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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.

Attorney Todd Carney

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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Mortgage Assignment Laws and Definition

(This may not be the same place you live)

  What is a Mortgage Assignment?

A mortgage is a legal agreement. Under this agreement, a bank or other lending institution provides a loan to an individual seeking to finance a home purchase. The lender is referred to as a creditor. The person who finances the home owes money to the bank, and is referred to as the debtor.

To make money, the bank charges interest on the loan. To ensure the debtor pays the loan, the bank takes a security interest in what the loan is financing — the home itself. If the buyer fails to pay the loan, the bank can take the property through a foreclosure proceeding.

There are two main documents involved in a mortgage agreement. The document setting the financial terms and conditions of repayment is known as the mortgage note. The bank is the owner of the note. The note is secured by the mortgage. This means if the debtor does not make payment on the note, the bank may foreclose on the home. 

The document describing the mortgaged property is called the mortgage agreement. In the mortgage agreement, the debtor agrees to make payments under the note, and agrees that if payment is not made, the bank may institute foreclosure proceedings and take the home as collateral .

An assignment of a mortgage refers to an assignment of the note and assignment of the mortgage agreement. Both the note and the mortgage can be assigned. To assign the note and mortgage is to transfer ownership of the note and mortgage. Once the note is assigned, the person to whom it is assigned, the assignee, can collect payment under the note. 

Assignment of the mortgage agreement occurs when the mortgagee (the bank or lender) transfers its rights under the agreement to another party. That party is referred to as the assignee, and receives the right to enforce the agreement’s terms against the assignor, or debtor (also called the “mortgagor”). 

What are the Requirements for Executing a Mortgage Assignment?

What are some of the benefits and drawbacks of mortgage assignments, are there any defenses to mortgage assignments, do i need to hire an attorney for help with a mortgage assignment.

For a mortgage to be validly assigned, the assignment document (the document formally assigning ownership from one person to another) must contain:

  • The current assignor name.
  • The name of the assignee.
  • The current borrower or borrowers’ names. 
  • A description of the mortgage, including date of execution of the mortgage agreement, the amount of the loan that remains, and a reference to where the mortgage was initially recorded. A mortgage is recorded in the office of a county clerk, in an index, typically bearing a volume or page number. The reference to where the mortgage was recorded should include the date of recording, volume, page number, and county of recording.
  • A description of the property. The description must be a legal description that unambiguously and completely describes the boundaries of the property.

There are several types of assignments of mortgage. These include a corrective assignment of mortgage, a corporate assignment of mortgage, and a mers assignment of mortgage. A corrective assignment corrects or amends a defect or mistake in the original assignment. A corporate assignment is an assignment of the mortgage from one corporation to another. 

A mers assignment involves the Mortgage Electronic Registration System (MERS). Mortgages often designate MERS as a nominee (agent for) the lender. When the lender assigns a mortgage to MERS, MERS does not actually receive ownership of the note or mortgage agreement. Instead, MERS tracks the mortgage as the mortgage is assigned from bank to bank. 

An advantage of a mortgage assignment is that the assignment permits buyers interested in purchasing a home, to do so without having to obtain a loan from a financial institution. The buyer, through an assignment from the current homeowner, assumes the rights and responsibilities under the mortgage. 

A disadvantage of a mortgage assignment is the consequences of failing to record it. Under most state laws, an entity seeking to institute foreclosure proceedings must record the assignment before it can do so. If a mortgage is not recorded, the judge will dismiss the foreclosure proceeding. 

Failure to observe mortgage assignment procedure can be used as a defense by a homeowner in a foreclosure proceeding. Before a bank can institute a foreclosure proceeding, the bank must record the assignment of the note. The bank must also be in actual possession of the note. 

If the bank fails to “produce the note,” that is, cannot demonstrate that the note was assigned to it, the bank cannot demonstrate it owns the note. Therefore, it lacks legal standing to commence a foreclosure proceeding.

If you need help with preparing an assignment of mortgage, you should contact a mortgage lawyer . An experienced mortgage lawyer near you can assist you with preparing and recording the document.

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What Is Corporate Assignment of a Mortgage?

...

An assignment of a mortgage occurs when a loan for a piece of property (home or otherwise) is assigned to another party. In some cases, the other party might be an official lender that takes over the loan. A corporate assignment of a mortgage occurs when the third party that assumes the obligation for the loan is a corporation. Again, this corporation might be a lender that is officially incorporated, or it might be some other business (or even individual) that is legally considered a corporation.

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During a corporate assignment of a mortgage, the legal obligation of one or the other party toward the mortgage is altered. The bank may choose to assign the mortgage to another lender, or the borrower may choose to assign the mortgage to a third-party corporation. In either case, the transfer initiates a change in the relationship that the parties have toward the mortgage, and since mortgages involve property and financial obligations toward it, the assignment results in a legal change in the status of the property ownership.

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Significance

Corporate assignment of a mortgage occurs most frequently during the foreclosure process. The original--or current--lender for the mortgage may choose to transfer the mortgage to a different lender. On the other hand, the borrower who is paying on the loan may also choose to transfer the obligation of that loan to a third party, who will then assume the responsibility of making the payments. Both occurrences result in a corporate assignment of a mortgage, although the obligations about notification are different in both cases.

Requirements

When one lender transfers the loan to another, the assignment of the mortgage becomes a simple piece of paperwork within the mortgage documents. In fact, the borrower might not find out about the assignment until a change in the loan occurs. When a borrower assigns the mortgage to a third party corporation, however, the borrower must file official paperwork to record the assignment. The paperwork is simple, and forms are available online.

Considerations

A corporate assignment of a mortgage is a fully legal transfer, but the requirements about documentation and filing vary by state. In the case of borrowers who plan to transfer the mortgage to a third-party corporation, it is important to research state laws by contacting the state real estate board and to consult real estate attorneys for guidance before signing any forms. An incorrectly documented transfer might create a continued obligation on the original borrower.

Expert Insight

Mortgage assignments between lenders have become increasingly common, and they can create problems not only for borrowers who run into financial difficulty, but for home buyers interested in a piece of property. As a result, real estate experts caution home buyers to research the title of the property to ensure that any assignment of a mortgage was completed fully and that there are not multiple claims on the property.

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REAL ESTATE LAW

What is a corporate assignment of deed of trust.

By Editorial Team

September 26, 2017

Reviewed by Michelle Seidel, B.Sc., LL.B./JD, MBA

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corporate assignment of mortgage

  • What Is a Deed of Trust With Assignment of Rents?

A deed of trust is often used interchangeably with the term mortgage (although they have varying meanings depending on the state) and is the document that assigns the title and value of the property to specific parties. In a typical deed of trust , the deed is held by a certain agency, usually the lender or the escrow company, while the borrower pays back the mortgage. When the mortgage is paid, the title is given back to the borrower, but deeds of trust do not always stay in the same hands all the time.

​ Read More: ​ What is an Assignment of Trust Deed?

An assignment of a deed of trust is simply the movement of the deed of trust from one party to another, a party that was not originally involved in the deed creation when the property was bought. A corporate assignment is simply an assignment of the deed of trust between different businesses. Since the majority of mortgages are created by banks and lending institutions and not private lenders, most assignments of deeds of trust are corporate by nature.

Lender Assignments

Not all lenders reassign the deeds of trust that they hold, but some do and the practice is common. The lender typically moves the deed of trust into the hands of another lender. The other lender takes the place of the organization that originally made the loan, and the mortgage contract rules now apply to the new business. Lenders do this for several different reasons. For example, many choose to assign deeds of trust when they are selling mortgages in order to create immediate profit for themselves by selling the possession of the deed itself.

Requirements

The key part of a corporate assignment of a deed of trust is the debt obligation. The acquiring company wants to make sure that the borrower will now be making payments to them, not the original lender, so assignments are usually very clear on this matter. Assignment forms vary by state in other matters, depending on what regulations states have when it comes to transferring mortgages and similar documents.

Reconveyance

When the mortgage is paid off, the escrow company will initiate a reconveyance, ending the deed and moving the title from the lender to the hands of the borrower. This is a final type of assignment. It is not strictly corporate unless the borrower also was a business, but it represents the end of the process and a reconveyance (known as a satisfaction or cancellation depending on the state) is closely related to an assignment.

​ Read More: ​ What Is a Deed of Trust With Assignment of Rents?

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  • USLegal: Description -- California Assignment and Satisfaction of Mortgage Law
  • Legal Beagle: What is an Assignment of Trust Deed?
  • Legal Beagle: What Is a Deed of Trust With Assignment of Rents?
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This article was written by Legal Beagle staff. If you have any questions, please reach out to us on our contact us page.

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corporate assignment of mortgage

In an order dated June 5, 2017, the Supreme Court, inter alia, granted the plaintiff's motion, among other things, for summary judgment on the complaint insofar as asserted against BP Hatzlucha and to appoint a referee to compute the amount due to the plaintiff. Following a hearing, the referee issued a report setting forth his findings regarding the amount due and owing on the note. The plaintiff moved to confirm the referee's report and for a judgment of foreclosure and sale. In an order and judgment of foreclosure and sale dated October 31, 2018, the court granted the plaintiff's motion to confirm the referee's report and for a judgment of foreclosure and sale, and directed the sale of the subject property. BP Hatzlucha appeals.

To have standing to commence a foreclosure action, a plaintiff must have been the holder or assignee of the note at the time the action was commenced (see Aurora Loan Servs., LLC v Taylor, 25 NY3d 355, 361-362), and "the note . . . is the dispositive instrument that conveys standing to foreclose under New York law" (id. at 361). "Either a written assignment of the underlying note or the physical delivery of the note prior to the commencement of the foreclosure action is sufficient to transfer the obligation, and the mortgage passes with the debt as an inseparable incident" (U.S. Bank, N.A. v Collymore, 68 AD3d 752,754; see Aurora Loan Servs., LLC v Taylor, 25 NY3d at 361-362; Federal Natl. Mtge. Assn. v Onuoha, 172 AD3d 1170, 1172; Marchai Props., L.P. v Fu, 171 AD3d 722, 724). Although our dissenting colleague suggests that the concept that standing arises from either the possession of the note or the assignment of it is of recent and misguided jurisprudence, that premise is incorrect. Indeed, the standing of the assignee of a note has long been recognized in both New York (see Merritt v Bartholick, 36 NY 44, 45 [1867]) and federal (see Carpenter v Longan, 83 US 271, 275 [1872]) jurisprudence. The dissent's reliance on the law of our 49 sister states as applied in New York trial court decisions is of no moment in this case. Further, it is disconcerting that our dissenting colleague relies upon trial court criticism of our long-standing jurisprudence with regard to standing.

An action to foreclose a mortgage is subject to a six-year statute of limitations (see CPLR 213[4]; Kashipour v Wilmington Sav. Fund Socy., FSB, 144 AD3d 985, 986; Nationstar Mtge., LLC v Weisblum, 143 AD3d 866, 867). "'[E]ven if a mortgage is payable in installments, once a mortgage debt is accelerated, the entire amount is due and the Statute of Limitations begins to run on the entire debt'" (Nationstar Mtge., LLC v Weisblum, 143 AD3d at 867, quoting EMC Mtge. Corp. v Patella, 279 AD2d 604, 605).

"An acceleration of a mortgage debt can occur when a creditor commences an action to foreclose upon a note and mortgage and seeks, in the complaint, payment of the full balance due" (Wells Fargo Bank, N.A. v Lefkowitz, 171 AD3d 843, 844 [internal quotation marks omitted]). "However, service of a complaint is ineffective to constitute a valid exercise of the option to accelerate a debt where the plaintiff does not 'have the authority to accelerate the debt or to sue to foreclose at that time'" (MLB Sub I, LLC v Grimes, 170 AD3d 992, 993, quoting Wells Fargo Bank, N.A. v Burke, 94 AD3d 980, 983; see J & JT Holding Corp. v Deutsche Bank Natl. Trust Co., 173 AD3d 704, 707).

Here, the plaintiff established, prima facie, that Option One lacked standing to commence the 2006 action and, as a result, it did not have authority to validly exercise the option to accelerate the debt (see J & JT Holding Corp. v Deutsche Bank Natl. Trust Co., 173 AD3d at 707; U.S. Bank N.A. v Gordon, 158 AD3d 832, 836). The 2006 assignment executed by Option One assigned both the note and the mortgage to Residential prior to Option One's commencement of the 2006 action on October 24, 2006. Moreover, according to the 2006 assignment, Option One had endorsed the note to Residential by assigning "all right, title and interest in said note and all rights accrued under said Mortgage and all indebtedness secured thereunder" "[e]ffective as of 10-23-06" (emphasis added). The assignment was duly recorded in the office of the City Register on June 15, 2007, affording notice to Rudman and BP Hatzlucha prior to the transfer of the subject property in March 2012. Thus, the plaintiff's evidence showed that when Option One commenced the 2006 action, Residential was the lawful assignee of the note and the mortgage (see J & JT Holding Corp. v Deutsche Bank Natl. Trust Co., 173 AD3d at 707; 21st Mtge. Corp. v Adames, 153 AD3d 474, 475).

Option One acknowledged as much in its complaint wherein it alleged being the holder of only the mortgage, not the note. Our dissenting colleague's reliance upon the verification or certification of Option One's attorney does not in any way support the conclusion that Option One was the holder of the note at the time the 2006 action was commenced. An attorney inspecting a note for the purpose of drafting a complaint and a mortgagee being the holder of the note are two entirely different legal concepts. Option One's counsel's artful failure to mention that Option One was the holder of the note cannot be ignored.

We disagree with our dissenting colleague's assertion that Option One, after its assignment of the note and mortgage to Residential, continued to have standing to commence and prosecute the 2006 action. Our dissenting colleague misreads the holding in Wilmington Sav. Fund Socy., FSB v Matamoro (200 AD3d 79, 90-91), wherein we held that there are three bases to establish standing in residential foreclosure actions. There is no dispute with regard to the second two bases for finding standing; to wit: a plaintiff's physical possession of the note prior to commencement of the foreclosure action with an allonge or endorsement in blank or to the plaintiff (second basis), or an assignment of the note to the plaintiff prior to the commencement of the foreclosure action (third basis). However, while the Matamoro Court described the first basis for standing as being "where the plaintiff is the original lender in direct privity with the defendant" (id. at 90-91), the second part of the description explained that "[t]he direct privity is rarely seen in residential mortgage foreclosure litigations, given the nature of the home lending business where financial instruments are routinely sold, assigned, or 'bundled' from one institution to another between the time funds are initially dispersed by a lender and the commencement of a later foreclosure action" (id. at 91 [emphasis added]). The Matamoro Court's holding and description of the nature of the market falls squarely into the facts of this case. Contrary to our dissenting colleague's rationale that the original lender retains the right to sue on a note that it has fully assigned, we have held that"'[a]n absolute assignment of a bond and mortgage transfers to the assignee all rights theretofore conferred upon the assignor-mortgagee to enforce the bond and mortgage'" (Gasco Corp. & Gordian Group of Hong Kong v Tosco Props., 236 AD2d 510, 512, quoting 78 NY Jur 2d, Mortgages & Deeds of Trust, former § 270, at 101 [emphasis added]). Our dissenting colleague's attempt to finesse her position on standing as expressed in her footnote ignores our holding in Gasco with regard to the absolute assignment of the mortgage and the note. Thus, Option One, at the time of commencement of the 2006 foreclosure action, was not in direct privity with Rudman, the maker of the note. Taken to its logical conclusion, our dissenting colleague [*2]is giving her imprimatur to simultaneous foreclosure actions by the original lender which received consideration for the assignment on the one hand and its assignee on the other.

In opposition to the plaintiff's prima facie showing, BP Hatzlucha failed to raise a triable issue of fact. Contrary to BP Hatzlucha's contention, the filing of the corporate assignment of the mortgage in 2012, which did not contain any reference to the note, did not impact the prior assignment of the note in 2006. Moreover, since the mortgage "passes with the debt as an inseparable incident" (U.S. Bank, N.A. v Collymore, 68 AD3d at 754), the validity of the purported later assignment solely of the mortgage is irrelevant with respect to the issue of standing (see Aurora Loan Servs., LLC v Taylor, 25 NY3d at 362; Deutsche Bank Natl. Trust Co. v Smartenko, 199 AD3d 643; Wilmington Sav. Fund Socy., FSB v Hershkowitz, 189 AD3d 1126, 1128). Further, since the 2006 assignment specifically stated that Option One was assigning the note to Residential, it was not necessary for the plaintiff to submit proof as to when the note was endorsed to Residential or physically delivered to Residential, since the written assignment of the underlying note prior to the commencement of the 2006 action was sufficient to demonstrate that Option One no longer had standing at the time of commencement (see U.S. Bank, N.A. v Collymore, 68 AD3d at 754; see also Aurora Loan Servs., LLC v Taylor, 25 NY3d at 361-362). In any event, the 2006 assignment established that the note was endorsed to Residential as of the date of execution, April 13, 2006, since the endorsement is referenced in the assignment. This assignment cannot merely be dismissed out of hand as "boilerplate," as does our dissenting colleague, inasmuch as it is consistent with the language set forth in Schedules O and P in Real Property Law § 258 and with the understanding of the parties.

Further, Rudman's failure to raise an objection to Option One's standing in the context of the 2006 action is immaterial in light of Option One's undisputed lack of interest in the claim on which it sued. "[S]tanding requires an inquiry into whether the litigant has 'an interest in the claim at issue in the lawsuit that the law will recognize as a sufficient predicate for determining the issue at the litigant's request'" (Wells Fargo Bank Minn., N.A. v Mastropaolo, 42 AD3d 239, 242, quoting Caprer v Nussbaum, 36 AD3d 176, 182). The cases cited by our dissenting colleague address factual scenarios different from those presented here. In this case, the lack of Option One's ownership interest in the note at the time of commencement of the 2006 action is dispositive (see J & JT Holding Corp. v Deutsche Bank Natl. Trust Co., 173 AD3d at 707; MLB Sub I, LLC v Grimes, 170 AD3d at 993; Wells Fargo Bank, N.A. v Burke, 94 AD3d at 983).

BP Hatzlucha's contention that the plaintiff's motion, inter alia, for summary judgment on the complaint insofar as asserted against it and to appoint a referee to compute the amount due was procedurally defective is without merit. Contrary to BP Hatzlucha's contention, the affidavit of Christopher Caldwell, an employee of the plaintiff, through which the plaintiff submitted several exhibits, was not defective even though it was executed outside New York and did not contain a certificate of conformity. "Out-of-state affidavits need merely conform 'substantially' to [Real Property Law § 309-b] to be adequate" (Midfirst Bank v Agho, 121 AD3d 343, 351). Immediately following Caldwell's signature, his affidavit contained the following language:

"COUNTY OF KNOX )ss.:

"[Signature]

"NOTARY PUBLIC."

Since this language mirrored the language set forth in Real Property Law § 309-b(1) almost exactly, it constitutes a certificate of conformity (see Real Property Law § 309-b[1]; Midfirst Bank v Agho, 121 AD3d at 350-351).

"A referee . . . before entering upon his [or her] duties, shall be sworn faithfully and fairly to do such acts and make such determination and report as the order requires" (CPLR 4315). "The oath may be waived upon consent of all parties" (id. § 4315). Here, BP Hatzlucha's conduct during and after the referee's hearing indicates that BP Hatzlucha "impliedly waived the oath requirement" (Flotteron v Steinberg, 106 AD2d 427, 427).

"At any stage of an action . . . the court may permit a mistake, omission, defect or irregularity . . . to be corrected, upon such terms as may be just, or, if a substantial right of a party is not prejudiced, the mistake, omission, defect or irregularity shall be disregarded" (CPLR 2001). Here, although the plaintiff initially failed to submit the transcript from the referee's hearing with its motion to confirm the referee's report and for a judgment of foreclosure and sale, it submitted that transcript in its reply papers, and the Supreme Court properly considered it (see Pavane v Marte, 109 AD3d 970, 970-971). The plaintiff demonstrated that BP Hatzlucha received the transcript before the plaintiff moved, inter alia, to confirm the referee's report, and the plaintiff's omission of the transcript from its initial motion papers did not prejudice BP Hatzlucha (see id. at 971; Mazzarelli v 54 Plus Realty Corp., 54 AD3d 1008, 1008).

BP Hatzlucha's remaining contentions are either unpreserved for appellate review or without merit.

AUSTIN, J.P., CONNOLLY and IANNACCI, JJ., concur.

BARROS, J., dissents, and votes to reverse the order and judgment of foreclosure and sale, on the law, deny the plaintiff's motion to confirm the referee's report and for a judgment of foreclosure and sale, deny those branches of the plaintiff's motion which were for summary judgment on the complaint insofar as asserted against the defendant BP Hatzlucha Management Corp. and to appoint a referee to compute the amount due to the plaintiff, and to modify the order dated June 5, 2017, accordingly, with the following memorandum:

At issue on this appeal is whether, in support of its motion, inter alia, for summary judgment, the plaintiff established its prima facie entitlement to judgment as a matter of law dismissing the affirmative defense and counterclaim of the defendant BP Hatzlucha Management Corp. (hereinafter BP Hatzlucha) asserting that this action is time-barred. The plaintiff contends that its predecessor, Option One Mortgage Corporation (hereinafter Option One), lacked standing to commence a 2006 foreclosure action, and, therefore, did not validly accelerate the mortgage debt and start the running of the statute of limitations at that time. As set forth herein and under the circumstances of this case, the plaintiff, whose rights to enforce the note are derived from Option One's contractual relationship with the defendant Mannes Rudman, should be judicially estopped from challenging Option One's standing in the 2006 action for purposes of avoiding the statute of limitations.

In any event, contrary to the majority's determination, the plaintiff failed to meet its prima facie burden since it did not submit any evidence demonstrating, among other things, that Option One, who was the original lender in direct privity with Rudman, physically delivered the note to Residential Funding Company, LLC (hereinafter Residential), prior to commencement of the 2006 foreclosure action. As such, the plaintiff failed to show, prima facie, that Option One was not the noteholder with authority to accelerate the mortgage debt upon commencement of the 2006 action.[FN1]

On April 5, 2006, Rudman executed a note with Option One in the sum of $598,500. The note was secured by a mortgage on real property located in Brooklyn. By summons and complaint filed October 24, 2006, Option One commenced an action to foreclose the mortgage (hereinafter the 2006 action), alleging that Rudman delivered it the note, that Rudman defaulted under the terms of the note and mortgage, and that Option One elected to call due the entire amount secured by the mortgage. In a sworn attorney verification attached to the 2006 complaint, counsel for Option One averred that certain matters in the complaint were based upon "the original note, mortgage and/or financial statements, together with correspondence" (emphasis added). In November 2007, a judgment of foreclosure and sale was entered in the 2006 action. In March 2012, Rudman transferred the subject property to BP Hatzlucha. By order dated March 28, 2013, the Supreme Court granted Option One's motion, inter alia, to vacate the judgment of foreclosure and sale and to voluntarily discontinue the 2006 action.

In December 2015, the plaintiff commenced this action to foreclose the mortgage against BP Hatzlucha, among others. BP Hatzlucha interposed an answer asserting, inter alia, an affirmative defense based upon the expiration of the statute of limitations, and a counterclaim under RPAPL 1501(4) seeking to quiet title based upon the expiration of the statute of limitations.

The plaintiff moved, inter alia, for summary judgment on the complaint insofar as asserted against BP Hatzlucha, to dismiss the affirmative defenses and counterclaims, and to appoint a referee to compute the amount due to the plaintiff. The plaintiff argued that BP Hatzlucha's affirmative defense and counterclaim asserting that this action is time-barred should be dismissed. In this regard, the plaintiff contended that its predecessor, Option One, did not have standing to commence the 2006 action and, therefore, did not validly accelerate the mortgage debt. As such, the statute of limitations never began to run (see MLB Sub I, LLC v Grimes, 170 AD3d 992, 993; Wells Fargo Bank, N.A. v Burke, 94 AD3d 980, 983).

In support of its motion, the plaintiff produced an assignment of mortgage which was executed on April 13, 2006, and made effective on October 23, 2006 (hereinafter the 2006 assignment), reciting, inter alia, that Option One "has endorsed said note" and "hereby assign[s] and transfer[s]" it to Residential. The plaintiff argued that, given the assignment's effective date of October 23, 2006, Option One was no longer the noteholder when it commenced the action on October 24, 2006, and therefore lacked authority to accelerate the mortgage debt at that time (see MLB Sub I, LLC v Grimes, 170 AD3d at 993; Wells Fargo Bank, N.A. v Burke, 94 AD3d at 983). Based upon the 2006 assignment, which was produced in this 2015 action, the Supreme Court determined that Option One lacked standing in the 2006 action, and, therefore, granted the plaintiff's motion, inter alia, for summary judgment. The court issued an order and judgment of foreclosure and sale, upon the order, among other things, directing the sale of the subject property, and BF Hatzlucha appeals. I vote to reverse the order and judgment of foreclosure and sale.

Under our jurisprudence, the commencement of a foreclosure action is ineffective to constitute a valid exercise of the option to accelerate a mortgage debt where the plaintiff did not have standing to commence the foreclosure action (see MLB Sub I, LLC v Grimes, 170 AD3d at 993; Wells Fargo Bank, N.A. v Burke, 94 AD3d at 983). Thus, where a prior action has been dismissed by a court for lack of standing (see J & JT Holding Corp. v Deutsche Bank Natl. Trust Co., 173 AD3d 704, 706; U.S. Bank N.A. v Gordon, 158 AD3d 832, 836) or discontinued for lack of standing (see Wells Fargo Bank, N.A. v Burke, 94 AD3d 980), this Court has determined that the statute of limitations did not begin to run upon commencement of those actions. In those two scenarios—a [*4]dismissal or discontinuance—the defendant has successfully argued lack of standing, or the plaintiff has taken the unequivocal overt act of voluntarily discontinuing the action (see Freedom Mtge. Corp. v Engel, 37 NY3d 1, 25).

In contrast to those scenarios, here, the plaintiff seeks to now litigate the issue of its predecessor's standing in the 2006 action in order to avoid the statute of limitations. This raises various substantive and procedural issues, including whether a plaintiff should be judicially estopped from challenging its predecessor's standing where, as here, the issue of standing was never determined or even called into question in the prior action, and whether it is even proper for a plaintiff to select documentation that was never introduced in the prior action to challenge its predecessor's standing. Conducting a historical reconstruction of a predecessor's standing, wherein courts are presented with documents that are generally unreliable in cases commenced and resolved many years ago, makes it so that the timeliness issue cannot be ascertained with any degree of certainty (see Freedom Mtge. Corp. v Engel, 37 NY3d at 31).

"A foreclosure action is equitable in nature and triggers the equitable powers of the court" (Rajic v Faust, 165 AD3d 716, 717 [internal quotation marks and brackets omitted]; see Onewest Bank, FSB v Kaur, 172 AD3d 1392, 1393-1394). "Once equity is invoked, the court's power is as broad as equity and justice require" (Onewest Bank, FSB v Kaur, 172 AD3d at 1394 [internal quotation marks omitted]).

When the affirmative defense of standing is never raised by a defendant in a mortgage foreclosure action, the defense is deemed waived (see US Bank N.A. v Nelson, 36 NY3d 998, 999; GMAC Mtge., LLC v Coombs, 191 AD3d 37, 46-47; Wells Fargo Bank Minn., N.A. v Mastropaolo, 42 AD3d 239, 244). When standing has been waived, the plaintiff may obtain a judgment of foreclosure and sale without having to plead or prove standing (see US Bank N.A. v Nelson, 36 NY3d at 999). Thus, when standing has been waived, the plaintiff's lack of standing is no impairment to the valid acceleration of the mortgage debt in a complaint seeking to foreclose a mortgage (see Freedom Mtge. Corp. v Engel, 37 NY3d at 25 [suggesting that mere technical deficiencies in a complaint do not impair the valid acceleration of the mortgage debt]; GMAC Mtge., LLC v Coombs, 191 AD3d at 47 [holding that RPAPL 1302-a did not "disturb well-settled case law holding that a party's lack of standing does not constitute a jurisdictional defect, and that the defense of standing should not be raised by a court, sua sponte"]).

Here, Rudman waived the affirmative defense of standing in the 2006 action. The plaintiff's predecessor Option One alleged that it was the original lender and noteholder, and expressly elected to accelerate the mortgage debt (see Wilmington Sav. Fund Socy., FSB v Matamoro, 200 AD3d at 90-91 [recognizing that the original lender in direct privity with the defendant has standing to commence a mortgage foreclosure action]). Option One's complaint in the 2006 action was accompanied by a sworn verification stating that counsel reviewed the original note. Given Rudman's contractual relationship with Option One, from whom he borrowed money and obtained the mortgage, Rudman had no reason to challenge Option One's standing. Ultimately, based upon the uncontroverted allegations in its 2006 complaint, Option One obtained a judgment of foreclosure and sale in the 2006 action.

The plaintiff, who is an assignee of the mortgage and note, acquired no rights greater than those of Option One, and took its assignment subject to all defenses and counterclaims which the defendants had against Option One (see New York & Presbyt. Hosp. v Country-Wide Ins. Co., 17 NY3d 586, 592-593; Muller v Kling, 209 NY 239, 243; Everhome Mtge. Co. v Aber, 195 AD3d 682, 687; U.S. Bank N.A. v Denisco, 96 AD3d 1659, 1661; State St. Bank & Trust Co. v Boayke, 249 AD2d 535). As such, the plaintiff, as an assignee, is bound by Option One's assertion in the 2006 complaint that it was the original lender and noteholder and that it elected to call the entire mortgage debt due (see generally Everhome Mtge. Co. v Aber, 195 AD3d at 687), and should be precluded from now adopting a different position for purposes of avoiding the statute of limitations (see Secured Equities Invs. v McFarland, 300 AD2d 1137 [assignee judicially estopped from claiming that there was never a proper acceleration of the mortgage for purposes of avoiding the statute of limitations]).

Assuming, arguendo, that it is necessary to engage in a historical reconstruction of Option One's standing in the 2006 action so as to determine whether the statute of limitations has expired (cf. Freedom Mtge. Corp. v Engel, 37 NY3d at 31), there are triable issues of fact as to whether Option One had standing in the 2006 action.

There is some language in the recent decisions from the Court of Appeals indicating that a plaintiff has standing in a mortgage foreclosure action only when it is a noteholder (see Freedom Mtge. Corp. v Engel, 37 NY3d at 19 [referring only to "noteholders"]; Aurora Loan Servs., LLC v Taylor, 25 NY3d 355, 361-362 [referring to the "holder of the note" as having standing]; see also UCC 1-201[b][21][A] [defining holder of a note]).

However, the departments of the Appellate Division hold that a plaintiff may establish standing when it is either the holder or assignee of the note (see Beneficial Homeowner Serv. Corp. v KeyBank N.A., 177 AD3d 1253, 1255; Goldman Sachs Mtge. Co. v Mares, 166 AD3d 1126, 1129; Deutsche Bank Natl. Trust Co. v Idarecis, 133 AD3d 702, 703; Bank of N.Y. v Silverberg, 86 AD3d 274, 279; U.S. Bank, N.A. v Collymore, 68 AD3d 752, 754). As my colleagues in the majority point out, in Merritt v Bartholick (36 NY 44 [1867]), a case decided nearly a century before this State's adoption of the Uniform Commercial Code in 1962, the Court of Appeals held that a transfer of the mortgage without the debt is a nullity. In reaching that conclusion, the Court of Appeals stated, in dicta, that "[u]nless then, the bond was, in effect, assigned with the mortgage," the assignee obtained no interest in the mortgage (id. at 45 [emphasis added]). The Court, however, did not define what it meant by "in effect assign[ ]" the bond, and did not expressly address whether a note may be enforced by one who is "assigned," but who does not have physical possession of, the note.

More recently, in 2015, in Aurora Loan Servs., LLC v Taylor (25 NY3d at 361), the Court of Appeals expressly relied upon a reporter's note to section 5.4 of Restatement [Third] of Property [Mortgages] for the same proposition stated in Merritt v Bartholick (36 NY 44). That same reporter's note states that "[o]wnership of a contractual obligation can generally be transferred by a document of assignment . . . . However, if the obligation is embodied in a negotiable instrument, a transfer of the right to enforce must be made by delivery of the instrument" (Restatement [Third] of Property [Mortgages] § 5.4, Reporter's Note, Comment b [emphasis added]).

Even so, under the Appellant Division jurisprudence, it has been held that a person who has been assigned the note, but who does not have physical possession of it, has standing to enforce the note by commencing a mortgage foreclosure action (see Beneficial Homeowner Serv. Corp. v KeyBank N.A., 177 AD3d at 1255 [where there is an "effective assignment of both the mortgage and the note, physical delivery of the note is not required for the assignee to lawfully take action on the mortgage"]; Goldman Sachs Mtge. Co. v Mares, 166 AD3d at 1129 [plaintiff established standing by proving that it had been assigned note before commencement even though precluded from submitting evidence of physical possession of note]).

At the same time, a person who has physical possession of a properly endorsed note, whether or not he or she is the owner of the note, also has standing to enforce the note in [his or her] own name by commencing a mortgage foreclosure action (see UCC 3-301; Bank of N.Y. Mellon Trust Co., NA v Obadia, 176 AD3d 1020, 1023). In my opinion, the Appellate Division jurisprudence on standing raises concerns because it fails to protect the maker of the note, i.e., the borrower, who has paid an assignee from a subsequent claim by a holder in due course (see UCC 3-305), against whom a defense of discharge upon payment is not available (see UCC 3-602; 3-603; Bank of N.Y. Mellon v Deane, 41 Misc 3d 494 [Sup Ct, Kings County 2013]). Notably, this jurisprudence puts New York out of step with 49 other states that require a physical delivery of the note to accompany an assignment (see Bank of N.Y. Mellon v Deane, 41 Misc 3d 494).

Here, contrary to the majority's determination, the 2006 assignment demonstrates nothing more than that, under Appellate Division jurisprudence, Residential, as the assignee of the note, was entitled to enforce the note as of the day before Option One's commencement of the 2006 foreclosure action. However, the issue on this appeal is not whether Residential had standing, but, [*6]rather, whether the plaintiff established, prima facie, that Option One lacked standing. The 2006 assignment does not negate Option One's uncontroverted allegation in the 2006 complaint that it was the original lender and noteholder, which allegation on its face evinced a valid basis for standing (see Wilmington Sav. Fund Socy., FSB v Matamoro, 200 AD3d at 90-91).

The plaintiff and my colleagues in the majority further rely upon preprinted language on the 2006 assignment stating, in boilerplate fashion, that the note was endorsed. The plaintiff and the majority imply that Residential became the holder of the note merely through an endorsement. However UCC 3-202(1) provides that a note payable to order, as here, is "negotiated by delivery with any necessary indorsement" (emphasis added). An endorsement is incomplete and may be disregarded and ignored until the note is physically delivered (see Hall v Bank of Blasdell, 306 NY 336, 342; Bank of N.Y. Mellon Trust Co., NA v Obadia, 176 AD3d at 1023). The plaintiff here failed to submit any evidence of a physical delivery of the note from Option One to Residential.

Notably, despite the recitation in the 2006 assignment that the note was endorsed, no endorsements appear on the face of the note itself even though there is ample blank space (see U.S. Bank N.A. v Moulton, 179 AD3d 734, 737 ["(a)n allonge may be needed when there is insufficient space on the document itself for the endorsements; as long as the allonge remains firmly affixed to the note, it becomes a part of the note"]). Rather, an undated endorsement from Option One payable to the order of Residential appears on an allonge. The 2006 assignment does not mention the existence of an allonge, specify the date or type of endorsement on the allonge, and, most critically, does not indicate whether the note was ever physically delivered to Residential.

The plaintiff did not submit papers from the 2006 action evincing that the note along with the allonge was ever submitted to the court in that action. The plaintiff did not submit any evidence, such as an affidavit or testimony from a person with knowledge, as to whether the note was physically delivered from Option One to Residential (see Aurora Loan Servs., LLC v Taylor, 25 NY3d at 361; U.S. Bank N.A. v Moulton, 179 AD3d at 737-738; McCormack v Maloney, 160 AD3d 1098, 1099-1100).

Thus, contrary to my colleagues' conclusion, the 2006 assignment does not, alone, negate that Option One, which was the original lender and noteholder within the meaning of UCC 1-201(b)(21)(A), may have had standing in the 2006 action.

Further contradicting its own claim that Option One lacked standing in the 2006 action, the plaintiff also submitted a copy of the complaint filed by Option One on October 24, 2006, which specifically alleges that Option One was the original lender and noteholder and that it elected to accelerate the mortgage debt. After filing that complaint, Option One later obtained a judgment of foreclosure and sale in 2007. That judgment was not vacated until 2013, and the reasons for vacatur are not apparent on this record. Nothing in the record suggests that Residential, as the owner of the note, ever challenged Option One's right to enforce the note in the 2006 action, or otherwise. Indeed, the course of proceedings suggests quite the opposite, i.e., that Residential acquiesced, and thus, ratified Option One's election to accelerate the mortgage debt.

Thus, viewing the evidence in the light most favorable to the nonmoving party and affording such party the benefit of every favorable inference, documentation submitted by the plaintiff, at most, raises a triable issue of fact as to whether Option One was the noteholder when it commenced the 2006 action. As such, the plaintiff failed to establish, prima facie, that Option One's purported acceleration of the mortgage debt in 2006 was invalid as a matter of law. Accordingly, the Supreme Court should have denied those branches of the plaintiff's motion which were for summary judgment on the complaint insofar as asserted against BP Hatzlucha and to appoint a referee to compute the amount due to the plaintiff, regardless of the sufficiency of BP Hatzlucha's opposition papers (see Winegrad v New York Univ. Med. Ctr., 64 NY2d 851, 853).

There is need for clarity and consistency in contracts affecting real property ownership and the application of the statute of limitations (see Freedom Mtge. Corp. v Engel, 37 [*7]NY3d at 19). Thus, acceleration of the maturity of the mortgage debt may only be accomplished through an "overt, unequivocal act" (id. at 27). The filing of a complaint by Option One, the original lender in direct contractual privity with Rudman, seeking a mortgage foreclosure, is such an unequivocal overt act evincing a contractual election to accelerate the mortgage debt (see id. at 23). As the original lender in direct privity with Rudman, Option One was unquestionably a noteholder. Given the contractual relationship, Rudman would have had no reason to, and did not, challenge Option One's standing. Option One's uncontroverted allegations in the 2006 complaint were sufficient to obtain a judgment of foreclosure and sale. The plaintiff, whose rights to enforce the note are derived from Option One's contact with the borrower, should not now, for the first time, be permitted to select documentation from its file, which may not have even been submitted in the 2006 action, to undermine Option One's standing in the 2006 action so as to avoid the statute of limitations. The majority's approach in permitting plaintiffs in residential mortgage foreclosure actions to avoid the statute of limitations by challenging their predecessor's standing in a prior foreclosure action, where the predecessor's standing had never been determined, will only create further uncertainty in the application of the statute of limitations due to the perplexity of the standing jurisprudence. This process, which would in many cases require courts to hold evidentiary hearings on the plaintiff's predecessor(s)' standing in prior foreclosure action(s), wastes limited judicial resources on the most neglected residential mortgage foreclosure actions.

Accordingly, I vote to reverse the order and judgment of foreclosure and sale, deny the plaintiff's motion to confirm the referee's report and for a judgment of foreclosure and sale, and deny those branches of the plaintiff's motion which were for summary judgment on the complaint insofar as asserted against BP Hatzlucha and to appoint a referee to compute the amount due to the plaintiff.

Maria T. Fasulo

Clerk of the Court

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Can a Mortgage Holder with a Defectively-Executed Mortgage Assignment Succeed in a Foreclosure Case?

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It is common for the plaintiff in a foreclosure case to have acquired the note and mortgage from the original lender. Typically, the original note holder transfers its rights in the note by indorsing the original note or signing an allonge 1 and then delivering the original note to the new note holder. 

The original note holder also executes an assignment of the mortgage, which is then filed in the county records. When the new note holder files a foreclosure action, it alleges it is the holder of the note and mortgage, and attaches those documents as exhibits to the complaint. 

Can a borrower defend a foreclosure by challenging the validity of the indorsement, or allonge, or the assignment of the mortgage? This issue was illuminated in an April 13, 2017 Ohio appeals court decision in Deutsche Bank Natl. Trust Co. v. Baxter . 2  

Ohio courts are required to scrutinize the plaintiff's documents to decide whether the plaintiff can enforce the note or mortgage, according to a 2012 Ohio Supreme Court decision. 3 In the Baxter case, the plaintiff claimed to have acquired the note and mortgage from the original note holder, New Century Mortgage Corporation. As part of the evidence, the plaintiff presented the original note, which contained an indorsement in blank, i.e. signed on behalf of New Century without identifying the new holder. As the party in possession of the note, the plaintiff claimed it was entitled to enforce the note. The mortgage had been assigned to the plaintiff in 2009, on behalf of New Century under a power of attorney.

The borrower challenged both the assignment of the mortgage and the indorsement of the note, because New Century had filed bankruptcy in 2007. Under bankruptcy law, filing for bankruptcy revokes a power of attorney. The mortgage assignment had been executed in 2009, two years after the power of attorney had been revoked by the bankruptcy filing. The indorsement of the note was undated, and therefore it may or may not have been executed after the bankruptcy filing.

The court decided the issue of whether the indorsement of the note had been executed prior to or after New Century's bankruptcy filing was irrelevant, because at the time the plaintiff filed the foreclosure complaint, the plaintiff was in possession of the original note indorsed in blank. This proved the plaintiff was entitled to enforce the note.

The assignment of the mortgage, which was executed after New Century's bankruptcy filing, was probably defective due to being signed by an attorney-in-fact under a revoked power of attorney. Nevertheless, the court reiterated that under Ohio law, the mortgage "follows the note" it secures. The physical transfer of a note indorsed in blank is an equitable assignment of the mortgage, regardless of whether the mortgage is validly assigned. Because the plaintiff had the original note, the fact that the mortgage assignment was not executed by an authorized signer was irrelevant. (Please Note: The same should be true even if no assignment had been executed at all, although we recommend obtaining and recording a valid assignment of the mortgage, in addition to obtaining a valid transfer of the original note.)

The court in the Baxter case added a second roadblock to the mortgagor's attempted defense, by reiterating Ohio law that a mortgagor lacks standing to challenge a mortgage assignment if the mortgagor is not a party to, or a third-party beneficiary of, the assignment. Because of this, the claim that the mortgage was not properly assigned, was immaterial.

The plaintiff filed its foreclosure in 2009 and attached a copy of the note without any indorsement, as an exhibit. In that original case, the plaintiff was granted a judgment, but the judgment was subsequently declared void and the case was dismissed because the assignment of the mortgage was not signed by an authorized signer, and there was no indorsement of the note. 

The plaintiff refiled the complaint, attaching the indorsed note as an exhibit. It took over seven years from the plaintiff’s original foreclosure filing date, to finally obtain this favorable Ohio appeals court decision.

Upon acquiring a loan, due diligence should always be performed to ensure the valid execution of documents transferring the note and mortgage. Although the plaintiff ultimately won in the Baxter case, the plaintiff could have avoided a seven-year litigation quest and substantial attorneys' fees by performing that due diligence.

For more information, please contact Larry R. Rothenberg, Esq . Mr. Rothenberg is an attorney with more than 35 years of legal experience who has been recognized by Martindale-Hubbell as a leader in his field, and has been selected in multiple editions of Ohio Super Lawyers. He is a shareholder in Weltman’s Real Estate Default Group in Cleveland, Ohio.

1 A separate page attached to the note 2 Deutsche Bank Natl. Trust Co. v. Baxter , 2017-Ohio-1364 3 Fed. Home Loan Mtge. Corp. v. Schwartzwald , 134 Ohio St.3d 13, 2012-Ohio-5017, 979 N.E.2d 1214 4 ORC §1303.25 (UCC 3-205).

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What is an Assignment of Mortgage?

In real estate, an assignment of mortgage is the transfer of a mortgage, or mortgage note , to another party which typically happens on the servicing side or lender side. This is commonly seen one when lender sells or transfers your mortgage to another lender. Lenders typically have the right to to sell mortgages and assign them to new parties, but don’t typically allow borrowers to do the same. When a borrower transfers their mortgage obligation to a new party, this is called an assumed mortgage.

Assignment of Mortgage Examples

Examples where you will find assignment of mortgages include:

  • Example 1. A lender selling your mortgage to another lender for servicing.

Here’s Property Shark’s definition of assignment of mortgage .

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  • / D2-3.4-03, Assignment of a Mortgage Loan to the Insurer or

D2-3.4-03: Assignment of a Mortgage Loan to the Insurer or Guarantor (11/12/2014)

Introduction.

This topic contains the following:

  • Assignment of a Conventional Mortgage Loan to the Mortgage Insurer 
  • Assignment of a HUD or VA Mortgage Loan to the Insurer or Guarantor 

Assignment of a Conventional Mortgage Loan to the Mortgage Insurer

If the mortgage insurer exercises a right under the master policy to acquire a delinquent conventional first lien mortgage loan, the servicer must assign the mortgage loan to the mortgage insurer and take whatever action is necessary to obtain payment under the insurance policy.

If the mortgage insurer instructs the servicer to assign an insured delinquent second lien conventional mortgage loan to it rather than continuing the foreclosure process, the servicer must prepare the necessary legal documents to assign the second lien mortgage loan and file a claim under the insurance contract.

See the Investor Reporting Manual for reporting the assignment to Fannie Mae.

Assignment of a HUD or VA Mortgage Loan to the Insurer or Guarantor

If the mortgage insurer or guarantor exercises its right under the policy to acquire a delinquent government mortgage loan or an assignment is the only way to liquidate a mortgage loan, the servicer must

assign the mortgage loan to the insurer or guarantor and take required follow-up actions in compliance with applicable regulations and procedures,

file a claim with the insurer or guarantor, and

report the assignment to Fannie Mae. See the Investor Reporting Manual for reporting the assignment to Fannie Mae.

Fannie Mae will hold the servicer accountable for any loss Fannie Mae incurs because it failed to assign a VA-guaranteed mortgage loan for refunding when the VA instructed it to do so.

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As at ${p5.dateJour|date:"full":"en" } : ${p5.tauxBase|percent:"true"} + ${p5.ecart|percent:"true"} =  ${p5.taux|percent:"true"}

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IMAGES

  1. FREE 9+ Sample Assignment of Mortgage Templates in PDF

    corporate assignment of mortgage

  2. FREE 9+ Sample Assignment of Mortgage Templates in PDF

    corporate assignment of mortgage

  3. Assignment Mortgage Form

    corporate assignment of mortgage

  4. FREE 9+ Sample Assignment of Mortgage Templates in PDF

    corporate assignment of mortgage

  5. FREE 9+ Sample Assignment of Mortgage Templates in PDF

    corporate assignment of mortgage

  6. Assignment of Mortgage Template Form

    corporate assignment of mortgage

COMMENTS

  1. Understanding the Assignment of Mortgages: What You Need To Know

    An assignment of mortgage is when your original lender transfers your mortgage account and interests to a new lender. It can change who you make your payments to, how the foreclosure process works, and the terms of your loan. Learn the basics, requirements, effects, and notice of this process from Upsolve, a nonprofit tool that helps you file bankruptcy for free.

  2. Assignment of Mortgage Laws and Definition

    Legal Topics Real Estate Law Mortgages Mortgage Assignment Laws and Definition Mortgage Assignment Laws and Definition Where You Need a Lawyer: Zip Code or City: Chicago, IL 60290 Chicago HTS, IL 60411 Chicago Heights, IL 60411 Chicago Lawn, IL 60629 Chicago Ridge, IL 60415 (This may not be the same place you live) Choose a Legal Category:

  3. Understanding How Assignments of Mortgage Work

    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.

  4. What Is Corporate Assignment of a Mortgage?

    A corporate assignment of a mortgage occurs when the legal obligation of a loan for a piece of property is transferred to another party, usually a corporation. Learn how this occurs during the foreclosure process or when the borrower assigns the mortgage to a third-party corporation, and what are the legal and financial implications of this transfer.

  5. What Is Assignment Of Mortgage?

    An assignment of mortgage is a legal term that refers to the transfer of the security instrument that underlies your mortgage loan − aka your home. When a lender sells the mortgage on, an investor effectively buys the note, and the mortgage is assigned to them at this time.

  6. Foreclosure Defenses: Is Your Mortgage Properly Assigned?

    An "assignment" is the document that's the legal record of the mortgage transfer from one entity to another. If you're a homeowner facing foreclosure and the lender sold your loan to a new owner but didn't complete a proper assignment of mortgage, you might be able to challenge the foreclosure in court. Facing Foreclosure?

  7. What Is a Corporate Assignment of Deed of Trust?

    A corporate assignment is simply an assignment of the deed of trust between different businesses. Since the majority of mortgages are created by banks and lending institutions and not private lenders, most assignments of deeds of trust are corporate by nature. Lender Assignments

  8. What's the difference between a mortgage assignment and an ...

    An "assignment" is the document that is the legal record of this transfer from one mortgagee to another. In a typical transaction, when the mortgagee sells the debt to another bank, an assignment is recorded, and the promissory note is endorsed (signed over) to the new bank.

  9. Understanding How Assignments of Mortgage Work

    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.

  10. ASSIGNMENT OF MORTGAGE

    TO HAVE AND TO HOLD the same unto Assignee, its successor and assigns, forever, subject only to the terms and conditions of the above-described Mortgage. IN WITNESS WHEREOF, the undersigned Assignor has executed this Assignment of Mortgage on _________________________, _______. ____________________________________ Witness (Print Name)

  11. 21st Mtge. Corp. v Rudman :: 2022

    The note was secured by a mortgage encumbering certain real property located in Brooklyn. Option One executed an assignment dated April 13, 2006, but effective October 23, 2006 (hereinafter the 2006 assignment), in which it transferred the note and the mortgage to Residential Funding Company, LLC (hereinafter Residential).

  12. Can a Mortgage Holder with a Defectively-Executed Mortgage Assignment

    The borrower challenged both the assignment of the mortgage and the indorsement of the note, because New Century had filed bankruptcy in 2007. Under bankruptcy law, filing for bankruptcy revokes a power of attorney. The mortgage assignment had been executed in 2009, two years after the power of attorney had been revoked by the bankruptcy filing.

  13. Assignment of Mortgage: Definition and Examples (2022)

    In real estate, an assignment of mortgage is the transfer of a mortgage, or mortgage note , to another party which typically happens on the servicing side or lender side. This is commonly seen one when lender sells or transfers your mortgage to another lender. ... My legal practice is focused on business transactions like general corporate ...

  14. Assignment of Mortgage definition and explanation

    Definition of "Assignment of Mortgage" The act of transferring a mortgage from one party to another is called assignment of mortgage. What does Assignment of Mortgage mean: The most common example of an Assignment of Mortgage is when a mortgage lender transfers/sells the mortgage to another lender.

  15. Ham v. Nationstar Mortgage, LLC

    Attached to the amended complaint was a "Corporate Assignment of Mortgage" dated April 9, 2008, assigning the mortgage "together with the Note" from Mortgage Electronic Registration Systems ("MERS") to Aurora. Also attached was a copy of the Note, each page of which was stamped with a certification that it was a "true and correct ...

  16. Losing the Paper

    Most mortgage loans made between 1990 and 2007 were sold on the secondary market, and then ultimately resold to securities investors through a process known as securitization. 11 As a result, the bank or mortgage company to whom the homeowner originally promised to make payments had to assign its rights in the Note,

  17. What does a Corporate Assignment of a Mortgage mean? Please read

    What does a Corporate Assignment of a Mortgage mean? Please read details and help me understand this letter my friend got. Assignor- MERS as nomiee for fremont investment & loan it's successors and assigns Assignee-Deutsche Bank as trustee.

  18. What Is A Corporate Assignment Of Mortgage

    Law summary Corporation Assignment Of Deed Of Trust Mortgage Related Assignment of Mortgage Forms for Illinois How to fill out Illinois Assignment Of Mortgage By Corporate Mortgage Holder? In search of Illinois Assignment of Mortgage by Corporate Mortgage Holder forms and completing them might be a problem.

  19. D2-3.4-03: Assignment of a Mortgage Loan to the Insurer or Guarantor

    Assignment of a HUD or VA Mortgage Loan to the Insurer or Guarantor. If the mortgage insurer or guarantor exercises its right under the policy to acquire a delinquent government mortgage loan or an assignment is the only way to liquidate a mortgage loan, the servicer must. assign the mortgage loan to the insurer or guarantor and take required ...

  20. Home Loans

    Jumbo mortgage rates are .125% above the residential rate and apply on mortgages over $1,000,000.00. All Loans Subject to Credit Approval. Home Equity Loans. Bank of Millbrook offers a Home Equity Line of Credit designed to allow you to finance a variety of things over a period of time. There is a draw down period of five years which allows you ...

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  22. Home Equity Line of Credit (HELOC)

    Subject to not exceeding the maximum line of credit amount available, i.e., 65% of the value of the property. 2. Interest rate on the All-In-One (line of credit portion) As at February 03, 2024: 7.20% + 1.00% = 8.20%. This rate is variable and corresponds to Prime + 1.00%, and is one of the lowest rates on the market.

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    More than 18 years of experience in the legal sphere. Highly experienced in pharmaceuticals, retail, manufacturing, wholesale trade. Extensive expertise in civil, IP, antitrust, corporate law, M&A, litigation. Experienced in handling complex organizational and business processes and projects. | Learn more about Denis Kulpanovich's work experience, education, connections & more by visiting ...