Loan assignment
A loan assignment transfers a loan, the note and the mortgage or deed of trust that secures it, from one lender to another. The buyer becomes the owner of the loan and the borrower’s obligation runs to them.
How a loan assignment works
A real estate loan has two parts: the promissory note (the borrower’s promise to pay) and the security instrument (the mortgage or deed of trust). To transfer the loan, the note is endorsed or transferred to the new owner, often with an allonge, and an assignment of the mortgage or deed of trust is signed and usually recorded in the county where the property sits. Under the Uniform Commercial Code, transferring the note generally carries the security interest that secures it.
Assignment at closing vs. after closing
- At closing (table funding): the capital source funds the loan at the closing table and the loan is assigned to it at closing. The originating lender never carries the loan.
- After closing (a loan sale): the lender funds the loan first, with its own money or a line, and assigns it to a buyer later, often with representations and warranties and a repurchase obligation if they prove untrue.
What the borrower sees
The borrower signs the loan with the originating lender. Who services the loan and who the borrower calls after closing depends on the loan documents and the servicing arrangement. Notice requirements depend on the loan type and state law, so follow your counsel’s guidance.
Where Lender Capital fits
Lender Capital places first-lien, business-purpose real estate loans with capital partners. You apply once, then submit each loan with the full file. We send it only to capital partners whose criteria it fits, one partner funds the whole loan at closing and it is assigned to them. You keep your points (less the placement fee), earn the spread above the partner’s rate and service the loan. You pay a placement fee only when a loan funds.
Lender Capital is a business-to-business platform. This page is general information, not legal, tax or securities advice. Terms of warehouse lines and other funding sources vary by provider; confirm them with each provider and your counsel.