In most cases, a mortgage on property must be paid back to the lender according to an agreed upon schedule. In an August 2, 2017 Massachusetts real estate case before the Land Court, the parties involved did not have a traditional bank mortgage arrangement. The plaintiff had filed a petition to amend the title to his property by expunging the recorded mortgage. The plaintiff argued that a mortgage he granted to his brother, the defendant, had become obsolete and unenforceable by the passage of time. The defendant argued that the limitations period had not yet passed, and therefore, he retained the right to foreclose on the mortgage.
In 1994, the plaintiff signed a promissory note and granted a mortgage to the defendant in the amount of $275,000. The mortgage was recorded and noted on the certificate of title. Although the original promissory note was lost, the mortgage incorporated the terms of the note by reference. In 1996, the parties modified the loan by extending the remaining principle sum of $150,000, but they did not record the document.
A mortgage is an interest in real property that secures a lender’s right to repayment, such that should the debtor fail to timely repay the debt or otherwise default on his obligations, the creditor can foreclose on the mortgage and recover. A promissory note and mortgage co-exist, providing the lender with a double remedy, one upon his deed, to recover the land, another upon the note, to recover a judgment and execution for the debt. The mortgage remains in full force until the debt shall be paid.