American Land Title Association (ALTA) Practice Exam 2026 – Your Comprehensive All-in-One Guide to Success!

The assignment of a mortgage refers to the transfer of the mortgage from one party to another. This process occurs when the original lender or mortgage holder decides to transfer their rights to the mortgage to another entity or individual, typically a different lender or loan servicer. In this instance, the borrower may not change, but the party that holds the mortgage and has the right to collect payments or enforce the terms of the mortgage is different.

This concept is crucial in real estate transactions and finance, as it allows for the buying and selling of mortgage loans in the secondary market. It provides flexibility for lenders and can help improve liquidity in the mortgage market. Furthermore, it can affect the borrower, as they may be required to make payments to a new mortgage holder after the assignment takes place.

The other options address different scenarios that do not accurately define what an "assignment of a mortgage" entails. Cancellation of a mortgage refers to extinguishing the debt entirely, refinancing involves changing the terms of an existing loan possibly with the same lender, and securing a mortgage with property is about utilizing the property as collateral for the loan. None of these definitions match the focus of an assignment, which purely involves the transfer of rights and obligations related to the existing mortgage.