A release agreement is an agreement between a borrower and lender wherein the lender agrees to release a mortgage upon payment of some amount less than the full amount remaining due on the note. ATG requires that all release agreements with lenders be in writing.

The Illinois Credit Agreement Act requires that credit agreements be in writing to be enforceable. 815 ILCS 160/2. The act defines a credit agreement as "an agreement or commitment by a creditor to lend money or extend credit or delay or forbear repayment of money not primarily for personal, family or household purposes, and not in connection with the issuance of credit cards." ATG further requires that credit agreements for personal, family or household purposes be in writing because oral agreements are difficult to prove at trial, and because it may be difficult to determine which agreements fall into the exception.

In general, ATG also recommends that all promises of any kind from a lender be in writing. Such precautions protect both you and your client. Particularly, promises by a lender to record a release should be in writing, in case the lender never performs. If you have any doubt about whether a matter needs to be set forth in writing, please contact an ATG underwriter or staff attorney, 800.252.0402 (e-mail:, to talk it over.

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