The following is my product, but you must know that I am not an attorney, and this is not legal advice - seek an attorney's advice. The answer to your question is highlighted.
Generally, a mortgage note is a negotiable instrument subject to the provisions of Uniform Commercial Code (“UCC”) Article 3. To possess the authority to enforce a negotiable instrument (here, the note), a person must demonstrate that it is the “person entitled to enforce” the note. UCC § 3-301. Obtaining “person entitled to enforce” status under UCC § 3-301 requires being (i) a “holder” of the note; (ii) a non-holder in possession who has the rights of a holder; or (iii) a person not in possession who is entitled to enforce, and pursuant to UCC § 3-309, at one time had been in possession, but cannot now reasonably obtain possession.
A “holder” is a person in possession of a note that is either made payable to that person, or made payable to the bearer of the note. UCC § 1-201(b)(21)(A). A “non-holder in possession” is a person in possession of the note by transfer, rather than negotiation.
The main difference between a “negotiation” and a “transfer” under Article 3 is whether the note was endorsed. If the note is properly endorsed by the assignor, it’s a negotiation, and the assignee is deemed a “holder” once the assignee obtains possession of the note. UCC § 3-201. If it is not endorsed, all rights in the note can still be assigned, including the right to enforce, but the assignee must prove the purpose of the delivery in order to obtain “person entitled to enforce” status. UCC 3-203(b). Thus, a “non-holder” can acquire “person entitled to enforce” status only after demonstrating a “…voluntary transfer of possession.” UCC § 1-201(b)(15). Therefore, being a "person entitle to enforce" by transfer requires that the assignor have rights in the note; that value be given; and that either the assignor execute a note-sale agreement or the assignee take possession of the note pursuant to a note-sale agreement. UCC § 9-203(b)(1-3) (the same rules apply to transactions where rights to payment are sold and transactions in which a payment right is secured by collateral).