Definition
Mortgage assignment is the legal mechanism by which a mortgage creditor transfers their rights on a mortgage to a third party — without necessarily obtaining the borrower's consent, unless the mortgage contract stipulates otherwise.
Common contexts:
- **Securitization**: large financial institutions assign portfolios of mortgage loans to securitization vehicles (Canada Mortgage Bonds via CMHC, or private mortgage-backed securities). The borrower notices no change in their payments. - **Portfolio sale**: a bank or B-lender sells its mortgages to another institution. The borrower receives an assignment notice and now pays the new creditor. - **Private lender**: in private loans, an investor may assign their mortgage to another investor (private secondary mortgage market).
Difference from mortgage assumption: in an assignment, the lender transfers their rights. In an assumption, the borrower transfers their obligation to a new owner upon sale.