and intent of the loan transaction, the borrower will cooperate and sign such additional documents as necessary or appropriate, etc. You should check among your copies of the loan documents that you signed at the closing. If this type of document was signed, it probably covers the situation that your lender recently contacted you about, and it probably makes you obligated to cooperate and sign a duplicate mortgage deed, which can then be recorded on the land records. These Compliance Agreements and Errors and Omissions Agreements typically state that if the borrower fails or refuses to cooperate as requested the loan can be declared in default. There can be many negative repercussions of a declared default on a mortgage loan, including litigation and an adverse report on your credit rating.
