A California lender assigns a deed of trust to a new investor. The borrower was not notified of the assignment. Under California law, is the assignment valid?
Correct Answer
C) Yes, the assignment is valid; borrower consent is not required, though notice should be provided
A beneficiary may assign a deed of trust and promissory note without the borrower's consent. The security follows the debt. While the borrower should receive notice of the new entity to which payments should be sent, lack of notice does not invalidate the assignment.
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Related Topics & Key Terms
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Related Concepts
Usury is the practice of charging an interest rate that exceeds the maximum rate permitted by state law. Usury laws protect borrowers from excessive interest charges on loans.
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An adjustable-rate mortgage (ARM) has an interest rate that changes periodically based on market conditions, typically after an initial fixed-rate period. The rate adjustment is tied to a financial index plus a margin.
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