What is an Assignment of Trust Deed?

By Phil M. Fowler

A trust deed is the legal term for a mortgage. It is a document that gives your mortgage lender the right to foreclose and resell your home if you default in your mortgage payments. It is common for mortgage lenders to sell and resell mortgage loans. Each time they do that, they will assign the trust deed along with selling the loan.


When you get a loan to buy your home, you sign a promissory note that says you will repay the money at a certain interest rate over a certain period of time with certain monthly payments. You will also sign a trust deed, which is a legal document that allows your lender to foreclose on your house if you don't make your mortgage payments. Lenders often sell mortgage loans and when they do, they assign the trust deed to the new lender.


You buy your home using money from a loan obtained from Bank 1. Two months later, Bank 1 sells your mortgage to Bank 2. You now make your mortgage payments to Bank 2 instead of Bank 1. When Bank 1 sold the mortgage, Bank 1 assigned the deed of to Bank 2 using an assignment of deed of trust. Bank 2 now has the right to collect your mortgage payments and, if you don't make your payments, to foreclose on your home.


It is common for mortgage loans to be sold from one bank to another several times during the life of your mortgage loan. Why this happens is a mystery to everybody except the financial experts, but somehow, banks have figured out a way to make money by transferring mortgage loans. Your trust deed can be assigned to a new lender at any time. You are obligated to the new bank, called the assignee, just as you were obligated to the old bank.


From the homeowner's perspective, it should make no difference at all when your trust deed is assigned to a new lender. Your loan terms and payments will not change. None of your legal rights change. The only thing that changes is where you send your monthly payments.


Don't worry if your trust deed (mortgage loan) is ever assigned to a new lender. There is no way you can be harmed by this. The best thing to do is just ignore all of the assignments of your loan and deed of trust, and make your payments on time to whatever lender holds your loan.