What's the Difference Between a Mortgage Assignment and an Endorsement (Transfer) of the Note?

When you take out a loan to buy a home, you're usually required to sign two documents: a promissory note (a "mortgage note") and a mortgage (or deed of trust). An "assignment of mortgage" and "endorsement" of the note are how these documents get transferred between banks.

Most homeowners don't really think about what happens to their mortgage after the loan closes. From then on, most simply make their monthly payments without giving it much thought. However, if you're facing a foreclosure and the foreclosing bank doesn't have the proper note endorsements or is missing an assignment of mortgage, you might have a defense to the foreclosure.

Assignments and endorsements prove who owns the mortgage debt and who has the authority (called "standing") to bring a foreclosure action.

Why Endorsements and Assignments Matter for Borrowers

Endorsements and assignments are important because they must be correctly and legally transferred for a bank to enforce the debt or proceed with foreclosure. Any gaps in the chain of endorsements or assignments might render enforcement actions, such as a foreclosure, invalid or legally challengeable.

To fully understand the difference between an assignment of mortgage (or deed of trust) and endorsement of the note, you must first know the basic terms and documents involved in a residential mortgage transaction.

Understanding Mortgage Transactions

Here's a summary of the parties and documents involved in a home loan, with more details below.

• Mortgagee and mortgagor. In a mortgage, a "mortgagee" is the lender. The mortgagee gives the loan to the "mortgagor," the homeowner/borrower.
• Loan documents. Again, the loan transaction consists of two main documents: the mortgage (or deed of trust) and a note. (From here forward, this article uses the term "mortgage" to cover deeds of trust and other similar security instruments.) The purpose of the mortgage is to provide security for the loan, which is evidenced by a note. The promissory note is the IOU that contains the promise to repay the loan. These documents are separate, and each has its own distinct set of rules that govern how they're exchanged between banks.
• Loan Transfers. Banks often sell and buy mortgages from each other. An "assignment of mortgage" is the document that is the legal record of this transfer from one mortgagee to another. In a typical transaction, when the mortgagee sells the debt to another bank, an assignment is recorded, and the note is endorsed (signed over) to the new bank.

What Is an Endorsement or Transfer of the Mortgage Note?

A "promissory note" is a document in which a borrower promises to repay a loan. (In the context of a home loan transaction, the promissory note is technically a "mortgage note.") It is a negotiable instrument and can be sold or transferred. When a loan changes hands, the promissory note is endorsed (signed over) to the new owner of the loan. A note endorsement transfers the debt itself and the right to collect payments and enforce the debt.

An endorsement might be to a specific entity, like a bank. Or, in some cases, the note is endorsed in blank, which makes it a bearer instrument under Article 3 of the Uniform Commercial Code. So, any party that possesses (holds) the note has the legal authority to enforce it.

The endorsement is on the note itself or on a document attached to the note, called an "allonge." A note endorsement, unlike an assignment of mortgage, isn't recorded in the public records.

What Is a Mortgage Assignment?

A "mortgage" is the security instrument that gives the lender a lien on the property. The mortgage is the document that pledges the property as security for the debt (it ties the debt to the home) and permits a lender to foreclose if the borrower fails to make the monthly payments.

An assignment of mortgage transfers all the original mortgagee's interest under the mortgage, including the lien and the right to foreclose if the borrower defaults, to the new bank. It is supposed to be recorded with the county to reflect who holds the mortgage interest. Generally, the mortgage is recorded shortly after the mortgagors sign it, and if the mortgage is subsequently transferred, each assignment is supposed to be recorded in the county land records.

Endorsement vs. Mortgage Assignment – Key Differences

Example of a Note Endorsement and an Assignment of Mortgage

Bank A decides to sell a mortgage loan to Bank B. So, it first endorses the promissory note (the borrower's legal promise to repay) by signing it over to Bank B, either through a blank endorsement (making it payable to any holder) or a special endorsement (explicitly naming Bank B). This endorsement transfers Bank A's right to collect payments to Bank B.

Bank A executes a separate assignment of mortgage. This step legally transfers the security interest (the lien on the property) to Bank B. The assignment is recorded in local land records to publicly establish Bank B's lien rights.

Bank B then notifies the borrower of the transfer, providing updated payment instructions, and the borrower's loan terms remain unchanged. Without completing both steps (both a proper note endorsement and a recorded mortgage assignment), Bank B risks lacking the legal right to collect payments or foreclose. Proper execution of both documents ensures Bank B can enforce the loan by collecting payments or foreclosing if the borrower fails to make the payments.

Foreclosure Defenses Based on Endorsements and Assignments

Many people assume that endorsement of the note and an assignment of mortgage always occur simultaneously. But sometimes, the transferring bank doesn't execute both documents, or documents get lost. Improper handling of loan transfers (for example, assigning the mortgage without endorsing the note or losing the promissory note, which had the endorsements) can create legal vulnerabilities in foreclosures.

Missing Endorsements

Under most state laws, the foreclosing party must have the authority to enforce the note. So, an entity that owns the loan but can't prove it with an endorsement on the promissory note doesn't have standing to initiate a foreclosure.

Because foreclosure requires ownership of the note, homeowners can demand proof that the foreclosing entity legally holds the note. This defense to foreclosure is sometimes called the "produce the note" defense.

In judicial foreclosures, courts often require that the foreclosing party to produce the original note, including all endorsements, with original signatures to the court when entering judgment. An authentic, non-defective note, including all endorsements, is required to establish standing to enforce the note and foreclose. A copy of the note won't meet this requirement unless the foreclosing party submits a lost note affidavit, which meets certain criteria.

Breaks in the Chain of Assignments

Each time a mortgage loan changes hands, the transferring bank is supposed to assign the mortgage to the transferee bank. If an assignment of mortgage isn't recorded after a transfer or doesn't exists, there's a "break" in the chain of assignments. Courts have dismissed some foreclosure cases when the foreclosing party didn't have an assignment.

Nonjudicial foreclosure states. Nonjudicial foreclosure states sometimes require an assignment as part of the foreclosure process, and include this requirement in their state statutes. In Wyoming, for example, the assignments must be recorded before the start of a foreclosure. (Wyo. Stat. § 34-4-103 (2025).) Michigan law requires a valid chain of assignments before a nonjudicial foreclosure can proceed. (Mich. Comp. Laws § 600.3204 (2025).)

In Massachusetts, the Supreme Judicial Court affirmed a lower court's invalidation of a foreclosure sale where the foreclosing party was unable to prove that it had been assigned the mortgage at the time of the foreclosure. (U.S. Bank, N.A. v. Ibanez, 458 Mass. 637 (2011).) In this case, the foreclosing party obtained and recorded an assignment of mortgage after the foreclosure was over. However, the Supreme Judicial Court held that a foreclosing entity must have record assignment of the mortgage prior to foreclosure. (See also Bevilacqua v. Rodriguez, 955 N.E.2d 884 (Mass. 2011), which confirmed a foreclosure was void because the foreclosing bank wasn't the assignee of the mortgage at the time of foreclosure.) The court's decision in Ibanez retroactively made thousands of Massachusetts foreclosures potentially invalid because, at the time, it was standard practice to proceed with foreclosure even if there wasn't an assignment. So, Massachusetts passed a law that limits the amount of time that homeowners can challenge a foreclosure sale based on this type of error.

In another case in Massachusetts, the court held that the foreclosing party must also hold the note (or be acting on behalf of the note holder) to foreclose. (Eaton v. Fannie Mae, 462 Mass. 569 (2012).) So, in the context of a nonjudicial foreclosure in Massachusetts, the foreclosing party must be the party entitled to enforce the note and have a written assignment of mortgage to conduct a valid foreclosure.

Judicial foreclosure states. Judicial states also sometimes include a requirement that the foreclosing party have a complete chain of assignments. Under Maine's foreclosure statutes, the foreclosing party must certify proof of ownership of the mortgage note and produce evidence of the mortgage note, mortgage and all assignments and endorsements of the mortgage note and mortgage. (Me. Rev. Stat. tit. 14 § 6321 (2025).)

Some states say borrowers can't challenge assignments. However, some states don't allow borrowers to challenge the legality of assignments, saying they don't have standing.

In some states, the mortgage follows the note. And certain states follow the general rule that "a mortgage follows the note." So, a missing mortgage assignment wouldn't impact a foreclosure in those states. If the foreclosing party is clearly entitled to enforce the note, the court may allow a foreclosure to go ahead even if a valid assignment doesn't exist.

Whether a written, recorded assignment is needed ultimately depends on state law.

When Must Standing Be Acquired?

Various courts have addressed the issue of what happens when the foreclosing party doesn't have the authority to start a foreclosure but later obtains standing after the foreclosure has already begun. Most courts require the foreclosing party to have standing when it begins the foreclosure.

For example, the Ohio Supreme Court ruled that a lender must establish standing at the beginning of the suit. In this case, the plaintiff didn't have an interest in the note or mortgage when it filed a foreclosure action. Acquiring standing after the foreclosure started wasn't good enough. (See Federal Home Loan Mortgage Corp. v. Schwartzwald, 979 N.E.2d 1124 (Ohio 2012).)

In Florida, the foreclosing plaintiff must have standing as of the date it files its foreclosure complaint. Assignment of the promissory note and mortgage to the foreclosing bank after the bank files its foreclosure action is insufficient to establish standing. (See Focht v. Wells Fargo Bank, N.A., 124 So. 3d 308 (Fla. 2d DCA 2013).)

As you can see, the laws about endorsements and assignments of mortgage are complicated and vary widely from state to state.

How to Find Out Who Owns Your Mortgage

Here are a few different ways to learn your current mortgage holder's identity:

• ask your mortgage loan servicer
• use the MERS mortgage lookup, Fannie Mae lookup tool, and Freddie Mac loan-lookup tool, or
• send a qualified written request to your loan servicer.

However, it's not as straightforward to find out if the chain of mortgage assignments or endorsements are in order. You'll probably need a lawyer to help you if you think standing might be an issue in your situation.

When to Talk to an Attorney About Fighting a Foreclosure

During the foreclosure crisis, attorneys representing homeowners were often able to delay or block foreclosures by arguing that the ownership of the loan had not been properly proven, citing missing links in the chain of endorsements or assignments. Banks are now much more diligent about addressing any gaps before initiating foreclosure proceedings. Additionally, courts have frequently ruled against homeowners on this issue, making it harder to win a case based on standing.

That said, your case could be an exception. Remember, assignments and endorsements prove which party owns the debt and, therefore, may bring a foreclosure action. If the documentation isn't correct or complete in your case, you might have a defense against a foreclosure. Cases about the ownership of mortgages, deeds of trust, promissory notes, and the legality of foreclosure proceedings can be very difficult to argue. You'll most likely need an attorney to help you review your ability to raise a defense based on standing and argue it in court.

If you're facing a foreclosure and think the foreclosing party in your case doesn't have the right documentation, consider talking to an attorney who can give you information about the laws in your state, let you know whether an argument based on the right to foreclose is likely to be successful in your case, and give you advice about what to do in your particular circumstances.