Quote: I've been doing some research and I'm hoping that I'm misunderstanding but here goes.
Can an Assignment of Mortgage also assign the Note without endorsing the note as long as the assignment of mortgage states that both the mortgage and note are being transferred?
A endorses Note to B - this is not a blank endorsement btw
A assigns mortgage to B
B assigns mortgage to C
C assigns mortgage to D
The note carries no other endorsements besides the A to B. From what I see, The note is in the name of B and the mortgage is in the name of D.
So how can D foreclose when they don't own the note?
Please help me understand this!!
You need to carefully study the wealth of expository posts here on the Forum about this issue, particularly posts by Mr. Roper, a leading national authority on foreclosure defense.
In short, you also need to appreciate that ownership and holdership of a negotiable instrument are distinguishable concepts.
An owner might or might not be a holder. A holder is the person or entity with a right of enforcement over a note. (There a some exceptions to this within the UCC, such as a provision allowing the last holder to enforce a lost note and for a transferee who is not a holder to enforce the note under certain circumstances.)
An owner who is not also the holder is not entitled to enforce the instrument (except in those special circumstances set forth within the UCC).
Mr. Roper has discussed this repeatedly. Permit me to give you a very simple explanation and analogy. First, realize that the UCC, which covers negotiable instruments such as promissory notes, also covers ordinary bank checks.
Suppose that A makes out a check for $500 drawn upon First Bank of Metropolis in favor of B as payee. Further suppose that B desires to cash and collect this check, but that B is very busy and unable to visit the bank (or perhaps B is disabled, etc.). One choice would be for B to deposit the check and then to draw upon the funds. Another choice would be to indorse the check to someone else who would cash the check for B and then that other person would collect the check.
But let us suppose that B is both in urgent need of the funds and also mildly suspicious that A (known for poor financial management) might spend the funds leaving the check noncollectable.
B wants to cash the check right away.
So B indorses the check in blank and gives the check to B's trusty friend, relative or employee C, asking C to present the check at A's bank and to collect the $500.
The indorsement in blank and delivery of the check from B to C is a negotiation of the instrument under the UCC. C thereby becomes the holder of the check with a right to enforce the check. But note that B is still the owner of the check. C hasn't paid B for the check or advanced any money to B. C is not at risk as to non-payment. If First Bank pays C the funds upon presentation of the check, the money belongs to B. If First Bank refuses payment (because A is overdrawn, etc.), then B is at risk.
C doesn't really have any ownership position in respect of this check and isn't really entitled to keep the proceeds.
But under the UCC, in respect of being the holder of a bearer instrument, C is entitled to enforce the instrument and can lawfully present this check to A's bank for payment.
By contrast, suppose that B indorsed the check to C (either in blank or specifically to C) and C immediately gave B the $500. In this case, C seems to not only become holder, but also becomes owner of the check, entitled to both enforce the check and to keep the proceeds.
Returning to your question, a written assignment of a mortgage or deed of trust which also includes a transfer of the note, might constitute a valid conveyance of an ownership interest in the note, but could never constitute a negotiation under the UCC, since negotiation is by indorsement and delivery.
You must also realize that for years foreclosure mill law firms and servicers have been forging assignments which purport to convey not only the mortgage or deed of trust, but also the note, and then using these forgeries as false evidence in judicial foreclosure cases.
Mr. Roper has been sounding the alarm about this for more than four years!
Enforcement of the note is ALWAYS about indorsement and delivery. The written assignments are simply part of the slight of hand used (with great success) by the foreclosure mills and servicers to obtain judgment over ignorant borrowers!
See also Mr. Roper's discussions about absence of indorsement and embracing the forged assignment!