This lesson plan may be used to address the academic standards listed below. These standards are drawn from Content Knowledge: A Compendium of Standards and Benchmarks for K-12 Education: 2nd Edition and have been provided courtesy of theMid-continent Research for Education and Learningin Aurora, Colorado.
Grade level: 9-12
Subject area: literature
Demonstrates competence in the general skills and strategies for reading a variety of literary texts.
Knows the defining characteristics of a variety of literary forms and genres.
Benchmark: Understands historical and cultural influences on literary works.
Benchmark: Understands the effects of complex literary devices and techniques on the overall quality of a work.
Grade level: 9-12
Subject area: civics
Understands the impact of significant political and nonpolitical developments on the Unites States and other nations.
Understands the principal effects that economic conditions, technological developments, and cultural developments in other nations have had on American society and the lives of American citizens.
An assignment of trust deed is a document that lenders use when they sell loans secured by trust deeds. While they can freely sell the promissory notes between themselves, the trust deeds that give them the right to foreclose have to be assigned with a legal document. Given that loan sales happen relatively frequently, assignments are relatively common occurrences.
When a lender in a state like California uses trust deeds instead of mortgages, there's actually a third party involved. When you sign your loan agreement, called a promissory note, you agree to let your bank take your house if you don't make your payments. To give your promise some legal force, you also sign a trust deed. The trust deed is a document that puts the legal ownership of your house in a trust held by a third party trustee.
As long as you make your loan payments on time, the trustee doesn't do anything until the loan is paid off. Once you make your final payment, the trustee takes the title of the property out of trust and transfers it to you, free and clear of the loan. If you don't make your payments, though, the trustee takes the title and gives it to the bank after the foreclosure process finishes.
Assigning the Deed
Periodically, lenders transfer loans between themselves. When they do, the lender that has the loan assigns the trust deed to the lender that buys the loan. This gives the new lender all of the rights to the property that came with the loan. The assignment document is recorded along with the original trust deed so that the new lender's right to the property becomes a matter of public record and is enforceable.
Why Lenders Sell
It's possible that your loan has changed hands without you knowing it. Sometimes, a lender makes a loan knowing that they'll soon sell it to a larger lender or to a government-sponsored entity. That secondary lender may intend to eventually package your loan along with other loans and sell it as a security on Wall Street. While all of this happens, the loan itself remains the same. If the company that services your loan, which is the industry's term for collecting your payments, stays the same, you might not even be aware that your loan was transferred.
About the Author
Steve Lander has been a writer since 1996, with experience in the fields of financial services, real estate and technology. His work has appeared in trade publications such as the "Minnesota Real Estate Journal" and "Minnesota Multi-Housing Association Advocate." Lander holds a Bachelor of Arts in political science from Columbia University.
- Jupiterimages/Comstock/Getty Images
Suggest a Correction