Court invalidates foreclosures based on ineffective mortgage assignments

more+
less-

Background

Multiple assignments of mortgage loans from one lender to another are common, particularly in the securitisation market where mortgage loans are pooled, sold and assigned to a securitisation trustee, then converted into mortgage-backed securities and sold to investors. The enforceability of remedies under the mortgage loan documents, including foreclosure remedies, is important to the assignee of the mortgage loan. Generally, foreclosure remedies may be exercised only by the then holder of the mortgage. In many transactions, the note and the mortgage are assigned and physically transferred, pursuant to assignment documents, to a trustee that holds the note, the mortgage and other loan documents on behalf of investors.

As discussed in the American Securitisation Forum white paper on the subject,(1) in many states, even where a mortgage is not specifically assigned to the assignee of the note, the mortgage is considered to be automatically assigned to the assignee of the note under the common law rule that 'the mortgage follows the note'. However, some states do not follow the general common law rule and require a mortgage to be specifically assigned to the assignee of the note.

Please see full article below for more information.

LOADING PDF: If there are any problems, click here to download the file.


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Katten Muchin Rosenman LLP | Attorney Advertising

Written by:

more+
less-

Katten Muchin Rosenman LLP on:

JD Supra Readers' Choice 2016 Awards
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:

Sign up to create your digest using LinkedIn*

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.

Already signed up? Log in here

*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.
×
Loading...
×
×