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.
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 The other lender takes the place of the organization that originally made the loan, and the mortgage contract rules now apply to the new business.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.
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.
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?
- USLegal: Assignment of Deed of Trust or Mortgage
- 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?
- Legal Beagle: What Is the Difference Between a Deed and a Deed of Trust?
- Legal Beagle: Title Vs. Deed of Trust
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