Due Diligence

An abstract of title is a chronological summary of all recorded documents affecting a property's ownership. Note investors use it to verify lien position.

An assignment of mortgage (AOM) transfers a mortgage lien from one holder to another via recorded document. An unbroken assignment chain is required to.

An assignment chain is the sequential record of every recorded mortgage transfer from originator to current holder. An unbroken chain is required for.

A broken chain of title is a gap or missing assignment in the recorded mortgage history. It can block the note holder's legal standing to enforce the.

The chain of title is the recorded history of ownership transfers for a property or mortgage. An unbroken chain is critical for note investors to confirm.

A claim is a legal assertion of a right or demand against property. Unresolved claims can cloud title and erode collateral value for note investors.

A clear title is free of liens, encumbrances, or ownership disputes. Confirming title status is a core due diligence step that directly affects note.

A cloud on title is any claim, lien, or encumbrance that impairs clear ownership. Note investors must identify clouds during due diligence to avoid.

Collateral is the real property pledged as security for a mortgage loan. Its fair market value is the backstop that protects a note investor's capital.

A collateral assignment pledges a mortgage note as security for a loan. The note investor retains ownership but grants the lender a security interest in.

The collateral file is the complete set of original loan documents — note, mortgage, allonge chain, and assignments. Without it, a note investor cannot.

A door knock is an in-person property visit to confirm occupancy, assess condition, and contact a non-responsive borrower. A standard tool in.

Due diligence is the pre-purchase review of a note's collateral, title, borrower status, and legal standing — the primary defense against overpaying or.

An encumbrance is any claim, lien, or restriction on real property that affects clear title or value. Note investors identify them via title search.

An endorsement is a signature on a promissory note that transfers ownership. An unbroken chain of endorsements is required to legally enforce the note.

A lender's policy is title insurance protecting the note holder against title defects and undisclosed liens — a key collateral file document that.

Loan boarding is importing a newly purchased loan's data and payment history into the servicer's system — a critical first step where errors cause.

A secured note is a promissory note backed by real property via a recorded mortgage or deed of trust, giving the holder the right to foreclose on default.

An unsecured note is a promissory note no longer backed by property collateral, leaving only the borrower's personal liability enforceable.

An O&E report is a preliminary title search showing current ownership, liens, and encumbrances on a property — essential pre-bid due diligence for note investors.

A portal is a secure online platform from a servicer or vendor giving note investors access to loan data, documents, payment history, and management tools.

Redemption is the borrower's right to reclaim property after foreclosure by paying the full amount owed within a state-defined time period.

Title is the legal right of ownership to real property. Verifying clear title is a critical due diligence step for mortgage note investors.

A title search is an examination of public records to verify property ownership, identify liens, and confirm the title can be legally transferred.