A mortgage assignment is a document that shows the transfer of a mortgage from the original lender or borrower to a third party. Lenders can sell mortgages multiple times, and borrowers may not be notified. With an assumable mortgage, the new borrower must demonstrate financial capability and understanding of the loan terms. The mortgage assignment is filed with the government office that handles property records. Borrowers should confirm the sale with their lender and registrar’s office to avoid scams.
A mortgage assignment is a document indicating that a mortgage has been transferred from the original lender or borrower to a third party. Such documents are most commonly seen when lenders sell mortgages to other lenders. When someone has what is known as an assumable mortgage, it is possible for the borrower to transfer the mortgage to someone else, in which case a mortgage assignment will be required to record the transaction.
This document indicates that the loan obligation has been transferred. It usually describes the property so there is no confusion about what real estate is being discussed. You must include the name of the original party, along with the name of the third party, with contact information, and the date the mortgage assignment becomes effective. In the case of an inter-lender mortgage assignment, the document indicates the identity of the borrower, while the assumed mortgages identify the lender and indicate that the transfer was made between borrowers.
Lenders routinely sell mortgages, and in fact, a mortgage can be transferred multiple times before it is paid off. Lenders are not required to notify borrowers when they sell mortgages, and borrowers do not have an opportunity to contest the sale. The new lender must send a notice that a sale has been made and provide information on how to make the mortgage payments to the new lender. The borrower may try to negotiate a change in terms, or if the borrower does not want to work with the new lender, it may be possible to apply for a new mortgage to pay off the old one.
With an assumable mortgage, the problem is a bit more complicated. Lenders don’t want borrowers to assign their mortgages to people who can’t keep up with the payments, as they will then have to foreclose and sell the property, adding to the expense of servicing the loan. As a result, people who want to take on a mortgage must demonstrate that they are financially capable of taking out the loan and that they fully understand the terms of the loan.
A mortgage assignment will be filed with the same government office that handles property records, property taxes, and related matters. People should keep in mind that sometimes a mortgage assignment doesn’t post for several months, especially if there is a backlog of documentation material that needs to be reviewed.
If borrowers receive a notice in the mail that their mortgage has been transferred, they should call their lenders to confirm the sale and ask who the mortgage was sold to. It is also advisable to consult the registrar’s office to confirm that a mortgage assignment has been followed. Borrowers should be aware that some scammers take advantage of people by claiming that their mortgages have been transferred when this is actually not the case.
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