Most private lending investors never see their name on anything but a wire receipt. A partial assignment of mortgage changes that. It is the recorded document that makes an investor the owner of a specific share of a specific loan, filed in the same county records as the mortgage itself.
What is a partial assignment of mortgage?
A recorded document in which a lender transfers part of its interest in a mortgage or deed of trust, and the note it secures, to someone else.
The loan stays one loan with one borrower and one lien. What changes is who owns it. After a partial assignment, the lender owns part of the lien and the investor owns the rest, in the shares the documents set. In a deed of trust state the same document is often called a partial assignment of deed of trust.
Why does recording it with the county matter?
Recording puts the public on notice that part of the lien belongs to you.
Land records are public. When an assignment is recorded, anyone who searches the title, including a title company at a future sale or refinance, sees that you hold a share of the lien. That is a different position from holding a line in a lender's spreadsheet or a unit in a fund, where your interest lives only in a private contract.
Takeaway: if your share is not on the county record, ask why before you fund.
Invest beside us?
Co-lend on first lien land loans we fund with our own money. 10% paid monthly, your share recorded with the county. Accredited, $500K minimum.
See How Co-Lending WorksInvestor FAQHow is it different from a full or collateral assignment?
A full assignment moves the whole loan, a partial assignment moves a share, and a collateral assignment only pledges the loan as security.
| Document | What moves | Who owns the loan after | Common use |
|---|---|---|---|
| Full assignment | The whole note and lien | The new holder | Selling a note outright |
| Partial assignment | A share of the note and lien | Lender and investor, by share | Investors funding part of a loan |
| Collateral assignment | Nothing, the loan is pledged | The original holder, subject to the pledge | Borrowing against notes |
We explain the pledge version in collateral assignment of note and mortgage explained.
What does the investor actually hold?
A share of the loan's payments, a share of the recorded lien, and the rights written into the participation agreement.
- A share of the payments. Interest on your portion, and your portion of principal when the loan pays off.
- A share of the lien. Recorded, tied to one piece of land.
- Contract rights. The participation agreement covers who services the loan, how payments are split, and who makes decisions if the borrower defaults.
The recorded assignment shows you own a share. The agreement shows how that share works day to day. Read both.
What should an investor check before funding?
The lien, the title policy, the assignment, the agreement, and how much equity sits in front of your money.
- First lien. Confirm the mortgage or deed of trust is in first position.
- Lender's title policy. Every loan should close with one.
- The recorded assignment. Ask for a recorded copy once it comes back from the county.
- The participation agreement. Servicing, payment timing, and default decisions, in writing.
- Loan to value and borrower cash. Lower leverage and a borrower with real money in the deal protect you first.
- The lender's own money. A lender funding its own share of the same loan has the same outcome you do.
How does Damen Capital use partial assignments?
Our investors co-lend beside us, and each investor's share of a loan is assigned to them by a partial assignment recorded with the county.
We originate first lien land loans at 65% of value or less and fund our own share of every one. Accredited investors fund a share right beside us, earn a straight 10% on their money paid monthly, and see every deal before deciding. The minimum is $500,000. See how co-lending with us works, or read loan participation vs. fund vs. co-lending.
This post is general information, not legal advice. Talk to your own attorney about any document before you sign it.
Frequently Asked Questions
What is a partial assignment of mortgage?
A recorded document in which the lender transfers part of its interest in a mortgage or deed of trust, and the note it secures, to another party. It is how an investor can own a share of one specific loan.
Why is a partial assignment recorded with the county?
Recording puts the public on notice that part of the lien belongs to the investor. Anyone who searches the land records, including a title company, can see it.
Is a partial assignment the same as a collateral assignment?
No. A partial assignment transfers ownership of a share of the loan. A collateral assignment pledges a note and mortgage as security for a different loan, and it is released when that loan is paid off.
Who collects the payments after a partial assignment?
Usually the lead lender keeps servicing. The borrower keeps paying one servicer, and the servicer sends each investor their share. The participation agreement spells this out.