An assignment of mortgage is a legal document that records the transfer of a mortgage from one party to another. This transfer involves the ownership of the mortgage, which can be from the original lender or borrower to a new entity or individual.
Key Facts
- Definition: An assignment of mortgage is a legal document that records the transfer of a mortgage from one party to another.
- Transfer of Ownership: When a mortgage is assigned, the ownership of the mortgage is transferred from the original lender or borrower to a new entity or individual.
- Reasons for Assignment: Lenders often sell mortgages to other lenders, which allows them to free up capital and make more loans. In some cases, borrowers may also transfer their mortgage to someone else who assumes the mortgage.
- Mortgage Assignment Document: The assignment of mortgage is documented through a legal document that includes information such as the borrower’s name, the date of the mortgage, the jurisdiction where it was recorded, the original loan amount, and a legal description of the property used as collateral.
- Notification: While lenders do not need to request the borrower’s permission before assigning a mortgage, they are required to notify the borrower after the mortgage has been assigned. The notice typically includes the new lender’s name, contact information, and payment instructions.
- Impact on Terms: When a mortgage is assigned, the general terms of the mortgage, such as the interest rate and payment amounts, remain the same. However, the new mortgage holder may have different methods of accepting payments and handling escrow payments for property taxes and insurance.
- Borrower’s Responsibility: The borrower does not need to notify the local taxing authorities or the hazard insurance provider about the assignment. It is the responsibility of the new mortgage holder to handle these notifications.
Reasons for Assignment
Lenders frequently sell mortgages to other lenders to free up capital and generate more loans. In some cases, borrowers may also transfer their mortgage to someone else who assumes the mortgage.
Mortgage Assignment Document
The assignment of mortgage is documented through a legal document that includes the following information:
- Borrower’s name
- Date of the mortgage
- Jurisdiction where recorded
- Original loan amount
- Legal description of the property used as collateral
Notification
While lenders do not need to request the borrower’s permission before assigning a mortgage, they are required to notify the borrower after the mortgage has been assigned. The notice typically includes the new lender’s name, contact information, and payment instructions.
Impact on Terms
When a mortgage is assigned, the general terms of the mortgage, such as the interest rate and payment amounts, remain the same. However, the new mortgage holder may have different methods of accepting payments and handling escrow payments for property taxes and insurance.
Borrower’s Responsibility
The borrower does not need to notify the local taxing authorities or the hazard insurance provider about the assignment. It is the responsibility of the new mortgage holder to handle these notifications.
Sources
- Assignment of Mortgage | Boston Real Estate Lawyer Pulgini & Norton
- What Is Assignment Of Mortgage? | Quicken Loans
- Understanding How Assignments of Mortgage Work – SmartAsset | SmartAsset
FAQs
What is an assignment of mortgage?
An assignment of mortgage is a legal document that records the transfer of a mortgage from one party to another.
Why do lenders assign mortgages?
Lenders assign mortgages to free up capital and generate more loans.
What information is included in an assignment of mortgage document?
An assignment of mortgage document includes the borrower’s name, date of the mortgage, jurisdiction where recorded, original loan amount, and legal description of the property used as collateral.
Do I need to be notified if my mortgage is assigned?
Yes, lenders are required to notify borrowers after a mortgage has been assigned.
What changes when my mortgage is assigned?
The general terms of the mortgage, such as the interest rate and payment amounts, remain the same. However, the new mortgage holder may have different methods of accepting payments and handling escrow payments for property taxes and insurance.
Do I need to do anything when my mortgage is assigned?
No, you do not need to take any action. The new mortgage holder will handle all notifications and payments.
Who is responsible for paying property taxes and insurance after my mortgage is assigned?
The borrower is still responsible for paying property taxes and insurance. The new mortgage holder will handle the escrow payments.
Can I dispute an assignment of mortgage?
You may be able to dispute an assignment of mortgage if there was fraud or other legal issues involved.