Why Mortgage Assignments Get Recorded
Mortgages change hands more often than most homeowners realize. The bank that originally funded your home loan may sell it to another lender, a servicing company, or an investor. When that happens, the transfer is documented through a mortgage assignment.
An assignment of a mortgage may be recorded in like manner as a mortgage, and the record is notice to all persons subsequently deriving title to the mortgage from the assignor.
A.R.S. § 33-706Recording the assignment creates a public record of who currently holds the mortgage. This protects the new holder's interest. It also puts everyone on notice that the original lender no longer controls the loan. Without recording, a dishonest lender could assign the same mortgage to two different parties.
How This Affects Property Transfers and Trust Funding
When you transfer property into a living trust or settle an estate, title companies perform a lien search. They look at every recorded claim against the property. Recorded mortgage assignments show the current chain of ownership for any outstanding loan. The records include the docket and page number or recording number of the original mortgage.
If the assignment was never recorded, it can create confusion about who holds the debt. It also raises questions about who has authority to release the mortgage after payoff. Clean recording is one reason title searches exist. It is also one reason attorneys stress getting recordings done correctly when managing real property in an estate plan.