If a lender sells my mortgage to another lender, is the original
lender required to file a record of mortgage assignment with the office of
public records in my city?  If so, how long do they have to file such
a record with the public recorder?  I live in San Francisco,
California.  Thanks!

Dear scrowder,

There is no requirement in the California statutes or in the San
Francisco municipal code which requires a mortgage lender to record an
assignment with the office of the Assessor-Recorder for the City and
County of San Francisco.

You can review the Municipal Code for San Francisco online, through
the local government page of the website for the City and County of
San Francisco:
http://www.ci.sf.ca.us/site/government_index.asp?id=5483

You can review California Statutes through the website of the
Legislative Counsel of California:
http://www.leginfo.ca.gov/

Under California law, the purpose of recording a conveyance of real
estate is to provide others with notice of its existence. In the case
of a mortgage, this also puts future lenders on notice that the
original mortgage lender has priority, in the event it becomes
necessary to foreclose on the property. These statutory provisions are
available on the website of the Legislative Counsel of California:
http://www.leginfo.ca.gov/cgi-bin/waisgate?WAISdocID=86071010454+0+0+0&WAISaction=retrieve

California is what is called a "race notice" state, meaning that the
date upon which a conveyance is recorded can have a great deal of
significance. If you were to take out a mortgage, but for some reason
the mortgage company neglected to record it, and you subsequently took
out a second mortgage which was properly recorded, in the event of
foreclosure the second mortgage company would have priority over the
first with regard to recovering funds to satisfy its loan. The second
mortgage company was the first to give public notice of its interest,
and thus won the "race".

In terms of the mortgage, as the original mortgage company has
recorded the mortgage in the chain of title for the property,
subsequent lenders are on notice of its interest. The successor
mortgage company assumes the rights of the first mortgage company, and
is similarly protected. The second mortgage company may wish to record
the transfer in order to ensure that appropriate contact information
is reflected in the chain of title in case another mortgagor or lien
holder attempts to foreclose, but such a notice would be recorded for
its own protection, not out of a legal obligation or duty.

The original mortgage company, however, may be under a duty to notify
you of the transfer. Obviously, mortgage companies choose to inform
their clients of transfers for the obvious reason that the mortgage
payments must be sent to the correct place. However, sometimes
mortgage companies fail to give proper notice to the borrower, and
that failure may provide a defense against foreclosure. See, e.g.,
Winger v EMC Mortgage Corporation, 103 Cal. App. 4th 1125; 127 Cal.
Rptr. 2d 685 (2002), in which a mortgagor neglected to provide notice
required by the Real Estate Settlement Procedures Act of 1974 (RESPA),
12 U.S.C. 2601 et seq. The estate of the borrower was able to present
the failure to provide proper notice to the borrower as a defense
against foreclosure. (If you review that case, you will note that the
court did not discuss the failure to provide notice of the transfer as
either a defense against the transfer or as a defense against the
mortgage itself.)

You can review the RESPA statute on Cornell Law School's "Legal
Information Institute" website:
http://www4.law.cornell.edu/uscode/12/ch27.html

(In case you are not familiar with legal citations, they are presened
in the manner of: Volume - Reporter Name - Page Number. For example,
"103 Cal App 4th 1125" refers to volume 103 of the California
Appellate Reporter, 4th Series, at page 1125. "12 U.S.C. 2601" stands
for Title 12 of the "United States Code", Section 2601.)


Please note that due to the limited nature of the information
available to me, I am limited to providing information, and not legal
advice. I am not able to assess the title history for possible defects
which may affect your rights, or to identify any potential reasons why
the law as outlined above would not apply. To obtain a complete
evaluation of your rights, which depend upon that history, you should
have your title documents reviewed by a California real estate lawyer.


Research Strategy:

Google Searches:
- San Francisco County Government
- San Francisco Assessor-Recorder
- "race notice"

LexisOne Searches - California Law (LexisOne offers a free online
database of recent case law):
- mortgage & (record! /s transfer!)
- http://www.lexisone.com/

Legislative Counsel of California website searches:
- mortgage
- mortgages
- conveyance


I hope you find this information helpful,

- expertlaw

A quick, detailed response that even went beyond my question.  Many thanks.

While correct insofar as it goes, the primary regulator of the
secondary mortgage market is the US Government. Any mortgage that is
sold on the secondary market is likely to pass into a pool that is
serviced by a company that does business with a Federally regulated
corporation such as Freddie Mac <http://www.freddiemac.com> and
consequently must meet the stringent recordation of assignment chain
demanded by the Federal government for security instruments. Also, the
state of California does require recordation of assignments of deeds
of trust. Note that California regulations specifically exclude
Federally regulated entities such as Banks, HUD sponsored programs,
Freddie Mac, etc., precisely because they are regulated by the Federal
government.

CALIFORNIA DEPARTMENT OF REAL ESTATE

REAL ESTATE LAW AND SUBDIVIDED LANDS LAW
As amended and in effect January 1, 2003
From the Business and Professions Code
http://www.dre.ca.gov/relaw_pdf/Relaw.pdf

"Application of Sections 10232.2, 10232.25, 10233 and 10236.6
10232. (a) Except as otherwise expressly provided, Sections 10232.2,
10232.25, 10233, and 10236.6 are applicable to every real estate
broker who intends or reasonably expects in a successive 12 months to
do any of the following:
(1) Negotiate a combination of 10 or more of the following
transactions pursuant to subdivision (d) or (e) of Section 10131 or
Section 10131.1 in an aggregate amount of more than one million
dollars ($1,000,000):
(A) Loans secured directly or collaterally by liens on real property
or on business opportunities as agent for another or others.
(B) Sales or exchanges of real property sales contracts or promissory
notes secured directly or collaterally by liens on real property or on
business opportunities as agent for another or others.
(C) Sales or exchanges of real property sales contracts or promissory
notes secured directly or collaterally by liens on real property as
the owner of those notes or contracts.
(2) Make collections of payments in an aggregate amount of two hundred
fifty thousand dollars ($250,000) or more on behalf of owners of
promissory notes secured directly or collaterally by liens on real
property, owners of real property sales contracts, or both.
(3) Make collections of payments in an aggregate amount of two hundred
fifty thousand dollars ($250,000) or more on behalf of obligors of
promissory notes secured directly or collaterally by liens on real
property, lenders of real property sales contracts, or both.
Persons under common management, direction, or control in conducting
the activities enumerated above shall be considered as one person for
the purpose of applying the above criteria.
(b) The negotiation of a combination of two or more new loans and
sales or exchanges of existing promissory notes and real property
sales contracts of an aggregate amount of more than two hundred fifty
thousand dollars ($250,000) in any three successive months or a
combination of five or more new loans and sales or exchanges of
existing promissory notes and real property sales contracts of an
aggregate amount of more than five hundred thousand dollars ($500,000)
in any successive six months shall create a rebuttable presumption
that the brokerintends to negotiate new loans and sales and exchanges
of an aggregate amount that will meet the criteria of subdivision (a).
(c) In determining the applicability of Sections 10232.2, 10232.25,
10233, and 10236.6, loans or sales negotiated by a broker, or for
which a broker collects payments or provides other servicing for the
owner of the note or contract, shall not be counted in determining
whether the broker meets the criteria of subdivisions (a) and (b) if
any of the following apply:
(1) The lender or purchaser is any of the following:
(A) The Federal National Mortgage Association, the Government National
Mortgage Association, the Federal Home Loan Mortgage Corporation, the
Federal Housing Administration, and the United States Department of
Veterans Affairs.
(B) A bank or subsidiary thereof, bank holding company or subsidiary
thereof, trust company, savings bank or savings and loan association
or subsidiary thereof, savings bank or savings association holding
company or subsidiary thereof, credit union, industrial bank or
industrial loan company, commercial finance lender, personal property
broker, consumer finance lender, or insurer doing business under the
authority of, and in accordance with, the laws of this state, any
other state, or the United States relating to banks, trust companies,
savings banks or savings associations, credit unions, industrial banks
or industrial loan companies, commercial finance lenders, or insurers,
as evidenced by a license, certificate,
or charter issued by the United States or a state, district,
territory, or commonwealth of the United States.
(C) Trustees of a pension, profit-sharing, or welfare fund, if the
pension, profit-sharing, or welfare fund has a net worth of not less
than fifteen million dollars ($15,000,000).
(D) A corporation with outstanding securities registered under Section
12 of the Securities Exchange Act of 1934 or a wholly owned subsidiary
of that corporation.
(E) A syndication or other combination of any of the entities
specified in subparagraph (A), (B), (C), or (D) that is organized to
purchase the promissory note.
(F) The California Housing Finance Agency or a local housing finance
agency organized under the Health and Safety Code.
(G) A licensed residential mortgage lender or servicer acting under
the authority of that license.
(H) An institutional investor that issues mortgage-backed securities,
as specified in paragraph (11) of subdivision (i) of Section 50003 of
the Financial Code.
(I) A licensed real estate broker selling all or part of the loan, the
note, or the contract to a lender or purchaser specified in
subparagraphs (A) to (H), inclusive.
(2) The loan or sale is negotiated, or the loan or contract is being
serviced for the owner, under authority of a permit issued pursuant to
applicable provisions of the Corporate Securities Law of 1968
(Division 1 (commencing with Section 25000) of Title 4 of the
Corporations Code).
(3) The transaction is subject to the requirements of Article 3
(commencing with Section 2956) of Chapter 2 of Title 14 of Part 4 of
Division 3 of the Civil Code.
(d) If two or more real estate brokers who are not under common
management, direction, or control cooperate in the negotiation of a
loan or the sale or exchange of a promissory note or real property
sales contract and share in the compensation for their services, the
dollar amount of the transaction shall be allocated according to the
ratio that the compensation received by each broker bears to the total
compensation received by all brokers for their
services in negotiating the loan or sale or exchange.
(e) A real estate broker who meets any of the criteria of subdivision
(a) or (b) shall notify the department in writing within 30 days after
that determination is made."

"Loan Servicing - Delivery by Recordation Provided Note Payable to
Lender or Endorsed or Assigned to Loan Purchaser
10233.2. For the purposes of Division 3 (commencing with Section 3101)
and Division 9 (commencing with Section 9101) of the Commercial Code,
when a broker, acting within the meaning of subdivision (d) or (e) of
Section 10131 or Section 10131.1, has arranged a loan or sold a
promissory note or any interest therein, and thereafter undertakes to
service the promissory note on behalf of the lender or purchaser in
accordance with Section 10233, delivery, transfer, and perfection
shall be deemed complete even if the broker retains possession of the
note or collateral instruments and documents, provided that the deed
of trust or an assignment of the deed of trust or collateral documents
in favor of the lender or purchaser is recorded in the office of the
county recorder in the county in which the security property is
located, and the note is made payable to the lender or is endorsed or
assigned to the purchaser."

"Recordation of Trust Deeds, Assignments
10234. (a) Except as provided in subdivision (d), every real estate
licensee who negotiates a loan secured by a trust deed on real
property shall cause the trust deed to be recorded, naming as
beneficiary the lender or his or her nominee (who shall not be the
licensee or the licensee's nominee), with the county recorder of the
county in which the real property is located prior to the time that
any funds are disbursed, except when the lender has given written
authorization for prior release.
(b) If funds are released on the lender's written authorization as
described in subdivision (a), the trust deed shall be recorded, or
delivered to the lender or beneficiary with a written recommendation
that it be recorded forthwith, within 10 days following release.
(c) Every real estate licensee who sells, exchanges, or negotiates the
sale or exchange of a real property sales contract or a promissory
note secured by a trust deed on real property shall cause a proper
assignment of the real property sales contract or trust deed to be
executed and shall cause the assignment to be recorded, naming as
assignee the purchaser or his or her nominee (who shall not be the
licensee or the licenseeís nominee), with the county recorder of the
county in which the real property is located within 10 working days
after the licensee or seller receives any funds from the buyer or
after close of escrow; or shall deliver the real property sales
contract or trust deed to the purchaser with a written recommendation
that the assignment thereof be recorded forthwith.
(d) A trust deed may be recorded in the name of the real estate broker
negotiating the loan if all of the following apply:
(1) the lender or purchaser is any person or entity set forth in
paragraph (1) of subdivision (c) of Section 10232,
(2) the trust deed is recorded with the county recorder of the county
in which the real property is located, and
(3) the real property securing the loan as described in the trust deed
is not a dwelling as defined in Section 10240.2 or unimproved real
property."

MERS
From The Custodian’s Point of view
http://www.freddiemac.com/service/cim/pdf/mers.pdf

"Assignments
Section 47.3 of the Guide requires the Note file to include a
recordable mortgage assignment to Freddie Mac (for a non-MERS
mortgage) and any intervening assignments.
If MERS is the current mortgagee of record, but was not the original
mortgagee of record, a complete assignment chain from the original
mortgagee to MERS must be recorded (Guide Section 22.14(b)), but no
unrecorded assignment to Freddie Mac is needed in the file.
If MERS is the original mortgagee of record and the mortgage has not
been re-assigned by MERS, then no assignments need to be recorded or
in the file at all.
Example 1: Non-MERS
“A” is the original lender on the Note and original mortgagee of
record. “A” endorses the Promissory Note to “B”, who endorses it to
“C”, who endorses it in blank (for delivery to Freddie Mac) and acts
as servicer on the loan.
“A” executes and records a mortgage assignment to “B”, “B” executes
and records a mortgage assignment to “C”, and “C” executes an
unrecorded but recordable assignment to Freddie Mac, which is held in
the Note file while “C” services the loan.
Example 2: MERS
“A” is the original lender on the Note and original mortgagee of
record. “A” endorses the Promissory Note to “B”, who endorses it to
“C”, who endorses it in blank (for delivery to Freddie Mac) and acts
as servicer on the loan.
“A”, “B” and “C” are all MERS participants and “C” is duly registered
as the servicing interest holder in the mortgage on the MERS system.
A mortgage assignment from “A” to MERS was recorded while “A” held the
Note. The absence of a mortgage assignment from “A” to “B”, or “B” to
“C”, or “C” to Freddie Mac, is not a violation of the Guide
requirements."

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