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Understanding the Assignment of Mortgages: What You Need To Know

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A mortgage is a legally binding agreement between a home buyer and a lender that dictates a borrower's ability to pay off a loan. Every mortgage has an interest rate, a term length, and specific fees attached to it.

Written by Attorney Todd Carney .  Updated November 26, 2021

If you’re like most people who want to purchase a home, you’ll start by going to a bank or other lender to get a mortgage loan. Though you can choose your lender, after the mortgage loan is processed, your mortgage may be transferred to a different mortgage servicer . A transfer is also called an assignment of the mortgage. 

No matter what it’s called, this change of hands may also change who you’re supposed to make your house payments to and how the foreclosure process works if you default on your loan. That’s why if you’re a homeowner, it’s important to know how this process works. This article will provide an in-depth look at what an assignment of a mortgage entails and what impact it can have on homeownership.

Assignment of Mortgage – The Basics

When your original lender transfers your mortgage account and their interests in it to a new lender, that’s called an assignment of mortgage. To do this, your lender must use an assignment of mortgage document. This document ensures the loan is legally transferred to the new owner. It’s common for mortgage lenders to sell the mortgages to other lenders. Most lenders assign the mortgages they originate to other lenders or mortgage buyers.

Home Loan Documents

When you get a loan for a home or real estate, there will usually be two mortgage documents. The first is a mortgage or, less commonly, a deed of trust . The other is a promissory note. The mortgage or deed of trust will state that the mortgaged property provides the security interest for the loan. This basically means that your home is serving as collateral for the loan. It also gives the loan servicer the right to foreclose if you don’t make your monthly payments. The promissory note provides proof of the debt and your promise to pay it.

When a lender assigns your mortgage, your interests as the mortgagor are given to another mortgagee or servicer. Mortgages and deeds of trust are usually recorded in the county recorder’s office. This office also keeps a record of any transfers. When a mortgage is transferred so is the promissory note. The note will be endorsed or signed over to the loan’s new owner. In some situations, a note will be endorsed in blank, which turns it into a bearer instrument. This means whoever holds the note is the presumed owner.

Using MERS To Track Transfers

Banks have collectively established the Mortgage Electronic Registration System , Inc. (MERS), which keeps track of who owns which loans. With MERS, lenders are no longer required to do a separate assignment every time a loan is transferred. That’s because MERS keeps track of the transfers. It’s crucial for MERS to maintain a record of assignments and endorsements because these land records can tell who actually owns the debt and has a legal right to start the foreclosure process.

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Assignment of Mortgage Requirements and Effects

The assignment of mortgage needs to include the following:

The original information regarding the mortgage. Alternatively, it can include the county recorder office’s identification numbers. 

The borrower’s name.

The mortgage loan’s original amount.

The date of the mortgage and when it was recorded.

Usually, there will also need to be a legal description of the real property the mortgage secures, but this is determined by state law and differs by state.

Notice Requirements

The original lender doesn’t need to provide notice to or get permission from the homeowner prior to assigning the mortgage. But the new lender (sometimes called the assignee) has to send the homeowner some form of notice of the loan assignment. The document will typically provide a disclaimer about who the new lender is, the lender’s contact information, and information about how to make your mortgage payment. You should make sure you have this information so you can avoid foreclosure.

Mortgage Terms

When an assignment occurs your loan is transferred, but the initial terms of your mortgage will stay the same. This means you’ll have the same interest rate, overall loan amount, monthly payment, and payment due date. If there are changes or adjustments to the escrow account, the new lender must do them under the terms of the original escrow agreement. The new lender can make some changes if you request them and the lender approves. For example, you may request your new lender to provide more payment methods.

Taxes and Insurance

If you have an escrow account and your mortgage is transferred, you may be worried about making sure your property taxes and homeowners insurance get paid. Though you can always verify the information, the original loan servicer is responsible for giving your local tax authority the new loan servicer’s address for tax billing purposes. The original lender is required to do this after the assignment is recorded. The servicer will also reach out to your property insurance company for this reason.  

If you’ve received notice that your mortgage loan has been assigned, it’s a good idea to reach out to your loan servicer and verify this information. Verifying that all your mortgage information is correct, that you know who to contact if you have questions about your mortgage, and that you know how to make payments to the new servicer will help you avoid being scammed or making payments incorrectly.

Let's Summarize…

In a mortgage assignment, your original lender or servicer transfers your mortgage account to another loan servicer. When this occurs, the original mortgagee or lender’s interests go to the next lender. Even if your mortgage gets transferred or assigned, your mortgage’s terms should remain the same. Your interest rate, loan amount, monthly payment, and payment schedule shouldn’t change. 

Your original lender isn’t required to notify you or get your permission prior to assigning your mortgage. But you should receive correspondence from the new lender after the assignment. It’s important to verify any change in assignment with your original loan servicer before you make your next mortgage payment, so you don’t fall victim to a scam.

Attorney Todd Carney

Attorney Todd Carney is a writer and graduate of Harvard Law School. While in law school, Todd worked in a clinic that helped pro-bono clients file for bankruptcy. Todd also studied several aspects of how the law impacts consumers. Todd has written over 40 articles for sites such... read more about Attorney Todd Carney

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Readdressing, Reassigning, Reappraising

Faqs for ethically handling requests.

You’ve likely already come across this situation during your practice:

You've completed an assignment for a client some time back – maybe a year ago, a month ago, a week ago – and now another party wants your opinion of the value of the same property.

The request may be to readdress the report you prepared for the previous client, or to recertify or reassign it. Other times, the request might be for you to provide an update, or a letter update. Sometimes, the requesting party has no knowledge of the previously prepared report.  How should you move forward?

First, make sure you understand what’s being requested. The requesting party might not know what he or she needs, or might use labels or terms like recertification without understanding what they mean. Once you’re clear on the request, the following Q&As might help you form a response.

Assignment results are your opinions and conclusions developed specific to an assignment. Examples include your final value opinion, your highest and best use conclusion, and your indications of value from any of the approaches used. The Confidentiality Section of the Ethics Rule of USPAP and the Appraisal Institute Code of Professional Ethics provide that an appraiser must not disclose confidential information or assignment results to anyone other than the client and persons specifically authorized by the client; state enforcement agencies and such third parties as may be authorized by due process of law; and duly authorized professional peer review committees. Assignments results may be presented in a written report or in an oral report. Sometimes, if an appraiser is not careful, assignment results are revealed inadvertently. For example, an appraiser who in casual conversation tells another appraiser, another client or anyone else, “I appraised that property for $1,000,000,” is divulging assignment results.

First, keep in mind that not all portions of the report are confidential. For example, in an appraisal report, factual data such as sales comparables are not confidential (unless they were made available by the client and are not available from another source). Descriptions of the location (neighborhood description, region description, etc.) are not confidential. However, since an appraisal report contains assignment results, which are included in the Confidentiality Section of the Ethics Rule of USPAP and the Appraisal Institute Code of Professional Ethics, the authorization process stated above in Q1 applies. This means that a copy of the report that shows confidential information and assignment results can’t be given to, revealed to, or shared with anyone other than the client and persons specifically authorized by the client; state enforcement agencies; duly authorized professional peer review committees; and such third parties as may be authorized by due process of law.

Yes; however, you cannot disclose any confidential information contained in the report prepared in the previous assignment for a different client without that prior client's permission. So you must ask yourself: In completing a new assignment involving the same property for a second client, would I need to disclose information that was considered to be confidential by the first client? If so, you can’t take on the assignment without obtaining prior permission of the first client to release that confidential information. And if the first client will not give permission to use their confidential information, then you can’t accept the new assignment. In many cases, performing a new assignment for a second client would not require the appraiser to divulge any confidential information. Revisit USPAP’s definition of confidential information to be sure. Confidential Information is information that is either:

• Identified by the client as confidential when providing it to an appraiser and that is not available from any other source.
• Classified as confidential or private by applicable law or regulation.

A common misconception is that you must be “released” by the first client to accept the assignment with a subsequent client. The only “release” required is about confidential information. The first client does not need to give permission for you to proceed with another assignment for a second client unless confidential information is at stake. Another common misconception in performing valuation assignments is that if the value opinion in the second assignment is the same as the value opinion in the first assignment, then communicating the value opinion in the second assignment breaches confidentiality with the first client. This is not true. USPAP’s definition of assignment results is “an appraiser’s opinions or conclusions, not limited to value, that were when performing an appraisal assignment, an appraisal review assignment, or a valuation service other than an appraisal or appraisal review.” By definition, the assignment results are different because there are two different assignments – even if the numbers are the same. Note the difference between saying to Client B, “I appraised this same property for Client A for $500,000” and “My value conclusion [in the context of this assignment for you, Client B] is $500,000.” The first statement breaches confidentiality by divulging assignment results. The second statement does not. Another common misconception is that taking a subsequent assignment with another client would be a “conflict of interest.” You can’t have a conflict of interest unless you first have interest. Entering into an appraiser-client relationship to complete an assignment does not mean that you then have an interest with regard to that client or that property. This would be inconsistent with the underlying principle in USPAP that the appraiser’s role is to be independent, impartial, objective, and unbiased. Keep in mind that since 2010, USPAP has required disclosure of any prior service involving the same property within three years prior to the date of engagement. A few key points about this requirement:

• The requirement is to disclose any service involving the property that is the subject of the appraisal (or subject of the appraisal under review, in the case of a review assignment), not just appraisals or appraisal reviews, and not just services provided as an appraiser.
• The relevant time period is three years prior to the date of engagement of the current assignment, not date of value or date of report.
• The disclosure must be made up front before accepting the assignment and again in the certification in the appraisal or review report.
• There is no requirement to disclose for whom the prior service was performed; the appraised value, if any; or exactly when during the three-year period the service was performed.

The certification statement required by USPAP in Standards Rule 2-3 supplies the type and degree of disclosure: “I have performed no (or the specified) services, as an appraiser or in any other capacity, regarding the property that is the subject of this report within the three-year period immediately preceding acceptance of this assignment.” The requirement that was added to USPAP in 2010 clarifies that if the client requests that the appraisal be kept confidential, the appraiser cannot take another assignment involving that property for three years. That’s because the appraiser would not be able to disclose prior services (as required) without violating confidentiality. Use your discretion in deciding whether or not to reveal information about a prior assignment to a subsequent client beyond what’s required. For example, while the identity of the client is not confidential (unless they state that it is), there are situations in which the fact that the first client had the property appraised is, in itself, sensitive information. It’s also worth noting that it’s characteristic of professionals in many other fields to keep the identity of prior clients confidential. One caveat about taking on assignments with residential property owners/borrowers: If you’re contacted by a residential property owner or borrower about providing valuation services for which the intended use is in conjunction with mortgage lending, you must advise the property owner or borrower that the lending institution, or a third party engaged by the lender, needs to engage the appraiser for that type of assignment. This is a requirement under federal law, and the regulatory agencies have been adamant about it. Further, an appraisal report prepared for a client who is a residential property owner or borrower should clearly state that it is not intended for use by a federally insured depository institution in a federally related transaction.

No. It’s improper to readdress a report to another client for three significant reasons.

• Changing the name of the client and then forwarding the “readdressed” report to the second client does not change the first appraiser-client relationship. An appraiser-client relationship, once established, cannot be changed. Typically, the second party wants to be named as “client” because they want the appraiser-client relationship, and all the rights and obligations thereof, to be between them and the appraiser. The only way to accomplish this is for a new appraiser-client relationship to be established. A written engagement letter with the client is a great way to establish this. In short, the only way to be named as “client” in the report is to actually be a client. “Client” is defined in USPAP as “the party or parties (i.e. individual, group, or entity) who engage an appraiser by employment or contract in a specific assignment, whether directly or through an agent”.  
• Changing the name of the client and then forwarding the “readdressed” report to the second client could harm the confidential nature of the appraiser’s relationship with the first client. While this could be avoided by obtaining the first client’s permission to provide the report to the second client, it could still be misleading. In an appraisal assignment, if the appraiser simply changes the name of the client, the appraiser is not following the requirements under Standard 1 of USPAP to identify the client, intended user(s) and intended use with regard to this second client in the proper sequence. According to the definitions of intended use and intended user, both must be identified by the appraiser “at the time of the assignment”, not after the appraisal process is completed and the report is finished.  
• The client is the party to whom the appraiser owes the duty of confidentiality. (Note that the appraiser does not owe a duty of confidentiality to other intended users.) And the key reason for identifying intended users has to do with Standards Rule 2-1(b), which says that the report must contain sufficient information to enable the intended users of the appraisal to understand the report properly. (In the case of a review report, a similar requirement is found in Standards Rule 3-4(b).) Once intended users and intended use are stated, the appraiser is now obligated to ensure the adequacy of the report for that use by those intended users. The identification of intended users (and intended use) must be completed up front before scope of work determination and before the report is issued. To add intended users after the fact, or to change the intended use, is putting the cart before the horse. It simply doesn’t work.

A request to readdress a report should be treated as a request to accept a new assignment involving the same property, as in Q3 above. Once the confidentiality issue is resolved, the next questions to be answered are:

• Who are the intended users?
• What is the intended use?
• What date of value is needed, according to what value definition?
• What assignment conditions (extraordinary assumptions, hypothetical conditions, supplemental standards) apply?
• What is the appropriate scope of work for this new assignment?
• What level of reporting is needed?

There may be little additional work in performing a new assignment for another client. You may be providing virtually the same data and analysis, and even the same value conclusion (though you won’t discover this until you have completed your analysis). However, you must consider all the assignment parameters for this new assignment, which could be different from those of the previous assignment. Further, keep in mind that in providing a report to another client, you are extending your liability to that client. As appraisers, we are not in the business of “selling reports”; we are in the business of “selling” our expertise and our opinions. Every time an addition is made to the list of intended users, our liability grows. A new client means there is a new assignment which necessitates the preparation of a new report . One additional point regarding assignments for lenders: Appraisers should be aware that the appraisal requirements of Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA) allow a regulated lender to use a report that was prepared for another “financial services institution”. This means that Lender B can use a report that was prepared for Lender A, even though Lender A shows as client on the report. Lender B does not have to be named as client, according to the FIRREA requirements. However, usually Lender B will “want their name on the report”. Why? Because Lender B wants the appraiser-client relationship, and all the rights and obligations thereof, to be between them and the appraiser. This means that as far as the appraiser is concerned, there is to be a new appraiser-client relationship – i.e., a new assignment.

Reassigning may mean different things to different parties. Be sure you know what the requesting party is asking. In the context of this discussion, reassigning means signing over your rights and obligations regarding the report to another party. For example, when a report is prepared for and given to Client A, that report is no longer yours to “give”, or assign, to anyone else. An analogy would be if you sold your car to Party A, you couldn’t then sell it to Party B. Client A could assign their interests in their report to Client B, but the appraiser would not be part of this process (and should not be asked to be).

When the request is to recertify, clarification with the client is imperative. “Recertify” tends to be an abused term. Often, it is erroneously used to mean “reassign”, or “readdress”, or “update”. Often it is not clear what clients mean when they use the term “recertify”, and appraisers need to help remedy the confusion. Appraisers certify their reports (i.e., they may include a certification per SR 2-3 in an appraisal report), but this certification has nothing to do with the ownership of, or rights to use, the report. A “recertification of value” is an entirely different concept. As defined in Advisory Opinion 3 of USPAP, a re-certification of value is an assignment in which the appraiser determines whether the conditions of an appraisal have been met. This sort of assignment is not an appraisal at all, because it has nothing to do with developing an opinion of value.

No. The letter would add that party as an intended user after the completion of an assignment, and you cannot do that.

Takeaways for Future Assignments

Requests for valuation services are presented to appraisers in an assortment of ways, and the appraiser’s first tasks are to:

• Ascertain exactly what the party is requesting.
• Determine whether what the party is requesting is appropriate given their intended use.

When a new client enters the picture and a new appraiser-client relationship is formed, a new assignment is involved. This new assignment will require the appraiser to reconsider or reanalyze the process outlined in USPAP’s Standard 1, especially regarding identification of intended use and scope of work. A new report will be provided, appropriately identifying the party who engaged the appraiser the second time as the client. If the client is a lender subject to the requirements of FIRREA, the report will disclose prior assignments involving the same property. In a reappraisal situation, the work involved in developing the value opinion and preparing the report will likely be far less than it was the first time around. The new report may look very similar to the first. The value conclusion might even be the same, but much has changed. The appraiser has considered all parameters for a new assignment to meet the needs of the new client given their intended use, including scope of work, selection of report option, type and definition of value, date of value, etc. The appraiser has agreed to extend his or her liability to this new client. Once a report is provided to a client, it cannot be tampered with. Changing the name of the client (readdressing) is misleading because it falsifies the true relationship between the appraiser and the party who engaged the appraiser in that particular assignment. It’s unethical for clients to request this, and for appraisers to comply with such requests. Note: The Appraisal Standards Board of the Appraisal Foundation has provided additional guidance on these topics. See Advisory Opinion 25, Clarification of the Client in a Federally Related Transaction; Advisory Opinion 26, Readdressing (Transferring) a Report to Another Party; and Advisory Opinion 27, Appraising the Same Property for a New Client. Also see FAQ #120 which deals with “reliance letters.” These Advisory Opinions and FAQ are published with the Uniform Standards of Professional Appraisal Practice (USPAP) . February 2014

What Is Assignment of Mortgage: What You Need to Know

We will explore the idea of mortgage assignment in this thorough guide, going over its definition, steps involved, potential consequences, and more. So read on to learn more about this important facet of the real estate market, whether you’re a homeowner, a prospective buyer, or just inquisitive about mortgages.

What is Assignment of Mortgage?

The assignment of mortgage, often simply referred to as mortgage assignment , is a legal process that involves the transfer of a mortgage loan from one party to another. This transfer typically occurs between mortgage lenders or financial institutions and is a common practice within the mortgage industry.

The Key Parties Involved

• Assignor: The person transferring the mortgage is known as the assignor. The initial lender or financial organization that gave the borrower the mortgage loan is often the assignor.
• Assignee: The assignee is the party receiving the mortgage assignment. This could be another lender or financial institution that is buying the mortgage, often as part of a financial transaction.
• Borrower: The borrower is the individual or entity that initially took out the mortgage loan to finance the purchase of a property.

Why is Assignment of Mortgage Necessary?

Assignment of mortgage occurs for various reasons, and it serves specific purposes for all parties involved.

1. Loan Portfolio Management

Mortgage assignment is a common practice used by lenders to better manage their loan portfolios. Lenders might raise funds to offer more loans or issue new mortgages by selling or transferring mortgage loans to other financial organizations. This procedure aids in keeping their portfolios risk-balanced and liquid.

2. Risk Mitigation

Lenders may also assign mortgages to mitigate risk. When they transfer a mortgage to another entity, they are essentially transferring the associated risk as well. This can be a strategic move to reduce their exposure to potential defaults or financial instability.

3. Secondary Mortgage Market

The secondary mortgage market plays a significant role in the assignment of mortgages. Many mortgages are bundled together into mortgage-backed securities (MBS) and sold to investors. Assignment of mortgages allows lenders to participate in this market, which provides additional funding for new mortgage loans.

The Assignment of Mortgage Process

The process of assigning a mortgage, or deciding to sell your mortgage , involves several steps and legal requirements. Here’s a breakdown of the typical process:

1. Agreement between Parties

The assignor (original lender) and assignee (new lender or investor) must enter into a formal agreement outlining the terms and conditions of the new mortgage assignment. This agreement includes details such as the transfer price, terms of the loan, and any specific warranties or representations.

2. Notice to the Borrower

Once the agreement is in place, the borrower is typically notified of the assignment. This notice informs them that the servicing of their mortgage, including collecting monthly mortgage payments, will now be handled by the assignee. The borrower is advised to send future payments to the assignee.

3. Recordation

In many jurisdictions, mortgage assignments must be recorded with the appropriate government office, such as the county recorder’s office. This recordation provides public notice of the transfer and ensures that the assignee has a legal claim on the property.

4. Continuation of Monthly Mortgage Payments

For the borrower, the most noticeable change is the address where monthly payments are sent. Instead of sending payment to the original lender, the borrower will send them to the assignee. It is crucial for borrowers to keep records of these changes to avoid any confusion or missed payments.

Implications of Mortgage Assignment for Borrowers

While the assignment of mortgage primarily involves lenders and investors, it can have implications for borrowers as well. Here are some important considerations for borrowers:

1. No Change in Loan Terms

Borrowers should be aware that the assignment of mortgage does not change the terms of their loan. The interest rate, monthly payments, and other loan terms remain the same. The only change is the entity to which payments are made.

2. Proper Record-Keeping

Borrowers must maintain accurate records of their mortgage payments and correspondence related to the assignment. This helps ensure that payments are correctly credited and can be vital in case of any disputes or issues.

3. Communication with the New Lender

If borrowers have questions or concerns about their mortgage after the assignment, they should reach out to the new lender or servicer. Open and clear communication can help address any issues that may arise during the transition.

4. Property Taxes and Insurance

Borrowers are still responsible for property taxes and homeowner’s insurance, even after the assignment of mortgage. These payments are typically not affected by the transfer of the loan.

The Role of Mortgage Servicers

Mortgage servicers play a crucial role in the assignment of mortgage process. This section will explore the responsibilities of mortgage servicers, their relationship with borrowers, and how they manage mortgage loans on behalf of investors or lenders.

Legal Requirements and Regulations

Assignment is subject to various legal mortgage requirements and regulations that vary by jurisdiction. Discussing these legal aspects will help readers understand the legal framework governing the assignment of mortgages in their region and how it impacts the process.

Impact on Credit and Credit Reporting

The assignment of mortgage can have implications for borrowers’ credit reports and scores. Explore how mortgage assignment can affect credit histories, reporting by credit bureaus, and what borrowers can do to protect their credit during and after the assignment.

Assignment of Mortgage vs. Assumption of Mortgage

Differentiating between assignment of mortgage and assumption of mortgage is important. This section will explain the key differences, where one party takes over the mortgage and liability, while the other party merely transfers the loan to a new lender.

Impact on Property Taxes and Insurance

Taxes and insurance are essential components of homeownership. Explain how the assignment of mortgage may affect property tax payments and the homeowner’s insurance policy, as these are often escrowed into the monthly mortgage payment.

Potential Challenges and Disputes

Discuss common challenges or disputes that can arise during or after the assignment of mortgage, such as miscommunication, incorrect payment processing, or disputes over ownership rights. Offer advice on how to handle and resolve these issues.

Foreclosure and Default Scenarios

In the unfortunate event of mortgage default, understanding how the assignment of mortgage affects foreclosure proceedings is crucial. Explain how the assignee handles foreclosures and what options are available to borrowers facing financial difficulties.

Future Trends and Innovations

Explore emerging trends and innovations in the mortgage industry related to the assignment of mortgages. This could include the use of blockchain technology, digital mortgages, or other advancements that may impact the process.

In the complex world of real estate and mortgage financing , the assignment of mortgage plays a pivotal role in the movement of funds and management of risk. It allows lenders to efficiently manage their portfolios, mitigate risk, and participate in the secondary mortgage market. For borrowers, understanding the process and implications of mortgage assignment is essential to ensure the smooth continuation of their monthly mortgage payments.

As you navigate the world of homeownership or consider entering it, remember that the assignment of mortgage is a routine occurrence designed to benefit all parties involved. By staying informed and maintaining open communication with your lender or servicer, you can ensure that your mortgage loan remains a manageable and secure financial commitment.

In summary, purchase of mortgage is a vital mechanism within the mortgage industry that facilitates the transfer of mortgage loans from one party to another. This process helps lenders manage their portfolios, mitigate risk, and participate in the secondary mortgage market.

For borrowers, it means a change in the entity collecting their monthly mortgage payments but typically does not alter the terms of the original loan. Keeping accurate records and staying informed about the transition are crucial steps to ensure a smooth experience for homeowners. So, whether you’re a homeowner, lender, or investor, understanding assignment of mortgage is key to navigating the real estate landscape effectively.

This article is for informational purposes only and does not constitute legal, tax, or accounting advice.

Written by Alan Noblitt

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Daniel Moore

Demystifying mortgage assignment: what it means for borrowers and lenders, demystifying mortgage assignment: what it means for borrowers and lenders. explore the process, benefits, and risks in our comprehensive guide..

A mortgage assignment is a financial process in which an existing mortgage is transferred from the current holder to another party. It can occur for various reasons, such as a lender selling the mortgage to another bank or financial institution.

Understanding mortgage assignment is essential for both borrowers and lenders, as it impacts the terms and the handling of the loan.

This brief introduction lays the groundwork for a deeper understanding of what mortgage assignment entails and its significance in the mortgage industry.

Understanding Mortgage Assignment

Mortgage assignment is when the original lender transfers the mortgage to another lender or financial institution. This can occur for various reasons, including the original lender wanting to liquidate assets or reduce risk exposure.

Steps in the Mortgage Assignment Process

Discover the critical steps in the mortgage assignment process, from initiation to completion, ensuring a smooth transfer between lenders and maintaining clarity for borrowers.

The process begins when the original lender assigns the mortgage to another party. This decision can be driven by a strategic need to manage financial resources more effectively.

The original and the new lender agree on the terms of the assignment. This agreement includes details about the transfer of rights and the responsibilities each party will hold.

Notification

The borrower is informed about the mortgage assignment. Borrowers must receive clear and concise information about what this change means for their mortgage terms.

Legal Documentation

The transfer of a mortgage is formalized through legal documents. These documents are critical as they protect the rights of all parties involved, ensuring the assignment adheres to financial regulations.

The mortgage assignment is complete once all parties have signed the legal documents and all conditions are met. The new lender now holds the rights and duties originally held by the original lender.

Critical Points for Borrowers and Lenders

Borrowers should pay attention to any changes in the terms of their mortgage, and both lenders need to handle the legal aspects carefully to prevent future disputes. Proper communication between all parties can smooth the transition and maintain trust.

Mortgage assignment doesn't have to be a complicated affair. Clear communication and adherence to legal procedures can be a straightforward process beneficial to all involved.

Advantages of Mortgage Assignment for Lenders and Borrowers

Mortgage assignment offers significant benefits for both lenders and borrowers, each finding unique advantages in the process. Understanding these benefits can help parties make informed decisions about their mortgage management strategies.

For Lenders

Mortgage assignment allows lenders to free up capital and reduce risk by transferring the mortgage to another party, optimizing their financial assets efficiently.

Freeing Up Capital

One of the primary advantages for lenders in the process of mortgage assignment is the ability to free up capital.

By transferring the rights of a mortgage to another financial institution or entity, the original lender can redeploy resources into new lending opportunities or other investments. This can improve the lender's liquidity and enhance its financial flexibility.

Reducing Risk

Mortgage assignment also allows lenders to reduce their risk exposure. When a mortgage is transferred, the associated risks, such as the possibility of default, are also transferred to the acquiring party.

This shift can help the original lender manage its risk portfolio more effectively, allowing for a more stable financial position.

For Borrowers

For borrowers, mortgage assignment can lead to better loan terms and ensure the continuity of their mortgage agreement with a new lender.

Potential for Better Terms

For borrowers, one of the critical advantages of mortgage assignment is the potential to secure better terms from a new lender. This new lender may offer lower interest rates, better repayment conditions, or more favorable terms to attract and maintain clients.

As a result, borrowers can enjoy cost savings and a loan structure more aligned with their current financial situation.

Continuity of Agreement

Despite the change in the lender, mortgage assignment ensures that the continuity of the mortgage agreement is maintained. This means that borrowers do not have to renegotiate the fundamental terms of their mortgage.

Their payment schedule, interest rate, and loan duration remain the same, providing them stability and predictability in their financial planning.

Potential Risks and Disadvantages of Mortgage Assignment

Mortgage assignment can be a valuable tool for managing financial portfolios for borrowers and lenders.

However, it comes with certain risks and disadvantages that must be considered. This section outlines some challenges, helping both parties make informed decisions.

In the mortgage assignment process, lenders face significant challenges, including legal complexities and managing borrower expectations, which require careful navigation to avoid disputes and dissatisfaction.

Legal Complexities and Potential Disputes

One of the primary concerns for lenders in the process of mortgage assignment is the array of legal complexities that can arise.

Transferring a mortgage from one lender to another involves meticulous documentation and strict adherence to legal standards, which, if not properly managed, can lead to disputes with borrowers. These disputes may revolve around misunderstandings about the mortgage terms or the new lender's responsibilities.

Challenges in Managing Borrower Expectations

Lenders may also face challenges in managing borrower expectations during a mortgage assignment. Borrowers might not fully understand the implications of their mortgage being assigned to another lender, which can lead to dissatisfaction or conflict.

Lenders must clearly and effectively communicate what a mortgage assignment means and how it will affect the borrower's loan terms and conditions.

This section examines borrowers' challenges during mortgage assignments, focusing on potential changes regarding the risks of engaging with a new lending institution.

Possible Changes in Mortgage Terms

For borrowers, one of the significant risks associated with mortgage assignment is the potential for changes in the terms of their mortgage.

When a new lender takes over a mortgage, they might adjust the interest rates, payment schedules, or other terms to align with their lending policies. Such changes can sometimes be unfavorable to borrowers, increasing their financial burden.

Risks of Dealing with a New Lending Institution

Additionally, borrowers face risks related to the reputation and stability of the new lending institution. If the new lender has less favorable customer service or a weaker financial position, it could impact the borrower's experience and mortgage security.

Borrowers must thoroughly research the new lender and ensure they are comfortable with their practices and stability.

Considering Mortgage Assignment? Fetch Your Rate Today

As we conclude our discussion on mortgage assignment, it's clear that borrowers and lenders can benefit from this process when managed effectively.

Whether you're a lender looking to reorganize your portfolio or a borrower facing a change in the lender, understanding the terms and conditions of mortgage assignment is critical.

If you're contemplating a mortgage assignment, now is the time to contact Fetch arate and see how this option might work.

Home > Amerinote Xchange Blog > Market Trends > Understanding Mortgage Assignment: How It Works and What You Need to Know

Understanding Mortgage Assignment: How It Works and What You Need to Know

Jennifer Park Published: July 15, 2024 | Updated: July 10, 2024

When a homebuyer gets a mortgage, they agree to pay back the money they borrowed from a lender, usually a bank. These payments are usually made over a period of many years with interest, which is how the lender makes money.  If the borrower doesn’t make payments, the mortgage gives the lender the ability to foreclose on the property to recoup their investment. 

Sometimes, though, the lender decides they don’t want to wait for those years of payments. Instead, they might choose to sell the mortgage to another company. This transfer is called a mortgage assignment, or in some states, an assignment of deed of trust. Here’s everything you should know about how mortgage assignments work.

What is an Assignment of Mortgage?

An assignment of mortgage, or assignment of deed of trust, is a process where the original lender transfers their interest in a mortgage to another party. This could be another bank, a special company that handles mortgages, or an investor interested in buying debts. The original lender sells the right to collect payments from the homebuyer to someone else. This is done with legal agreements to ensure everything is fair and follows the law.

This process is important for lenders because it allows them to get back much of the money they lent without waiting for the 20 or 30 years it might take the borrower to pay it all back. For the new owner of the mortgage, it’s a chance to invest in a steady flow of income.

Some mortgage lenders are homeowners who became mortgage note holders when they sold their house. If the prospective buyer is not able to secure a loan from a bank, these homeowners might choose to offer seller financing . In this arrangement, the seller acts as the lender, agreeing to sign over the house in return for receiving monthly payments until the value of the loan is paid off.

However, if circumstances change and the homeowner wants to receive a lump sum payment or no longer wants the responsibility of managing the loan, they might consider selling the mortgage note to an investor or a specialized company. This sale is facilitated through the mortgage assignment process, transferring all rights and responsibilities to the new owner.

The Mortgage Assignment Process

Let’s walk through what happens during a mortgage assignment:

• Decision to Sell the Mortgage: The lender decides they would like to sell the mortgage. This could be because they no longer want to bear the risk of the loan, or would like to receive a lump sum payment.
• Finding a Buyer: The lender looks for a party interested in buying your mortgage. This buyer could be another bank, a company that specializes in buying and managing mortgages, or even a group of investors. The important thing is that they have the money to buy the mortgage and are willing to take on the responsibility of collecting payments.
• Handling the Legal Paperwork: Once a buyer is found, there’s a lot of paperwork to handle. The most important piece is the “assignment of mortgage document or the “assignment of deed of trust”, a document that officially transfers the ownership of the mortgage from the old lender to the new one. This document must be signed and usually notarized, which means an official witness confirms that all parties signed willingly and correctly. There must also be a transfer of the promissory note, through a process known as mortgage endorsement .
• Notifying the Homeowner: After the mortgage is officially transferred to the new owner, the homeowner will be notified. This notification lets them know who the new owner of their mortgage is, their contact information and where to send their future mortgage payments. 

Deed of Trust vs. Mortgage

In some states, instead of a mortgage note, the lender may have something called a deed of trust. This can also be transferred to a buyer in the same way. A deed of trust and a mortgage both serve the same purpose — to secure a loan on a property. There are  some key differences in how they operate .

Deed of Trust

Involves Three Parties: A deed of trust involves three parties: the borrower, the lender and a trustee. The trustee holds the legal title to the property until the loan is fully paid off.

Non-Judicial Foreclosure: In most cases, a deed of trust allows for non-judicial foreclosure, meaning the trustee can sell the property without court involvement if the borrower defaults on the loan.

Involves Two Parties: A traditional mortgage involves just two parties: the borrower and the lender. The legal title remains with the borrower, and the lender has a lien on the property.

Judicial Foreclosure : Foreclosure under a mortgage typically requires going through the court, making it a longer and possibly more complicated process than with a deed of trust.

Legal and Regulatory Considerations

When a mortgage is assigned from one lender to another, several legal and regulatory considerations must be addressed to ensure the process is handled correctly. Each state has its own laws that affect how mortgages can be transferred, which is why it can be important to know your local rules before selling your mortgage note.

State Laws on Mortgage Assignment

State laws dictate how a mortgage assignment must be recorded and what documentation is required. For example, some states require that the assignment of the mortgage document be filed with the county where the property is located. This helps maintain a clear and public record of who owns the mortgage. Additionally, these laws ensure that the homeowner is protected and that the transfer of mortgage ownership is transparent.

Judicial vs. Non-Judicial Foreclosure Processes

Depending on the state, the foreclosure process can vary significantly. In judicial foreclosure states, the lender must go through the court system to foreclose on a home. This process can be lengthy and requires filing a lawsuit and getting a court judgment. In non-judicial foreclosure states, lenders can foreclose without court involvement if the mortgage agreement includes a power of sale clause. This clause allows the lender to sell the property to pay off the mortgage if the homeowner defaults. 

Compliance Requirements

During a mortgage assignment, all parties must comply with federal and state regulations that protect homeowners. For instance, the  Real Estate Settlement Procedures Act (RESPA) requires that borrowers be notified of any change in the ownership of their mortgage. This notification must be sent within 15 days after the mortgage has been sold or assigned. Ensuring compliance helps maintain trust and avoids legal complications.

Why Sell a Mortgage?

You might wonder why a lender would want to sell a mortgage to a mortgage note buyer instead of just waiting to collect all the payments. There are several reasons why selling the mortgage can be beneficial for the lender:

• Managing Financial Resources: By selling a mortgage, lenders can get a large amount of money upfront instead of waiting for monthly payments. This immediate influx of cash can help them invest in other areas, offer more loans, or strengthen their financial footing.
• Risk Management: Holding onto a mortgage comes with risks, especially if the homeowner has trouble making payments. By selling the mortgage, the original lender transfers this risk to the buyer of the mortgage. This can be a strategic move to manage the lender’s overall risk exposure.
• Investment Strategy: Lenders might sell mortgages as part of their investment strategy. Selling mortgages can help them diversify their investments and adjust their portfolios according to market conditions or their financial goals.

Choosing the Right Buyer For A Mortgage Note

For lenders, finding the right mortgage or deed of trust buyer is an important part of the assignment process. Here are some criteria to consider when selecting a mortgage note buyer :

• Reputation and Reliability: The reputation of the buyer is vital. Lenders should look for buyers who have a solid track record of fair dealings and reliability. A good indicator are reviews from actual buyers and a brand presence. This ensures that the mortgage will be managed properly after the assignment.
• Transparency: Transparency during the mortgage assignment process is essential for trust. Buyers who provide clear information about the terms of the purchase and who maintain open communication are preferable.
• Competitive Pricing: Finally, the price offered for the mortgage note is a critical factor. Lenders should seek buyers who offer competitive pricing, which reflects the value of the mortgage and the income it generates.

Jennifer Park

Jennifer is an expert writer who focuses primarily on writing finance, investing, and real estate topics. She has been working as a writer since 2013. See full bio.

Molly Corson

Molly Corson is the Co-Founder and Marketing Director at Amerinote Xchange. Molly's diversified background and experience lies in the areas marketing ad-tech, team-building, operations-management, sales and strategic relations management. Molly has a BA degree from Temple University. See full bio.

Financially Reviewed By

Abby Shemesh

Abby is the co-founder and Chief Acquisitions Officer at Amerinote Xchange. He has been operating within the mortgage market for over a decade. Abby was featured on industry publications like Yahoo! Finance, MSN Money, Realtor.com, and GOBankingRates.com. See full bio.

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Yahoo Finance

Understanding how assignments of mortgage work.

The bank or other mortgage lender that provides a borrower with the funds to purchase a home often later transfers or assigns its interest in the mortgage to another firm. When this happens, the borrower will start sending monthly mortgage payments to the new owner of the mortgage instead of the original lender. Some other things, such as the available modes of payment, many also change.  However, the general terms of the mortgage, such as the interest rate and payment amounts, will stay the same.

If you need help with a mortgage, consider finding a financial advisor to work with .

Mortgage Assignment Basics

Mortgages are assigned using a document called an assignment of mortgage. This legally transfers the original lender’s interest in the loan to the new company. After doing this, the original lender will no longer receive the payments of principal and interest. However, by assigning the loan the mortgage company will free up capital. This allows the original lender to make more loans and generate additional origination and other fees.

At closing, borrowers sign a document granting the original lender the right to assign the mortgage elsewhere. This means the original lender doesn’t have to ask for permission to assign the mortgage but can do so whenever it wants to. Often this occurs within a few months after the closing, but it can happen at any time during the term of a mortgage. Once a loan has been assigned, it can be assigned again.

The assignment of mortgage document uses several pieces of information to accurately identify the specific mortgage that is being transferred. These generally include:

The name of the borrower

The date of the mortgage

The jurisdiction where it was recorded

The amount of money that was originally loaned

A legal description of the home or other property used as collateral to secure the loan.

Although a lender doesn’t need to request the borrower’s permission before assigning a mortgage, the lender does have to notify the borrower after the mortgage has been assigned. This notice will generally provide the new lender’s name, contact information and mailing address or other information need to make payments.

Effects of Mortgage Assignment

When a mortgage is assigned, the original terms of the mortgage remain unchanged. The monthly principal and interest, interest rate and total number of payments required to pay the loan off will be the same as on the mortgage when it was signed at closing.

A company assigned a mortgage may have different methods of accepting monthly payments, such as online payments, paper checks or money orders. A borrower who wants more payment methods may be able to get a new mortgage holder to provide them upon request.

Some things may change, however. For instance, the new owner of the mortgage may have a different method of handling escrow payments that are used to pay property taxes and the premiums for hazard insurance. The law requires mortgage companies to charge no more than one-twelfth the annual cost of property taxes and insurance each month. However, they can also require borrowers to maintain a cushion of up to one-sixth the annual total required to pay taxes and insurance. If a new mortgage company has a different policy on this cushion, it could change the total monthly payment.

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The borrower also does not need to notify the local taxing authorities or the hazard insurance provider about the assignment. The new holder of the mortgage is required to handle these notifications.

Borrowers should check the information about where payments are supposed to go. This need to be accurate so payments will be directed correctly to the holder of the mortgage and the borrower will receive credit for them.

Another important matter that may change when a loan is assigned is the procedure the mortgage company will follow in the event of default. Borrowers should make themselves familiar with the notification methods used by the new mortgage to let them know if payments are not being received and foreclosure is in the offing.

The Bottom Line

Home mortgages are often assigned by their original lenders to other companies. Assignment usually doesn’t change much for the borrower, except that the payments will go to a different address. The original loan amount, interest payment, term and monthly principal and interest part of the payment will stay the same. Assigning mortgages frees up money for the lenders to make more loans. Borrowers don’t have to be told a mortgage will be assigned, since they agree to this at closing. However, they must be notified after an assignment and told how to contact the new mortgage holder.

Mortgage Tips

A financial advisor can help you evaluate home buying and other important financial moves. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now .

Borrowers can find out whether and where their mortgage has been assigned through the Mortgage Electronic Registration Systems (MERS). This is an organization created by mortgage companies to track mortgage assignments. Borrowers can use a free online service provided by MERS to find out who owns their mortgage.

Mortgage rates are more volatile than they have been in a long time. Check out SmartAsset’s mortgage rates table to get a better idea of what the market looks like right now.

Photo credit: ©iStock.com/ArLawKa AungTun, ©iStock.com/ridvan_celik, ©iStock.com/damircudic

The post Understanding How Assignments of Mortgage Work appeared first on SmartAsset Blog .

FAQ #6: Can An Appraisal Be Readdressed To A New Client?

• February 9, 2023

Ryan Bays, SRA, AI-RRS

Realtors, remember the last time your buyer switched lenders at the last minute?  I bet you were hoping you could just use the old appraisal, right?  Lenders, how many times have you reached out to the appraiser and asked them to change the name on their appraisal from the original lender to the new?

This FAQ impacts lenders, homeowners, and Realtors, and there’s much confusion from all parties, so I hope to give some clarity on the question:

Can an appraisal be readdressed to a new client?

To answer this question, let’s consider the following example:

The home at 1416 Maple Drive was for sale.  Mr. & Mrs. Smith wanted to buy the home, and began working with their lender, All-American Mortgage Company.  All-American Mortgage hired an appraiser to complete an appraisal report for the purchase of the home, and the appraisal was completed and delivered to the mortgage company a couple of weeks later.  Just a few days after, Mr. & Mrs. Smith decided they wanted to switch lenders.  Eagle Mortgage was offering a ¼ point lower on the interest rate, and $1,000 less in closing costs!  What a deal!  So they went through the process again with Eagle Mortgage and the processor at the new mortgage company called up the original appraiser.

The phone call went something like this, “Hi Mr. Appraiser, I’m with Eagle Mortgage Company, and we’re the new lender for Mr. & Mrs. Smith, who are purchasing the home at 1416 Maple Drive.  You just did an appraisal on it a few weeks ago for another lender, and we just need you to change the name on the appraisal report and email it right back to us.  Thanks!”

Now, much to the surprise of lenders, homeowners, and Realtors alike, the answer to our FAQ is “no”.  And I’ll tell you why next.

Per USPAP, appraisals cannot be readdressed to another party.

The Uniform Standard of Professional Appraisal Practice (USPAP) states that once a report has been prepared for a named client(s) and any other identified intended users and for an identified intended use, the appraiser cannot “readdress” (transfer) the report to another party.

So if an appraiser can’t readdress a report, how can we still meet our client’s needs?  USPAP says the answer is with a new assignment.  As an appraiser, I can begin a new relationship with Eagle Mortgage Company and appraise the property for them.  With a new report as part of a new assignment, their name is on the report, and everything is just the way they need it.

It’s important to keep in mind that I have to be careful in my new appraisal not to disclose any information previously deemed confidential, unless I have the first client’s permission.

“So are you saying you have to complete an entirely new, full appraisal with another inspection”?  This is usually the first question asked after explaining this process.

Again, the answer is “no.”  Or at least “not always.”

According to an article by The Appraisal Institute, “In many such cases there may be little additional work in performing a new assignment for another client. Perhaps when all is said and done you will be providing virtually the same data and analysis, and even the same value conclusion…”

So what’s an appraiser…and a lender…and a Realtor…and a homeowner to do?

Let’s try & land this plane, shall we?  If you’re a lender, what are your options? How can you get this deal closed for your buyer or homeowner?  It’s going to come down to a conversation between you and the appraiser.  The two of you need to talk with each other and determine who the client is, the intended user, intended use, date of value, scope of work, etc.  It may be that the home was just appraised two weeks ago.  The new lender is fine with the comparable sales and analyses, and everything else in the original report.  And, they are also fine with the date of value from two weeks ago.  They don’t need a new inspection, so they simply work out an agreement for a new assignment that does not involve a re-inspection of the property.

The cost here is usually up to the appraiser, but likely will be minimal as long as there is only minimal work to be done.  In our experience homeowners who change lenders do so very soon after the original appraisal was completed.  Therefore, it’s not likely that much has changed in the market or with the property.  And most of our clients are 100% ok with us simply working up a new assignment, relying on the original date of value, and naming them as the client.  We do charge a fee for this, as we’re still doing all of our analyses we would usually do.  But this helps our clients get their name on the report, and gets the homeowners to the closing table with little additional money out of their pockets.

If the new lender does want the appraiser to re-visit the property, the fee will be higher, but usually we try to give a little discount, especially if we had just been to the property.  Again, communication between the lender and appraiser is key.

If you have a question you’d like us to feature, email me at [email protected]

For more information on this and other topics related to the appraisal process, check out our Guide To Appraisals set of E-Books at https://riverfrontappraisals.com/guides/ .

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Riverfront Appraisals has been providing comprehensive valuations of residential properties to Western Kentucky and Southwestern Indiana since 2008.

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Assigning Loan Documents: Practical Reminders

The recent Supreme Court of Delaware case  J.M. Shrewsbury v. The Bank of New York Mellon ,   CA No. N15L-03-108 (Del. 2017), provides a reminder of the importance of clearly documenting the assignment of loan documents. The Court’s holding requires that prior to the assignee of a mortgage loan filing suit on the note or mortgage, the assignee must have received both an allonge/assignment of the note and an assignment of the mortgage. The case is a reminder of the importance of maintaining a precise chain of title when assigning loan documents. The facts of the case as described below demonstrate the need to make sure that you “don’t leave the note behind.”

In 2007, J.M. Shrewsbury and Kathy Shrewsbury signed a promissory note in favor of Countrywide Home Loans, Inc. Concurrently, the Shrewburys were granted a mortgage to secure their obligations under the note, which mortgage encumbered real property in Delaware. In 2011, the mortgage was assigned to The Bank of New York Mellon (Bank). In 2013, the Shrewsburys requested and received a copy of the original note, which contained no indication that the note had been assigned. Neither party disputed the fact that the Shrewsburys stopped making mortgage payments in 2010.

The Bank commenced a mortgage foreclosure action in 2015 in the Superior Court of the State of Delaware,  Bank of N.Y. Mellon v. Shrewsbury , C.A. No. N15L-03-108 CLS (Del. Super. Ct. Feb. 17, 2016). In holding in favor of the Bank, the Superior Court found that the Bank need only show that it had a valid assignment of the mortgage to enforce its rights. The Shrewsburys appealed the decision to the Court.

In reversing and remanding the decision of the Superior Court, the Court followed its reasoning in Iowa-Wisconsin Bridge Co. v. Phoenix Finance Corporation, Iowa-Wisconsin Bridge Co. v. Phoenix Finance Corporation , 25 A.2d 383, 389 (Del. 1942), stating that a debt is an essential requisite to a mortgage. While persuaded by wide-ranging case law and other respected authorities, the Court’s decision relied most heavily on the United States Supreme Court case  Carpenter v. Longan,  83 U.S. 271 (1872), holding that the “note and mortgage are inseparable; the former as essential, the latter as an incident. An assignment of the note carries the mortgage with it, while an assignment of the latter alone is a nullity.”

Practical Reminders

While this case involved a residential transaction, important considerations can be applied in commercial mortgage transactions whether in connection with construction, bridge or permanent mortgage financing, a loan sale, a transfer of a loan to an affiliate of the original lender, or other assignment of the loan.

Practical reminders include:

• Make sure that the chain of title is precise when assigning the mortgage, the note and other collateral documents such as assignments of leases and rents, guarantees and UCC’s. Don’t leave the note “behind.”
• Assign and endorse the note by allonge so that the chain of title is complete. Firmly affix the allonge(s) to the underlying note.
• Keep good records of all documentation, including recorded ( i.e. the mortgage an assignment of mortgage) and unrecorded documents. Retain originals in a safe place (such as under the control of a custodian or servicer or in a vault) and copies of all loan documents including assignment documents.
• When the loan is assigned, always deliver the original note along with the original allonge.

Members of our Real Estate and Finance Groups regularly handle commercial real estate financing and sales transactions throughout the country. If you have questions or would like further information, please contact Tim Davis ( davist@whiteandwilliams.com ; 215.864.6829) or Pat Haggerty ( haggertyp@whiteandwilliams.com ; 215.864.6811).

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What is an assignment of mortgage and how is it processed?

An Assignment of Mortgage is a process by which you can refinance your mortgage while saving money on mortgage taxes (this process is also known as a CEMA). We do allow assignments on existing credit union mortgages, however, we do not allow assignments on home equity products. The details, including associated fees, can be found below.

If you have a mortgage with another lender and are looking to refinance with the Credit Union under an assignment, you must first find out from the current lender if they allow assignments, any documentation they require, and all fees associated with the assignment. Once you are ready to move forward, you can apply with us . 　

Assignment of Mortgage Requirements

In order to process an Assignment of Mortgage, we will need the following documentation from you and/or your new lender:

• A commitment letter listing their address as they require it to read on the Assignment of Mortgage document.
• A copy of the mortgage schedule from the title search reflecting Jovia Financial Credit Union F/K/A Nassau Educators Federal Credit Union as lienholder on the subject property.
• A signed, authorization from all borrowers on the existing Jovia mortgage.

All documents can be e-mailed to the credit union at [email protected] or faxed to

(516) 714-2831, Attn: Loan Servicing.

We will begin processing your request once all documentation has been received. Please allow 7-10 business days for completion.

____________________________________________________________________________

All fees are due at closing.

*The closing attendance fee listed above is based on a closing in Nassau County. The fee may vary for closings outside of Nassau County.

The Credit Union’s attorney will bring the original Assignment of Mortgage to the closing.

To schedule attendance for your closing, please contact our attorneys, O’Reilly, Marsh & Corteselli P.C. directly at 516-741-1818.

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New Appraisal Assignment?

by IDFPR Board · Published December 22, 2011 · Updated July 28, 2024

A week later the lender wants the appraiser to amend the appraisal to reflect the renegotiated contract that pegs the property at $180,000.

As an aside, the lender would not provide the new contract.

First, is the lender’s request automatically a new appraisal assignment?

AO-3 offers useful guidance:

Regardless of the nomenclature used, when a client seeks a more current value or analysis of a property that was the subject of a prior assignment, this is not an extension of that prior assignment that was already completed – it is simply a new appraisal assignment .

Let’s take this one step further by examining AO-111 :

Question: I recently had a client contact me and ask me to change the effective date of my appraisal, to make it one week after the effective date shown in my report. Does USPAP permit me to simply change the effective date without taking additional steps?

Response: No. As indicated in the SCOPE OF WORK RULE, the effective date of the appraiser’s opinions and conclusions is an assignment element.

If the client is asking for an appraisal with a different effective date, the appraiser needs to determine the appropriate scope of work to produce credible assignment results for this request. Such a request would need to be considered a new appraisal assignment , but that does not necessarily require starting from scratch. As with all new assignments, the appraiser must decide the appropriate scope of work to produce credible assignment results. This would include a decision as to whether or not it was necessary to perform another inspection, as well as the extent of any additional research and analyses that might be required. The scope of work for the new assignment can be different from the scope of work completed in the earlier assignment. As with any assignment, the appraiser might be able to use information and analyses developed for a previous assignment.

AO-112 follows up with:

Question: I recently completed an appraisal for mortgage financing purposes in a purchase transaction and delivered the report to my client. My opinion of value did not support the pending sale price. As a result, the purchase transaction was not consummated. However, one week later the buyer and seller entered into a new purchase agreement where the sale price coincided with my appraised value. My client asked if I can provide a revised report that includes the analysis of the newly agreed-upon sale price. To provide a revised appraisal report, must I consider the client’s request as a new appraisal assignment?

Response: If the client does not require a more current effective date, USPAP would not mandate treating the request as a new assignment. However, if the client does require a more current effective date, the request must be treated as a new assignment.

In this example, regardless of whether the effective date is changed, the date of the report would have to change to accurately reflect the appraiser’s consideration of the newly obtained agreement of sale. Because the new purchase agreement was obtained after the date of the first report, the revised report would need to have a date of report that is the same as or later than the date the new purchase agreement was obtained by the appraiser.

I n addition, the new report would also need to reflect the appraiser’s analysis of the prior agreement of sale. In the development of an appraisal, an appraiser is required under Standards Rule 1-1(b), to not commit a substantial error of omission or commission that significantly affects an appraisal. Since information about the prior agreement of sale is known by the appraiser and that information is relevant to the appraisal problem, it must be considered.

Even if the new contract isn’t made available you can complete the assignment so long as you detail what steps were taken to obtain it.

Now that you understand that it’s a new assignment, should the appraiser charge the lender for a whole new assignment?

This is purely a business decision. New assignments do not necessarily translate into new invoices. But, they aren’t baked-in freebies either.

As a business person this is totally the appraiser’s call.

~ Source Illinois Appraiser Newsletters December 2011 issue

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IDFPR Board

Provided as a service to licensed and registered Illinois appraisal professionals as well as Illinois course providers and users of appraisals. Illinois Appraiser Newsletters promote a greater understanding of USPAP, the Act, and the Administrative Rules of the State of Illinois. promote a greater understanding of USPAP, the Act, and the Administrative Rules of the State of Illinois.

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Mortgage Assignment Definition

It is important for real estate students and agents to understand how mortgage assignment takes place. As a real estate professional, I will help you define mortgage assignments for your real estate exam.

What Is Mortgage Assignment?

Mortgage lenders have the right to assign and sell their mortgages to other parties, while borrowers are not. If a borrower transfers their mortgage to another person, it is called an assumed mortgage.

How Does Assignment of Mortgage Take Place?

Effects of mortgage assignments.

Another thing that might change after mortgage assignment is the process that the lender will follow if the borrower defaults. Mortgage lenders use different notification methods, which the borrower must be familiar with to avoid confusion. The following are the effects of the assignment of mortgage:

Notice to Borrower

Modification, effects on escrow payments, mortgage assignment example, frequently asked questions, who files the assignment of mortgage, what happens after mortgage assignment, why do lenders sell mortgages, what is assignment fraud, what to know for the real estate exam.

A mortgage assignment is when the original lender transfers the mortgage to a new lender. This type of assignment is common between lenders who sell mortgages to each other. Lenders sell mortgages to free up capital and buy more mortgages to offer them to other borrowers. Mortgage assignment doesn’t change anything for the borrower, except that the borrower has to make mortgage payments to the new lender.

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If you switch lenders, can you just change the name on the appraisal?

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Home » Appraisals » If you switch lenders, can you just change the name on the appraisal?

One of the things we hear a lot from borrowers and sometimes lenders is – The borrower switched lenders, and we need the appraiser to change the lender name. Can the appraiser just switch it without having to do a new assignment?

The answer is no – this is a USPAP. USPAP requires a new assignment if the lender/client changes. If the appraiser simply switches the lender name, they are in violation of USPAP and putting their appraisal license at risk. In order to comply with USPAP, there must be a new assignment ordered by the new lender/client.

Borrowers sometimes ask: I’m the one that paid for this appraisal – can’t you just give me a copy of it?” But again, this is a USPAP issue. USPAP mandates that the appraiser must not disclose confi dential information or assignment results to anyone other than the client or those specifi cally authorized by the client. Without consent from the lender, neither the appraiser nor the AMC can provide the report to the borrower or discuss it with them.

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• Assignment of Mortgage

Lenders or holders of mortgages often assign them to other lenders. The person or entity that receives the assignment will step into the place of the original lender. An assignment of mortgage should be in the appropriate format to provide notice to others. It should describe the property so that everyone understands which piece of property is attached to the assignment. It should also include the names of the various parties, contact information, and the date of the assignment. When a lender assigns a mortgage to another lender, the document will need to state the identity of the borrower. If a borrower assumes a mortgage, it should identify the lender.

Mortgages are often transferred to other lenders several times before being paid off. Lenders do not need to notify borrowers when selling a mortgage. Borrowers do not have a say in whether the mortgage is sold to another lender. However, the new lender is supposed to notify the borrower of the sale and give the borrower information on how to pay the new lender. In some cases, a borrower can try to renegotiate the terms of the loan, or, if the borrower does not want to continue with the new lender on the loan, the borrower can apply for a new mortgage to pay off the sold loan. When a new borrower assumes a mortgage, however, they must show that they have the financial ability to pay off the mortgage and that they understand the terms of the obligation that they have undertaken.

In Massachusetts, unlike some other jurisdictions, an assignment or mortgage must be in writing and then filed in the Registry of Deeds. A blank assignment is invalid. This is an important point because under case law, if the assignment is blank, a foreclosure sale related to the mortgage will be void. A foreclosing entity must obtain an assignment of mortgage in order to foreclose.

Once a mortgage has been paid, the holder should record a satisfaction in the proper written format to give notice to others that it no longer has a lien on the property.

Our Boston real estate attorneys can help you understand the requirements related to an assignment of mortgage and the consequences of assuming or assigning a mortgage. Our firm also advises and represents sellers, lenders, buyers, and associations in Cambridge, Andover, and Quincy, among other Massachusetts communities. Contact Pulgini & Norton at 781-843-2200 or through our online form for a free consultation with a home mortgage attorney.

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CFPB Orders NewDay USA to Pay $2.25 Million for Illegally Luring Veterans and Military Families into Cash-Out Refinance Loans

NewDay USA’s deceptive tactics came amid VA home loan “churning” scandal

WASHINGTON, D.C. – The Consumer Financial Protection Bureau (CFPB) today took action against repeat offender New Day Financial (NewDay USA) for deceiving active duty servicemembers and veterans seeking cash-out refinance loans. The CFPB found that NewDay USA gave misleading and incomplete cost comparisons to borrowers refinancing in North Carolina, Maine, and Minnesota, which made the company’s loans appear less expensive relative to their existing mortgages. The CFPB is ordering NewDay USA to pay a $2.25 million civil penalty to the CFPB’s victims relief fund.

“NewDay USA baited veterans and military families into cash-out refinance mortgages by hiding the true costs of these loans,” said CFPB Director Rohit Chopra. “NewDay USA’s misconduct has no place in the VA home loan program.”

New Day Financial, LLC is a non-bank direct mortgage lender headquartered in West Palm Beach, Florida, and specializes in offering mortgage loans guaranteed by the United States Department of Veterans Affairs (VA). The company currently operates under the brand NewDay USA, and uses patriotic imagery and other marketing tactics to build trust with military-connected families. Since at least 2015, NewDay USA has provided cash-out refinance loans to consumers, including veterans and active-duty servicemembers.

NewDay USA gave borrowers misleading information about the costs of its cash-out refinances. Specifically, for the “new loan” payment amount listed on disclosures provided to consumers, NewDay USA included only the principal and interest payments. It then presented a side-by-side comparison of the “new loan” payment amount with that of the “previous loan” payment amount, which included principal, interest, taxes, and insurance. This made NewDay USA cash-out refinance loans appear less expensive relative to consumers’ original mortgages, but for many consumers the refinanced loans were more expensive. NewDay USA originated at least 3,000 cash-out refinances in North Carolina and Maine through 2020 and Minnesota through 2018, most of which included the misleading comparisons.

The CFPB, VA, and Ginnie Mae – which guarantees mortgage loans made through VA home loan programs and other governmental mortgage programs – have long been concerned about the practice known as loan “churning,” where lenders aggressively push veterans to repeatedly refinance their VA home loans, often unnecessarily. In some cases, after a veteran had obtained a cash-out refinance loan with a high rate and bad terms, they would quickly be inundated with refinance offers advertising a lower rate at an additional cost. As a result, while mortgage lenders profited from refinancing VA home loans through fees and selling the loans on the secondary market, borrowers may have faced higher overall costs.

Ginnie Mae has previously taken action against a number of lenders – including NewDay USA – over concerns about loan churning. Ginnie Mae limited the lenders’ ability to package and sell these loans to investors. Both Ginnie Mae and the VA have taken significant steps to rein in churning activity.

The CFPB previously took action against New Day Financial in 2015 for paying illegal kickbacks and deceiving borrowers about a veterans’ organization’s endorsement of NewDay USA products.

Enforcement Action

Under the Consumer Financial Protection Act, the CFPB has the authority to take action against institutions violating consumer financial protection laws, including engaging in unfair, deceptive, or abusive acts or practices. The CFPB’s order requires NewDay USA to:

• Pay a $2.25 million fine: NewDay USA will pay a $2.25 million penalty to the CFPB’s victims relief fund .
• Stop misrepresenting loan costs to borrowers: The CFPB’s order prohibits NewDay USA from misrepresenting facts about its mortgage loan products, including the monthly payment amount of any mortgage loan product or with misleading side-by-side comparison worksheets.

Read today’s order .

Learn about mortgage protections for servicemembers and veterans.

Learn more about financial resources for servicemembers, veterans, and military families.

Consumers can submit complaints about financial products and services by visiting the CFPB’s website or by calling (855) 411-CFPB (2372) .

Employees who believe their company has violated federal consumer financial protection laws are encouraged to send information about what they know to [email protected] . To learn more about reporting potential industry misconduct, visit the CFPB’s website .

The Consumer Financial Protection Bureau is a 21st century agency that implements and enforces Federal consumer financial law and ensures that markets for consumer financial products are fair, transparent, and competitive. For more information, visit www.consumerfinance.gov .

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Cardinals designate OF Tommy Pham for assignment, recall Jordan Walker

St. Louis Cardinals’ Tommy Pham watches his sacrifice fly to score Nolan Arenado during the fourth inning of a baseball game against the Milwaukee Brewers Wednesday, Aug. 21, 2024, in St. Louis. (AP Photo/Jeff Roberson)

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NEW YORK (AP) — The St. Louis Cardinals designated Tommy Pham for assignment on Friday, ending the outfielder’s second stint with the team after one month, and recalled outfielder Jordan Walker, who had a strong rookie season in 2023 before struggling this year.

Pham was acquired along with starting pitcher Erick Fedde from the Chicago White Sox on July 29 as part of a three-team trade that sent Michael Kopech and Tommy Edman to the Dodgers.

Pham hit a grand slam in his first game for the Cardinals but batted .206 with two homers and 12 RBIs in 23 games. He was 2 for 28 in his last 10 games. Pham batted .266 with five homers and 19 RBIs this season for the majors-worst White Sox.

“We had a couple of conversations and during those conversations, he felt like it would be better for his career for this move to be made,” manager Oliver Marmol said before the Cardinals opened a three-game series at the New York Yankees. “So we granted it.”

A free agent after this season, Pham began his big league career by playing 4 1/2 seasons for the Cardinals, who traded him to Tampa Bay at the 2018 deadline.

Last season, he helped the Diamondbacks reach the World Series after being acquired from the New York Mets at the deadline. The well-traveled Pham also has played for San Diego, Cincinnati and Boston.

Walker made St. Louis’ opening day roster but was 10 for 69 (.145) in 24 games. The 22-year-old was optioned to Triple-A Memphis on April 26, returned Aug. 12 and went 1 for 11 in four games.

“I think Jordan Walker has a chance to be a real game-changing impact player for a very long time for this organization,” Marmol said. “In order to do that, he’s going to need the at-bats but he’s also going to need some real adjustments throughout those at-bats for him to become that player and I do have confidence in his ability to do that.”

At Triple-A, the former first-round pick batted .263 with nine homers and 37 RBIs in 84 games.

Walker hit .276 with 16 homers and 51 RBIs in 117 games as a rookie last season, which he began with a 12-game hitting streak.

AP MLB: https://apnews.com/hub/mlb

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Charles Kennedy

Charles is a writer for Oilprice.com

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Texas to Consider $5.4 Billion Loans for New Natural Gas Plants

The Public Utility Commission of Texas will review the extension of $5.38 billion worth of low-interest loans to companies planning nearly 10 gigawatts (GW) of new natural gas-fired capacity in a bid to boost generation capacity for ERCOT.

Projects by NRG Energy, NextEra, Constellation Energy, Engie, and Vistra have all advanced in the review process.

The Texas Energy Fund was established in 2023 by the Texas Legislature through Senate Bill 2627, the Powering Texas Forward Act, to provide grants and loans to finance the construction, maintenance, modernization, and operation of electric facilities in Texas.

The Texas Energy Fund provides funding opportunities for electric generation projects through four programs based on an application process and award system developed by the Public Utility Commission of Texas (PUCT).

In the latest application process for the In-ERCOT Generation Loan program, PUCT received during the application period in July a total of 72 applications seeking more than $24 billion in funding for projects representing over 38,000 megawatts of proposed new dispatchable generation.

“This is an enormous step forward in our on-going work to meet the fast-growing demand for electricity in our state”.

“Each application was closely analyzed, and the projects selected to advance will have the greatest impact in meeting the needs of the ERCOT grid and ensure long-term electric reliability in Texas,” Gleeson added.

Texas used  a record amount of electricity  on August 20, the Electric Reliability Council said last week.

Earlier in the year, ERCOT forecast that electricity demand in the Lone Star State could double in six years, necessitating the urgent addition of more generation capacity.

By Charles Kennedy for Oilprice.com

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With Court Victories, Conservatives Push Back on Biden Policies

Legal challenges have blocked many of the policies that President Biden saw as critical to his legacy, on issues like immigration and student loans.

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By Hamed Aleaziz and Michael D. Shear

Hamed Aleaziz covers immigration policy, and Michael D. Shear covers the White House. They reported from Washington.

After rewriting Title IX regulations to include protections for gender identity, President Biden told trans students: “We see you.” When he announced in April his latest executive actions to waive student loan debt, he proudly proclaimed that “this relief can be life-changing.”

And standing in front of a group of immigrant advocates in June, Mr. Biden boasted that he had used the power of his presidency to provide a new path to legal status for undocumented spouses of U.S. citizens — ending fear and uncertainty for a half-million people.

“We can fix that,” Mr. Biden said. “And that’s what I’m going to do today: fix it.”

In all three cases — and a long list of other executive actions — Mr. Biden’s promises of progress and relief have been stymied by aggressive legal challenges led by conservative activists, lawmakers and Republican state attorneys general. Their efforts to disrupt the president’s agenda have often been bolstered by federal judges, appellate courts and, in some cases, the majority of conservative justices on the Supreme Court.

The president’s use of executive orders was supposed to have been the solution to a closely divided and paralyzed Congress, especially as the 2024 race got underway. Of his six signature bills that Mr. Biden signed into law during his presidency, none came after December of 2022.

But as Mr. Biden nears the end of his presidency, the effort to bypass Congress with regulatory changes, executive orders and presidential memorandums has faltered. That outcome is likely to affect his legacy and could make it more difficult for Vice President Kamala Harris to point to progress as she campaigns for the White House this fall.

In many cases, the courts have temporarily blocked Mr. Biden’s programs pending legal challenges that could take years to resolve. In some instances — like the president’s original plan to provide nearly $400 billion in student debt relief — the Supreme Court has declared the programs unconstitutional, forcing the Biden administration back to the drawing board.

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