The U.S. District Court for the Eastern District of Pennsylvania has held that the failure to create and record written instruments evidencing assignments of mortgages and transfers of promissory notes secured by mortgages on real property in Pennsylvania is a violation of the state’s recording law. The statute provides, in pertinent part: “All deeds, conveyances, contracts, and other instruments of writing wherein it shall be the intention of the parties executing the same to grant, bargain, sell, and convey any lands… shall be recorded…” In a ruling issued on June 30, 2014, the district court concluded that a mortgage assignment is a “conveyance” subject to the recording requirements.

As for the statute’s applicability to promissory notes, the district court rejected the argument that because the transfers at issue occur by delivery of promissory notes, they are not “written instruments” subject to the statute. The district court reasoned that whether a note is transferred by a writing or a transfer of possession, by operation of law, the result is the same: an interest in and/or title to real property that secures it has been assigned and conveyed by one party to another. The district court further held that Mortgage Electronic Registration Systems, Inc. as an “undisclosed agent” of the lenders for whom it acts as a nominee, could be held responsible for the fees purportedly lost by the county recorders by not filing all assignments and transfers of promissory notes.