Assignment of Deed of Trust

An Assignment of Deed of Trust is a legal document that transfers the rights and obligations of a deed of trust from the original lender (assignor) to a new lender or beneficiary (assignee). This assignment allows the new lender to enforce the terms of the deed of trust, collect payments, and take action in case of default. Recording this assignment in the county records where the property is located is crucial to maintain a clear chain of title and ensure the enforceability of the deed of trust.

What is an Assignment of Deed of Trust?

An Assignment of Deed of Trust transfers the rights to a new owner to become the lender of record. This new lender gains the ability to:

Foreclose on the property if the borrower defaults.
Collect payments from the borrower.
Exercise loss mitigation measures, such as loan modifications or forbearance agreements.

Typically, an Assignment of Deed of Trust is recorded in the county recorder's office where the property is located. If multiple properties in different counties or states are involved, separate assignments must be recorded in each applicable jurisdiction.

Simultaneous Execution with Allonge Endorsement

The assignment is often accompanied by the simultaneous execution of an allonge endorsement to the note. This endorsement transfers the promissory note (the borrower's promise to pay) to the new lender, ensuring that both the note and the deed of trust are properly assigned.

DocSolutionUSA provides comprehensive services for preparing both the Assignment of Deed of Trust and the endorsement of the note or allonge.

Commercial Property Assignment of Deed of Trust

For commercial properties, the assignment process can be more complex:

Additional Documents: Commercial loans often include an Assignment of Rents and Leases and a UCC-1 Financing Statement in addition to the Deed of Trust.
Simultaneous Assignments: These additional documents need to be assigned simultaneously to fully transfer all rights associated with the loan.
Jurisdictional Variations: Some jurisdictions allow all documents to be assigned in a single assignment document, while others require separate assignments for each document.
UCC-3 Assignment: For the UCC-1 Financing Statement, a UCC-3 Assignment form is filed to transfer the secured interest in personal property.

Proper handling of these documents ensures that all rights and interests are legally transferred to the new lender.

Common Reasons for Assigning a Deed of Trust

Understanding why a deed of trust may be assigned is essential. Here are some common reasons:

Sale of the Loan: The original lender sells the loan to another financial institution or investor, transferring all associated rights and obligations.
Portfolio Management: Lenders may assign deeds of trust as part of restructuring their loan portfolios.
Loss Mitigation Strategies: In cases of default, lenders or servicers may assign the deed of trust out of Mortgage Electronic Registration Systems (MERS) to a securitized trust or other entity to facilitate foreclosure proceedings, as MERS itself does not have the power to foreclose.
Future Assignments: Some lenders keep the assignment "in blank" (without specifying a new assignee) for future transfer when the loan is sold.

Understanding the reasons behind assignments helps borrowers and investors navigate the implications for their loans and properties.

Avoiding Common Pitfalls: The Value of Expert Guidance

Attempting to prepare and record assignments without professional assistance can lead to errors and rejections, causing delays and legal complications. Common issues include:

Incorrect Fees: Providing a check that does not match the exact recording fees required by the county recorder's office.
Errors in the Document: Mistakes in referencing the original deed of trust, such as incorrect recording information or property descriptions.
Formatting Issues: Non-compliance with county-specific formatting requirements, including margins, font size, notary sections, and recorder sections.
Missing Information: Omitting necessary details like legal descriptions or required signatures.

Utilizing experienced professionals like DocSolutionUSA ensures that assignments are correctly prepared and recorded, avoiding these common pitfalls.

What Is Assignment in a Deed of Trust?

An assignment in a deed of trust is a legal transfer of the lender's interest in the security instrument (the deed of trust) to a new party (the assignee). The assignor (current lender) transfers all rights, title, and interest in the deed of trust to the assignee, who becomes the new lender of record.

This transfer allows the assignee to:

Enforce the deed of trust.
Collect payments from the borrower.
Initiate foreclosure proceedings if necessary.

What Is Reconveyance in a Deed of Trust?

Reconveyance is the process of releasing the borrower's property from the lien created by the deed of trust once the loan has been paid in full. It is equivalent to a Release or Satisfaction of Mortgage in states that use mortgages instead of deeds of trust.

Key points about reconveyance:

Preparation and Recording: The lender or trustee prepares a Reconveyance of Deed of Trust and records it with the county recorder's office.
Substitution of Trustee: In some cases, the trustee who originally held the deed of trust may need to be replaced before reconveyance. A Substitution of Trustee document is recorded to appoint a new trustee authorized to reconvey the deed of trust.
Combined Documents: Some jurisdictions allow a single document called "Substitution of Trustee and Full Reconveyance" to be recorded, accomplishing both actions simultaneously.

DocSolutionUSA provides services to prepare and record reconveyance documents, ensuring that the borrower's title is clear once the loan is paid off.

Difference Between Mortgage and Deed of Trust

Understanding the difference is crucial:

Mortgage

Parties Involved: Involves two parties—the borrower (mortgagor) and the lender (mortgagee).
Foreclosure Process: Foreclosure typically requires judicial proceedings, meaning the lender must go to court to foreclose on the property.
States Used: Mortgages are commonly used in states known as judicial foreclosure states.

Deed of Trust

Parties Involved: Involves three parties—the borrower (trustor), the lender (beneficiary), and the trustee.
Foreclosure Process: Allows for non-judicial foreclosure, where the trustee has the power to foreclose without court intervention.
States Used: Deeds of trust are used in states known as non-judicial foreclosure states.

Verifying Chain of Assignments of Deed of Trust

Maintaining a clear chain of assignments is essential for the enforceability of the deed of trust:

Assignment Verification Report (AVR): DocSolutionUSA offers services to verify the correct transfer of ownership through the chain of recorded assignments.
Identifying Defects: If defects are found in the chain, such as missing assignments or incorrect information, the deed of trust may not be enforceable.
Curing the Chain: DocSolutionUSA can assist in curing defects by preparing necessary corrective documents.

The AVR process involves:

Data Analysis: Using AI and machine learning to match assignors and assignees in the correct recording order.
Accuracy Verification: Ensuring that all references to the original mortgage, legal descriptions, and corrections are accurate.

Can Assignment of Deed of Trust be Fixed?

Yes, defects in the assignment chain can be corrected through various curative measures:

Corrective Assignment: Prepared to correct errors in a previously recorded assignment.
Gap Assignment: Used to fill in missing links in the chain of assignments.
Rescission of Assignment: Recorded to nullify a previously recorded assignment.
Cancellation of Assignment: Similar to rescission, used to cancel an erroneous assignment.
Lost Assignment Affidavit: Used when an assignment document has been lost and cannot be located.

DocSolutionUSA offers a range of curative services to address and fix issues within the assignment chain, ensuring the deed of trust is enforceable and the chain of title is clear.

Ensuring a Smooth Assignment Process with Professional Assistance

The Assignment of Deed of Trust is a critical component in the transfer of loan ownership and the enforceability of security interests in real estate. Due to the complexities involved and the potential for errors, professional assistance is invaluable.

DocSolutionUSA provides comprehensive services, including:

Preparation of Assignment Documents: Accurate and compliant with jurisdictional requirements.
Endorsement of Notes or Allonges: Ensuring the promissory note is properly transferred alongside the deed of trust.
Recording Services: Handling the submission and tracking of documents with county recorder offices.
Chain Verification and Curative Services: Using advanced technology to verify the chain of assignments and fix any defects.

By leveraging expert guidance, lenders, servicers, and investors can avoid common pitfalls, ensure legal compliance, and protect their interests in the property.

Secure your transactions with confidence. Contact DocSolutionUSA today to assist with your Assignment of Deed of Trust needs and ensure a smooth and legally sound transfer of your security instruments.

Frequently Asked Questions About Assignment of Deed of Trust

How long does it take to prepare an Assignment of Deed of Trust?

Preparation Time: The assignment document can typically be prepared the same day if all collateral files are available or if an Assignment Verification Report (AVR) is provided.
Recording Time: Recording times vary by county. Some counties process recordings within one day, while others may take several months. DocSolutionUSA provides tracking for all clients to monitor when the recording occurs.

What is the fee to prepare the Deed of Trust assignment document?

Preparation Fees: Fees range from $5.00 to $20.00 per document, depending on how the data is delivered to DocSolutionUSA (e.g., PDF files over SFTP, email, Excel spreadsheets with clean data, or AVR with OCR data).

What other fees are involved in Deed of Trust assignment preparation?

Recording Fees: Vary by county but average around $10.00 for a 1-3 page document.
E-Recording Convenience Fees: For counties that allow e-recording, fees range from $2.00 to $5.00.
Shipping and Handling: For counties that do not allow e-recording, fees vary based on the shipping carrier and delivery time.