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Home >> Lending >> Home Mortgage
At What Point is the Mortgage Satisfied?
My brother is a co-signer on my mortgage. He went to the bank, paid off the mortgage, and had the bank assign the note to an LLC that he formed. When this took place, I was told that the terms would remain the same. I have always had a 16-day grace period with the previous lender. Now I am receiving late notices dated the first day of the month. If a principal on the note pays it off, isn't the mortgage satisfied?
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 If you didn't sign a new note payable to your brother, it appears that he bought the mortgage note rather than paying it off. Now he is the creditor, not the old mortgagee.
Assignment of a mortgage note doesn't change the terms of the note. If the original note gave you a grace period before late fees could be imposed, you should still have that grace period.
However, the note doesn't control how late notices are generated. It may be annoying, but there's nothing inherently wrong with sending a late notice the moment a payment due date is missed. The two significant things ow which you should be aware: you don't get hit with a late fee if you pay within the note's grace period, and you aren't reported as late to the credit bureau if you pay within the note's grace period.
Published on BankingQuestions.com 11/24/09
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