Lender won't grant partial release of mtg?

[reinvestor]

What is the name of your state?What is the name of your state? Michigan
I have two properties on a commercial mortgage, a SFH and a small apt. bldg. I am trying to sell the apt. I asked the bank for a payoff figure that would release that property from the loan. The representative I spoke to said that it was possible I wouldn't be allowed a partial release. Meaning that if I sell one property I would be required to pay off the entire loan.

They have asked for my debt and income information for one year before they will consider releasing the one property. I have never had a late pay on the mortgage and if I am *selling*, don't know why that information would be relevant.

I don't know that I would be able to sell 1 property at an amount high enough that it would pay off the loan completely.

I never thought there might be a problem releasing one of the properties from the note when I refinanced with this lender. I just assumed I would be able to when the time came. Now it seems they could have me trapped, despite the wording on the promissory note which says, ""You may release, substitute or impair any Property securing this Note" and despite the fact that there is a mortgage document for each property with a specific monetary value assigned to each.

If the lender won't allow a partial release, they are effectively prohibiting me from selling the property for another 2 years. Can they do this?

Some more information that might be useful:
Int. rate on mortg. is 8%.
I would refinance, but I am in year 3 of a 5 yr. balloon with a 5-4-3-2-1% prepayment penalty phase.

 

[shortbus]

Commercial mortgages usually don't have a prepayment option. You need to re-read the fine print and apprise yourself of the facts of your contract, not stake out a position based on assumption and what you think SHOULD happen.

 

[HomeGuru]

What is the name of your state?What is the name of your state? Michigan
I have two properties on a commercial mortgage, a SFH and a small apt. bldg. I am trying to sell the apt. I asked the bank for a payoff figure that would release that property from the loan. The representative I spoke to said that it was possible I wouldn't be allowed a partial release. Meaning that if I sell one property I would be required to pay off the entire loan.

They have asked for my debt and income information for one year before they will consider releasing the one property. I have never had a late pay on the mortgage and if I am *selling*, don't know why that information would be relevant.

I don't know that I would be able to sell 1 property at an amount high enough that it would pay off the loan completely.

I never thought there might be a problem releasing one of the properties from the note when I refinanced with this lender. I just assumed I would be able to when the time came. Now it seems they could have me trapped, despite the wording on the promissory note which says, ""You may release, substitute or impair any Property securing this Note" and despite the fact that there is a mortgage document for each property with a specific monetary value assigned to each.

If the lender won't allow a partial release, they are effectively prohibiting me from selling the property for another 2 years. Can they do this?

Some more information that might be useful:
Int. rate on mortg. is 8%.
I would refinance, but I am in year 3 of a 5 yr. balloon with a 5-4-3-2-1% prepayment penalty phase.

**A: read your mortgage loan docs. The lender is under no obligation to do a partial release.