You receive a letter from a company you have never heard of telling you that your mortgage has been transferred and you should now send your payments to a new address. A few weeks later, you check the county land records and see a new document recorded against your property. It is called a corporate assignment of deed of trust, and it names your original lender as the assignor and a different entity, often a large bank or a mortgage-backed securities trust, as the assignee. Your loan has been sold. The security instrument that gives the lender the right to foreclose has been transferred to a new owner, and the assignment is the paper trail that proves the new owner has the legal right to collect your payments and enforce the lien.
A corporate assignment of deed of trust is a recorded legal document that transfers the beneficial interest in a deed of trust from one entity to another. The original lender, called the beneficiary under the deed of trust, assigns its rights to a new beneficiary. The assignment is executed by an authorized officer of the assigning entity, notarized, and recorded in the county where the property is located. Once recorded, the assignment gives constructive notice to the world that the new beneficiary now holds the security interest in the property. The borrower’s obligation under the promissory note does not change. The terms of the loan do not change. Only the identity of the entity that has the right to collect the payments and enforce the lien changes.
Why Deeds of Trust Are Assigned — The Secondary Mortgage Market in One Paragraph
The lender who originated your loan probably did not keep it. Most mortgage loans are sold within weeks or months of origination to larger financial institutions, to government-sponsored enterprises like Fannie Mae and Freddie Mac, or to private investors through securitization trusts. The originating lender recovers its capital, earns a fee for originating the loan, and uses the proceeds to make new loans. The purchasing entity acquires a stream of income from the monthly payments and a security interest in the property. The assignment of deed of trust is the legal mechanism that transfers the security interest from the originator to the ultimate investor.
In the secondary market, a single loan may be assigned multiple times. The originator assigns to a correspondent lender. The correspondent lender assigns to a warehouse lender. The warehouse lender assigns to a securitization trust. Each step in the chain requires an assignment of deed of trust to be executed and recorded. The chain of assignments must be complete and unbroken for the entity that ultimately attempts to foreclose to have standing to do so. A missing link in the assignment chain was one of the most heavily litigated issues during the foreclosure crisis that followed the 2008 financial collapse.
MERS — The Electronic System That Complicates Corporate Assignments
The Mortgage Electronic Registration Systems, or MERS, is a private database created by the mortgage industry to track the ownership of mortgage loans and the corresponding deeds of trust without recording an assignment in the county land records every time a loan changes hands. When a loan is originated and registered with MERS, MERS is named as the nominee for the lender and its successors and assigns. The deed of trust names MERS as the beneficiary in a nominee capacity, and MERS tracks the actual beneficial owner in its electronic database. When the loan is transferred, the parties update the MERS database instead of recording a new assignment.
MERS allows the mortgage industry to avoid recording fees and county recording delays, but it creates a gap in the public record. The chain of title at the county level shows MERS as the beneficiary from origination, with no subsequent assignments recorded. If the loan goes into default and the servicer needs to foreclose, MERS executes an assignment from itself to the foreclosing entity. This assignment, sometimes called a MERS assignment or a corporate assignment from MERS, is the document that connects the public record to the entity that actually holds the loan. The person signing the assignment on behalf of MERS is typically an employee of the loan servicer, not of MERS itself. The legal validity of MERS assignments was challenged extensively during the foreclosure crisis, and while courts have largely upheld the MERS system, the procedural requirements for a valid MERS assignment vary by state.
| Assignment type | Assignor | Assignee | Typical context |
| Origination assignment | Originating lender | Correspondent or aggregator | Loan sold shortly after closing |
| Securitization assignment | Aggregator or warehouse lender | Securitization trust | Loan pooled into mortgage-backed security |
| MERS assignment | MERS (as nominee) | Foreclosing entity | Pre-foreclosure; connects MERS to actual holder |
| Corrective assignment | Prior assignor | Same assignee | Fixes error in prior assignment |
What a Corporate Assignment Means for You as the Homeowner
An assignment of deed of trust does not change the terms of your loan. Your interest rate, your monthly payment, your loan balance, and your repayment schedule remain exactly as they were before the assignment. The assignment changes who you pay and who has the legal right to enforce the deed of trust if you default. The promissory note and the deed of trust are separate legal instruments. The assignment transfers the deed of trust. The promissory note is transferred separately by endorsement and delivery, and the entity that holds the note is the entity with the right to receive payment.
You have the right under federal law to receive notice when your loan is transferred. The Real Estate Settlement Procedures Act, or RESPA, requires both the transferring servicer and the new servicer to send you a notice of servicing transfer at least fifteen days before the transfer takes effect. The notice must include the name and contact information of the new servicer, the date the transfer takes effect, and information about your right to dispute any payments during the transition. A sixty-day grace period applies during which you cannot be charged a late fee if you mistakenly send your payment to the old servicer.
The assignment of deed of trust recorded in the county records should match the servicing transfer notice you receive. If the assignment names an entity you have never heard of and you have received no transfer notice, contact your current servicer and ask for an explanation. A recorded assignment that does not correspond to a servicing transfer notice is not necessarily fraudulent, but it is worth understanding. It may reflect an internal corporate restructuring, a name change, or a transfer of the security instrument that occurred before the servicing rights were transferred.
The Chain of Assignments — Why a Break in the Chain Can Delay a Foreclosure but Not Prevent It
A complete chain of assignments from the originating lender to the entity seeking to foreclose is required for a valid non-judicial foreclosure in many states. If the entity that records the notice of default is not the entity named as the beneficiary in the most recently recorded assignment, the borrower can challenge the foreclosure on standing grounds. A missing assignment, an assignment executed by someone who lacked authority, or an assignment that was recorded after the notice of default was filed are all potential defects that can delay or derail a foreclosure.
Courts have become less sympathetic to technical assignment challenges since the foreclosure crisis, but the law still requires a valid chain of title for the security instrument. An assignment signed by a known robo-signer, an assignment that references a loan number that does not match, or an assignment that purports to transfer a deed of trust that had already been assigned to a different entity are all defects that a borrower can raise in a foreclosure defense. For a homeowner who is current on their payments, the chain of assignments is background noise. For a homeowner facing foreclosure, the chain of assignments is one of the first things a foreclosure defense attorney examines.
FAQ — Corporate Assignment of Deed of Trust
My deed of trust has been assigned four times since I bought my house. Is that normal?
Yes. A loan originated by a small mortgage broker may be assigned to a correspondent lender, then to a warehouse lender, then to a securitization trust, with each step generating an assignment. A loan serviced by a large bank may generate an assignment every time the servicing rights are transferred, even if the same investor holds the underlying loan. Multiple assignments in the chain of title are a normal feature of the secondary mortgage market. What matters is that the assignments form an unbroken chain from the original lender to the current holder.
Does an assignment of deed of trust transfer the promissory note as well?
No. The assignment of deed of trust transfers the security instrument, which is the lien on the property. The promissory note is a separate document that is transferred by endorsement, which is a signature on the note itself or on an allonge attached to the note, and by physical delivery of the original note to the new holder. The entity that holds the note has the right to receive payment. The entity named as the beneficiary in the deed of trust has the right to foreclose. In a properly documented transaction, the same entity holds both. When the two are separated, the note holder may have the right to payment but lack the standing to foreclose, and the deed of trust beneficiary may have the right to foreclose but lack the right to collect the debt.
What should I do if an assignment recorded against my property names the wrong loan or the wrong property?
Contact the entity that recorded the assignment in writing and request a corrective assignment. A recorded assignment that references the wrong loan number or the wrong legal description clouds your title and can cause problems when you sell or refinance. The entity that recorded the erroneous assignment has an obligation to correct it. If they do not respond, a real estate attorney can file a quiet title action to remove the erroneous assignment from the record. The cost of a quiet title action for an erroneous assignment is typically lower than for other title defects because the assignment is recent and the error is usually straightforward to prove.
