I am learning that a quit claim deed is a weak instrument and if I don’t refi, that the old partner still can rescind the quit claim decision and do harm, block a sale, or other unwanted behavior.  

Not to steal Steve's thunder on this matter but in general @Randi Del Gatto there are some defects in this asset which act as barriers to enforcing the instrument used which was a Contract For Deed not simply a Mortgage or Deed of Trust.  

I have a low risk tolerance and am not comfortable putting that money into stocks or bonds for the foreseeable future.I am wondering whether it would be possible to pay down $150K of principal, then tap our equity through a HELOC or some other instrument when the time comes to buy another property.  

The napkin thing you mention is just an unsecured loan with no security instrument providing any assurances of repayment.

I was the successful bidder on a Sheriff Sale for $48K, value around $100K the foreclosing entity is Carrington Mortgage, its a federally insured Reverse mortgage, and they record the originating mortgage, and FHA records a mortgage in the same amount ($160K in this case 150% appraised value) USA was not identified in the proceeding, does anyone know how this plays out, will the FHA instrument stick, or does it get wiped out?

Borrower shall occupy, establish, and use the Property as Borrower's principal residence within 60 days after the execution of this Security Instrument and shall continue to occupy the Property as Borrower's principal residence for at least one year after the date of occupancy, unless Lender otherwise agrees in writing, which consent shall not be unreasonably withheld, or unless extenuating circumstances exist which are beyond Borrower's control.If you breach your Mortgage, the lender can call the Note due.Hope that helps!

Hey Brent,First, So like I said, I did't have time earlier to tear it up point by point, but now I'm at home and I have a 6 pack of Fresh Squeezed and nothing but timeSecond, if you haven't seen the movie and want to, don't read this as it will be a huge spoiler.SPOILER ALERTSo yes, there are those in the movie who are shorting various CMO debt instruments.

Things you must not do You must not; i) commit an act of bankruptcy; or ii) fail to pay me on time any money you have to pay me under this contract; or iii) pay any repayment/s with a check, direct debit or other instrument that is subsequently dishonored by a bank; or iv) fail to comply with any condition of this loan contract; or v) make any material false or misleading representation.9.

Bonus if you play an instrument (I play guitar) or enjoy motorcycles:-)  Thanks - Scott

A release or partial release of lien is the only instrument that will get one released from the note