Definition of an Assignment of Mortgage
An assignment of mortgage is a transfer of mortgage from one mortgagee to another. A written document serves as proof of the transfer.
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Parties Involved
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An assignment of mortgage is a bank-to-bank transaction. The original mortgagor or borrower is not involved.
Reasons
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Banks sell loans to make room on balance sheets to lend more money. Mortgages can also be assigned to the Federal Housing Administration to help a distressed borrower avoid foreclosure.
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Frequency
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Many mortgages are sold and assigned at least once over the life of the loan.
Notification
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The mortgagee or lender does not need to notify the borrower that the loan has been sold. The assignee, or new mortgage holder, is responsible for notifying the borrower.
Changes
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No changes are made to the mortgage when it is transferred. From the borrower's standpoint, the only change is to whom payment is sent.
Borrower Actions
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Borrowers can guard against identity theft scams by contacting their old lenders if they receive notification of an assignment of mortgage. The borrower should confirm that the loan was sold and the name of the purchasing company, then verify this information against the notice received.
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References
- "Encyclopedia of Mortgage & Real Estate Finance, Third Edition"; Albert Santi; 2003
- "Essentials of New Jersey Real Estate, Eighth Edition"; Edith Lank and Joan M. Sobeck; 2004
- U.S. Department of Housing and Urban Development, U.S. Housing Market Conditions Summary
