Once a loan is paid off and the collateral is no longer necessary, the lender has the responsibility of returning possession back to the borrower or his agent.

Note: Commercial lenders have the option to retain liens for prospective loan applications they are currently working. Office associates shall not execute or prepare any lien releases. Loan Servicing processes all paid out loans and is responsible for lien releases for all loans.

Paid Outs

There is a 10 business day wait period from the payoff posting date before releasing Collateral and/or Promissory Notes. This timeframe ensures the payoff source will not be returned.

• Loan Servicing processes the paid out loan.
• Real Estate secured paid out loans must have officer approval before the mortgage(s) can be satisfied. 
• Once the recorded Satisfaction/Cancellation has been returned to the bank, the original is sent to the client and a copy is scanned to the loan file.

A collateral release of any kind are considered to be a loan modification and MUST be underwritten and approved within the loan authority matrix and documented in Abrigo (both consumer and business).

If you receive a request to release collateral from an existing loan, you must enter the request in the loan system to be underwritten and approved within the loan authority matrix. Documenting satisfactions and partial releases of a portion of the bank's lien on collateral are completed when:

• Collateral is no longer required in connection with an outstanding obligation
• Collateral is being substituted

Note: Commercial lenders have the option to retain liens for prospective loan applications they are currently working.

Consider the following when reviewing a request for a release or partial release of collateral:

• The amount of principal reduction required to release a portion of our collateral is to be determined by normal policy and underwriting standards and approved by:
  • If cumulative exposure is within lender’s lending authority – lender can approve the modification and determine the release figure.
  • If cumulative exposure is above lender’s lending authority but within the authority of their manager or division manager - manager or division manager must approve the modification and confirm the lender’s release figure.
  • If cumulative exposure is above lender, manager & division manager’s lending authority – must obtain release figure and seek approval from credit administration.
• Partial Release of Mortgage must be prepared by a Closing Agent, at the client’s expense. (Doc Prep cannot prepare these)
• Titled or UCC Secured Loans 
  • Once release is approved, enter Synapsys event to request lien release or UCC termination, etc.
• The Lender must collect required release amount prior to executing release documents.
• Copy of Release is to be sent to _Loan Svc – Records so that the system can be updated regarding coding, collateral tracking, insurance tracking, tax information and flood determination tracking. THIS IS VERY IMPORTANT! 

Loan not paid off but releasing collateral

All requests for partial collateral release must be submitted through the appropriate loan system (Abrigo).

• Submit a research request via Synapsys to send the collateral to the lender for release. 
• Loan Servicing will remove the collateral and the original collateral receipts from the vault.
• Loan Servicing will send the collateral in the blue lock bag to the requesting associate. 
• Collateral receipts will be forwarded inter-office and the borrower must sign the original receipt acknowledging return of the collateral. 
• The signed collateral receipt indicating receipt of returned collateral is to be delivered to the loan servicing to be imaged to the file.