MORTGAGE AND NOTE INSEPARABLE, OTHERWISE INVALID OR CONTRARY TO INTENT OF NOTE May 20, 2013

A mortgage and promissory note cannot be separated in terms of the holder. The mortgage is the security guaranteeing the note. If person "O", the mortgagor, gives the note to Person "P", and the mortgage to person "M", then the separation of the note and mortgage creates a problem in the event of default by O. When O defaults, P's principal, which he lent to O, is not returned to him. However, because M holds the mortgage, that is, the collateral to make P whole in the event of O's default, since there is no connection between M and P, P cannot collect the collateral that M holds. Thus, a separated note and mortgage makes no sense, unless there is an explicit connection/contract between M and P. In the absence of such contract, the mortgage is useless, and the note is violated as far as intent is concerned, assuming the note requires a mortgage. Therefore, in order for a note to be forecloseable, the mortgage must be held by the same entity. Therefore, a mortgage is a security related to the note, and they are inseparable. Because the mortgage is a security for the note, and is legal title in a title state such as Vermont and Massachusetts, although the note is legal tender and able to be swapped around from entity to entity without any sort of reference to title, the mortgage cannot be, and instead, it must be handled differently. That different way of handling is spelled out in the states' real property laws, which require that every entity that holds a mortgage must record the mortgage, or at the very least, the mortgage holder's rights are not perfected and therefore are unexecutable. Because the mortgage and note are inseparable, it stands to reason that a note holder will be holding a mortgage, and because it holds a mortgage, it must record that mortgage. Because it records the mortgage, the note holder, who is also the mortgage holder, is identified. Identification is important because it protects the mortgagor as well as the mortgagee. Identification of the mortgagee assures that the mortgagor will not be liable for a mortgage after the debt is discharged. Of course, recording protects the mortgagee, because it assures that when a loan is to be paid off, it is paid to the correct party. Absent recording, neither mortgagor nor mortgagee are protected. And of course, absent recording, the mortgagee has violated at least the laws of the State of Vermont. Ernie Ciccotelli