What Is An Allonge?
Allonge… sounds like a fancy French word to me. Well, it is! The word “allonge” is derived from the French word allonger, meaning to draw out or an extension of... From (Merriam-Webster) dictionary, allonge literally means, lengthening. In French law, an allonge was used when a bill of exchange or other negotiable documents were too small to receive all the endorsements on one sheet, so another sheet was added, called an allonge.
Simply, it is additional paper firmly attached to a promissory note, to provide room to add endorsements.
So, what does this mean regarding notes? Well, when you have a promissory note, the allonge is the document that gives you the power to collect money on your loan!
When you have a mortgage loan, the borrower signs a promissory note to repay the loan and along with that, you have a Mortgage or Deed of Trust to secure the promissory note (loan). There are two separate documents produced at a mortgage closing that will need to be endorsed. Well when you buy a note (the note is transferred to you), you should receive documents in the collateral file that show the chain of transfers throughout life of the note. This transfer between new owners is called an Assignment of Mortgage (or Deed of Trust). Just like the promissory note gives you the power to collect money on the loan, the Assignment of Mortgage (or DoT) gives you the power to take legal action on the property (i.e., foreclosure).
While both the promissory note and the AoM need to be endorsed, you will need to ensure that the AoM is recorded with county where the actual property is located.
These steps are important when reviewing your collateral files when changing or accepting new ownership of a note. If the home is sold or refinanced and you own the note, you want to be sure that the proceeds go to you as the debt owner. So, be sure to check your collateral files thoroughly for the chain of title on your notes!
For more information on notes or if you have notes to sell, reach out to Zee at Awanna Holdings, LLC (571)659-5005. ©Awanna Holdings, LLC (Mar 2020-13), email@example.com/www.awannarandh.com