In straightforward terms, an “assignment of mortgage” is a written document serving as evidence of the transfer of a loan obligation from the original borrower to a third party.
A mortgage lending institution can transfer a mortgage to another mortgage holder using an assignment document. The assignment of mortgage document transfers the mortgage account (along with all of the interest the original lender had under the loan) to a third party. This can be another lender, a loan servicer, or investor.
Why would they do this?
Banks and mortgage lenders often sell outstanding loans in order to free up money to lend to new borrowers. The lenders use the assignment of mortgage document to legally grant the loan obligation to the new mortgage holder.