Rodney’s Undeveloped Land

I and two others purchased an undeveloped lot in the Florida Panhandle in 2005.  When the loan came up for a balloon payment in 2008, I found my co-owners were unable to pay and one had transferred his interest to the other.

To clear the air, I paid my 1/3rd ($127,500) to the lender and was given a full release from the note in the amount of $382,500 but no certificate of satisfaction or partial release from the mortgage. 

My remaining co-owner entered into a modification agreement with the lender with a new unpaid balance of $255,000 on the note and security instrument which reflects my payment. 

In view of lender’s refusal to cooperate, is it possible to infer a partial release by virtue of the lenders acceptance of my payment and their having released me from the entire note. My question is in anticipation of foreclosure and due to my payment I feel I should share in the foreclosure proceeds. 

Rodney

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Hello Rodney,

I would have to guess that in the event of foreclosure, there wouldn’t be any ‘foreclosure proceeds’ and instead there might be a deficiency balance owed.  Otherwise, if the property has equity then it should be sold prior to foreclosure.

Any names that appear on the deed would also have to sign the mortgage.  The mortgage pledges the property as collateral but the promissory note is the promise to pay it back. 

In Florida, foreclosure is a judicial process and each person claiming an interest in the property (whether they signed the note or not) would have to be sued (either by in-hand service or by publication) by the lender and each person then could seek their dismissal. 

Thanks for the questions and hope this helps.

Paul

This author is not an attorney and this information should not be considered legal advice.  Please consult an attorney for legal advice.