 Missing Assignments* The term “missing assignment” means any original unrecorded assignment in the chain of ownership of a mortgage or deed of trust, even if an unrecorded copy is available. If the original recorded assignment is lost, it is not a missing assignment. Whenever there is a “missing assignment” the remedy is a Lost Assignment Affidavit. This does not present a problem when the “missing assignment” is the assignment to the foreclosing mortgagee because the foreclosing mortgagee and assignee has personal knowledge that it acquired the mortgage. If the “missing assignment” is farther back in the chain of ownership, a Lost Assignment Affidavit may not be obtainable because the assignor and assignee no longer exist or are unlocatable . When required, in bankruptcy or foreclosure (See below), a Lost Note Affidavit explaining this should suffice. If this type of affidavit does not suffice in foreclosure, a judicial foreclosure may be necessary. In Bankruptcy, the failure to attach any necessary assignment to a proof of claim or a motion for relief may be objected to by the clerk, trustee or debtor. The Lost Assignment Affidavit should remedy the problem. If it does not, at a hearing, the mortgagee must testify and convince the Court that it is the assignee. A Judicial foreclosure can be used in any state, even if a non-judicial process is available. If a judicial foreclosure is used, assignments are not required, unless a party to the lawsuit challenges the “missing assignment”. This is very rare. Again, an appropriate Lost Assignment Affidavit is the remedy or, in the worst case, testimony at a hearing. The same is true in KY, which is only judicial and requires all assignments (decreed to be the law by most KY Master Commissioners). The remedy is the same: Lost Assignment Affidavit or testimony. A Non-Judicial foreclosure is permissible in 18 of our 26 states. Eight states (CO, ID, LA, MN, MT, OR, SD and WY), which permit non-judicial foreclosures statutorily, mandate that their non-judicial foreclosure procedure cannot be used until all assignments are recorded. A Lost Assignment Affidavit may be sufficient for a title company to insure the title obtained by such a non-judicial foreclosure. If it does not, the only remedy is a judicial foreclosure. The remaining 16 states (AK, AZ, HI, ID, MD, MO, NE, NC, SD, TN, UT, WA, WI) that allow non-judicial foreclosure do not require that all assignments be recorded. Again, although not required by statute, a title company may not insure title obtained by such a non-judicial sale, even with a Lost Assignment Affidavit. If it does not, the only remedy is a judicial sale. * This article only covers the states in which this firm is licensed and does foreclosures, creditor bankruptcy issues and evictions: AK, AZ, CO, FL, HI, ID, KS, KY, LA, MD, MN, MO, MT, NE, NC, MD, OK, OR, SD, TN, TX, UT, WA, WI, WY. |
