My home mortgage (5/1 ARM) with a bank was secured with a $150k CD. On the maturity date (1 yr.) the branch manager released the CD in full. I then opened another CD for $75k. The bank placed a hold on this CD as collateral on the loan. This new CD (different numbers) is not the same as listed in the mortgage papers. Can they place a hold on this CD? I think they made a mistake by releasing the old CD in full and now are holding the other CD. I think I should have signed new mortgage papers for this new CD.
In most cases when a CD is taken as either primary or secondary collateral, the loan documents provide for substitution of collateral. In this case, the first CD had matured and had to be paid out. The second CD was simply substituted.
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In most cases when a CD is taken as either primary or secondary collateral, the loan documents provide for substitution of collateral. In this case, the first CD had matured and had to be paid out. The second CD was simply substituted. 