Plaintiff is selling her house. It is community property with the respondant. Plaintiff’s lawyer has filed and Assignment of Rents against house for $20,000. What does this mean?
Plaintiff is selling her house. It is community property with the respondant. Plaintiff’s lawyer has filed and Assignment of Rents against house for $20,000. What does this mean?
#1 by simplyachick on 11/20/2011 - 6:06 PM
Basically the filing lawyer wants to guarantee that the controlling property owner will pay the mortgage no matter what. He does not want to chance a foreclosure. This guarantees the money to the mortgage company.
When you rent out a mortgaged property, you may have to sign over an Assignment of Rent agreement to the lender. By doing so, you authorize the lender to collect rent on your behalf if you default on the mortgage.
The Assignment of Rent provides an additional security to the lender in case you default on the loan. The lender will use the Assignment of Rent only when you default on the loan. Through this agreement, he will be able to collect rent payments on your behalf till the end of the lease period and recover the unpaid loan balance. Any extra cash collected by the lender will be returned to you. Once the debt is fully paid off, the assignment of rent will become null and void.