Alabama Real Estate Practice Exam

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What does 'assignment' of a mortgage mean?

Changing the terms of the mortgage
Repainting the property
Another lender purchasing the mortgage
A legal modification of borrower's rights

The correct answer is: Another lender purchasing the mortgage

When a mortgage is assigned, it means that the mortgage has been sold to another lender. This means that the borrower's mortgage payments will now go to the new lender instead of the original one. This does not change any terms or conditions of the mortgage, rather it just transfers ownership of the loan to a different entity. Repainting the property or changing the terms of the mortgage are not related to the assignment of a mortgage. A legal modification of borrower's rights also does not accurately describe the process of mortgage assignment.