The article seems to answer your question. But I think that you are also asking the wrong question.
There is a distinction between ownership and holdership. Ownership can be altered by contract or written assignment. Holdership is altered through negotiation which requires indorsement and delivery.
The holder has the right of enforcement.
I could sell you my lost or stolen car. You might pay for it. You might own it. But I will have difficulty delivering it to you, because it is lost or stolen.
If I sold you a lost or stolen car and didn't tell you that it was lost or stolen, then that would probably be fraud or, at best, might reflect an incomplete contract (if the sale contemplated actual delivery of the car).
If I told you that the car was lost or stolen and offered to sell it to you, with you assuming the risk as to any possible recovery, this would probably be a valid contract. By identifying the car as lost or stolen and shifting the risk of recovery to YOU, you would be buying the car, though you might never see it. (I might sign the title over to you, etc.) You have the title, but no car.
When you ask if a lost note can be assigned, the answer is probably YES. If you ask if a lost note can be negotiated or transferred in accordance with the UCC, the answer is almost certainly NO, as either negotiation or transfer contemplates delivery of the instrument.
I presume that you would not pay me full market value for my lost or stolen car (unless it was already safely parked in your garage because you stole it)! I would be skeptical that a financial institution would pay full value for a note that was lost or stolen. (Bear in mind that the note indorsed in blank is a bearer instrument and even a thief is usually entitled to enforce it! Thus the thief of a promissory note is usually in a vastly superior position to an auto thief.)
The right of enforcement stalls in the last holder before loss of the instrument. The owner of the instrument could still sell the instrument, but the buyer wouldn't be entitled to enforcement unless the instrument was found. The last holder might still act as a bailee though for the new owner and the last holder could bring an action to enforce the instrument and then bestow the proceeds on the purchaser.
A purchaser would do well to carefully consider the risks associated with such a transaction and should insist on a nice discount!