Full original chain VS Full Recorded Chain

[Bret N.]

I'm buying a 1st NPN via FCI Exchange. What is the difference between Full Original Chain VS Full Recorded Chain and how should I consider this in to the purchase?

[Mike Hartzog]

Hi Bret - Ownership of mortgage loans are transferred using an assignment of mortgage (or deed of trust). Each assignment should be recorded, but this is not always done in a timely fashion, especially when someone purchases a note and sells it to someone else in a short period of time. In this case, the complete chain of lien ownership includes the unrecorded assignments, and the recorded chain does not. I am not familiar with the term "Full Original Chain", but I suspect it is a reference to the complete chain whether recorded or not, i.e., the hard-copy assignment documents.

As part of the closing process, FCI should validate that the hard-copy collateral file provided by the seller includes a complete chain of original assignments, ending with the current seller. They will also produce a new assignment which conveys ownership of the lien from the seller to you (or your business entity), and ship the collateral file to you. When you receive the collateral file, you will need to get an O&E report (title search) to check how much of the chain is recorded and then take steps to record any dry (unrecorded) assignments. I believe FCI can also do the recording for you as an additional service if you wish.

Hope that helps.