When a buyer and seller enter into a real estate contract, each of them acquires certain specific rights and obligations. If one party fails to meet an obligation, the other party may legally enforce their corresponding right. One of the most significant of the rights obtained under the contract is the right to force the sale if the other party tries to back out. In legal terminology that s called Specific Performance . If the buyer is brrowing money to buy the house, he brings to closing the money that is necessary to complete the transaction and pay closing costs, in excess of the funds they may have borrowed to buy the house.
Most people don t realize that the note and the mortgage are two separate and distinct things.
Once closing has taken place and the deed, mortgage and affidavits have been recorded, the original deed virtualy loses its value, but the original note and mortgage are kept by the lender until the debt is fully paid off.