release of a lien friend had on my home for a personal loan

[nearSacramento1]

What is the name of your state (only U.S. law)? California

A family friend had a lien on my home for a personal loan i had with her. This was fine. We short sold the home and of course she had to release the lien which she agreed to do for a $1500 payment to her as settlement from the bank. It's recorded on the deed paperwork as "payoff to second lien holder" and her name there. The personal loan was for a lot more than $1500 it was around 20k. She released the lien so that i could short sell the home, with the understanding that of course I would continue to pay her back the amount I owe for the personal loan. Is what she signed TECHNICALLY a paper simply releasing a lien, or is it a paper that actually legally does state that the $1500 satisfies the personal loan? Her husband is trying to tell me that this $1500 should not count as a payment to them from me, but i think it should. it should be deducted from the grand total of the personal loan. am i correct? of course i would never NOT pay back the personal loan, but according to the letter of the law has the repayment of the loan been satisfied (via the signed paper?)

thanks

 

[FlyingRon]

How do we know? Hold the paper up to the computer so we can see. If the bank said, here's $1500 if you will release the lien, it would sound like it has nothing to do with reducing the balance on the loan. It's a payment to get her to give up her security in the property.

 

[swalsh411]

If this document did not address the $1,500 as being payment towards the loan balance, then it's not payment towards the loan balance. You paid them to do something which now puts them in a weaker position. You didn't make a payment on the loan. Just because you would like it to be, doesn't make it so.