Stuart Stone
I like to think of it this way:
I go to a loan shark and offer my watch (the valuable security), in exchange for $200.
I do whatever I do with the $200 (buy a jacket, some new shoes, whatever), but over the next 2 months I pay the loan shark the $200 plus whatever other terms we agreed (an extra $40 interest for example)...our lender/borrower relationship is over.
I now want my watch back.
The problem with mortgage companies is they say something like this:
'The original valuable security no longer has any value'...which what they're really saying is that the original valuable security no longer has any value to the relationship because the transaction is now complete.
Your watch (or the valuable security) still has the agreed upon value that you negotiated before you exchanged it for the $200 in the first place.
If you don't get it back, you bill the loan shark (mortgage company, whoever) for the original agreed upon value, default them, get an ex parte or default judgement in your favour, send in the sheriffs or whoever to recover the value of your 'valuable security'...or sell the debt to a third party & recover your value that way.