I should know this seeing as I am a licensed real estate agent, but I am not 100% sure. I think the answer is yes. Logically the bank holds the note, so as long as they accept the payoff amount, I would think it is ok. Why would someone who was responsible for the debt mind? Unless it was a tax shelter of some sort? I guess maybe the law might require the person who owes the note might have to sign off also.
I’ll send the question to some people who might know for sure.