Assignment of Mortgage

• An assignment of mortgage is a legal document used to transfer a loan obligation from one party to another. For every bank loan transaction, there are two documents involved: a promissory note and a mortgage. The note includes all loan details such as repayment terms, maturity, and interest. By itself, the note is considered an unsecured debt; however, when combined with a mortgage, it becomes a secured debt, which gives a lender a secured claim to your property if you default on your loan.
  
  

Assumable Mortgage

• An assumable mortgage can also occur between a borrower and another party. If an individual has an assumable mortgage, he can legally transfer his mortgage obligation to another borrower, per the conditions of his mortgage. When a transfer of mortgage occurs between two borrowers the document must indicate the original lender, the property being transferred, name of the third party and the date of the assignment. The transfer does not need to be witnessed but must be filed with local government.
  
  

Secondary Market

• Mortgage assignments most often occur between lenders when the original lender decides to sell the promissory note in the secondary market financial market to investors. If the mortgage is sold to investors, the bank's financial claim to the homeowner's property can only be transferred with an assignment of mortgage. Likewise, the lender is obligated to notify the borrower that his loan has transferred to another lender. In addition, the transaction must be recorded with government authorities that handle ownership records and property taxes.
  
  

Transfer

• If your lender has sold you mortgage to an investor but initiated foreclosure proceedings on your home, you may be able to suspend proceedings, as the lender needs to have both the promissory note and the mortgage obligation to continue with the foreclosure. If you are a homeowner transferring you mortgage to another borrower, you should check with your lender and local government authorities to ensure that the transaction is legal and done correctly.