What constitutes a valid assignment?

UPDATED: Jul 14, 2011

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What constitutes a valid assignment?

Mortgage was assigned from one bank to another, then commenced foreclosure action. The assignment was recorded just last month (foreclosure action last year).

Asked on July 14, 2011 under Real Estate Law, Pennsylvania


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

This is a very complex area, one where the courts are still sorting out the interplay of assignment law, negotiable instrument law (if there is a promissory note involved), foreclosure law, etc. Therefore, a definitive answer, in this evolving area, is not possible, since much depends on all the specific facts. As a general matter, though, an assignment may be valid if made for good faith, even if not recorded until later; and furthermore, even if a court were to hold that it was improper to have commenced foreclosure prior to the assignment being recorded, at most that would seem to delay matters somewhat, while the action is re-filed; the lender will very likely not lose its right to ultimately foreclose because of some mistiming in recordation of assignment vs. foreclosure, assuming the assignment is fundamentally valid (e.g. for good consideration) and also that the grounds for foreclosure are valid and equitable, too (e.g. you defaulted on your mortgage).

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