Mortgage Discharge by Fiduciary
Deeds and Conveyances: Special Rules Regarding Fiduciaries
A mortgage is personal property in the hands of the mortgagee. Upon the mortgagee's death the mortgage, like all personal property, vests in the personal representative (unlike real estate, which devolves to the heirs or devisees).
Because the mortgage is personalty, it does not "merge" with the real estate. This is said in Newhall,Settlement of Estates & Fiduciary Law in Massachusetts, Lawyers Co-operative Publishing Co. (Fourth Edition, 1958), §111:
As has been previously stated, the executor or administrator becomes vested, immediately upon his appointment, with the title to all the personal property. Thus, if there are mortgages, bonds, notes and other securities, the title is in the executor or administrator, and he must make a formal transfer before it can vest in the legatee or heir. This is a very important rule to be kept in mind, as executors and administrators frequently neglect to make the necessary transfers. This rule applies even though the executor or administrator is himself the legatee or heir.
Of course, until the executor in fact makes the transfer to the legatee or heir the fiduciary can deal with the mortgages, bonds, notes or other securities that make up the personal property of the estate. In the case of a mortgage, the fiduciary can give a discharge of the same. This rule applies also to foreign personal representatives, as well. Such a fiduciary can discharge a mortgage without ancillary proceedings being commenced, since the discharge would be the mere receipt of funds paid voluntarily to him, see Crocker's Notes on Common Forms, Little, Brown & Company (Seventh Edition, 1955), §548 and the cases cited.