What is an 'Assignment'

An assignment is the transfer of an individual's rights or property to another person or business. For example, when an option contract is assigned, an option writer has an obligation to complete the requirements of the option contract. If the option was a call, or put, option, the writer would have to sell, or buy, the underlying security at the stated strike price.

BREAKING DOWN 'Assignment'

Assignment means transferring some or all property rights and obligations to another person through a written agreement. For example, a payee assigns rights for collecting note payments to a bank. A trademark owner transfers, gives or sells another person interest in the trademark. To be effective, an assignment must contain parties with legal capacity, consideration, consent and legality of object.

Examples of Assignment

A wage assignment is a forced payment of an obligation by automatic withholding from an employee’s pay. Courts issue wage assignments for people late with child or spousal support, taxes, loans or other obligations. Money is automatically subtracted from a worker's paycheck without consent if the obligor has a history of nonpayment. For example, a person delinquent on $100 monthly loan payments has a wage assignment deducting the money from his paycheck weekly or monthly and sent to the lender. Wage assignments are helpful in paying back long-term debts.

A mortgage assignment is where a mortgage deed gives a lender interest in a mortgaged property in return for payments received. Lenders often sell mortgages to third parties, such as other lenders. A mortgage assignment document clarifies the assignment of contract and instructs the borrower in making future mortgage payments and potentially modifying the mortgage terms. A mortgage assignment is beneficial for a seller with a home on the market long term and for a buyer not wanting to secure a bank loan. Many real estate companies facilitate mortgage assignments in this situation.

A lease assignment benefits a relocating tenant wanting to end a lease early or a landlord looking for rent payments to pay creditors. Once the new tenant signs the lease taking over responsibility for rent payments and other obligations, the previous tenant is released from those responsibilities. In a separate lease assignment, a landlord agrees to pay a creditor through assignment of rent due under rental property leases. The agreement is used to pay a mortgage lender if the landlord defaults on the loan or files bankruptcy. Any rental income is paid directly to the lender.

RELATED TERMS
  1. Wage Assignment

    The procedure of taking money directly from an employee's compensation ...
  2. Debt Assignment

    A transfer of debt, and all the rights and obligations associated ...
  3. Transfer of Mortgage

    A transaction where either the borrower or lender assigns an ...
  4. Assignment Of Trade

    A transaction used primarily in the mortgage-backed securities ...
  5. Assignable Contract

    A futures contract with a provision permitting the contract holder ...
  6. Assignment Of Proceeds

    A document transferring all or part of the proceeds from a letter ...
Related Articles
  1. Trading

    Rent To Own; Own To Rent

    This method can help first-time buyers afford a home using a rent-to-own strategy, and it can also be good for investors.
  2. Personal Finance

    Understanding the Mortgage Payment Structure

    We explain the calculation and payment process as well as the amortization schedule of home loans.
  3. Personal Finance

    The Best Mortgage Deal (May Not Be What You Think)

    Don't judge a mortgage solely by payment amount. Here's what insiders know about choosing the most advantageous mortgage offer.
  4. Personal Finance

    Mortgage Broker vs. Direct Lenders: Which is Best?

    There are key differences between mortgage brokers and direct lenders. Here's how to choose which is best for you.
  5. Managing Wealth

    Millennials Guide: How To Read a Lease

    Everything you need to know before you rent a home.
  6. Investing

    Understanding The Mortgage Payment Structure

    While a mortgage’s size and term set the baseline, the interest, taxes and insurance all influence the amount of the monthly payment.
  7. Personal Finance

    Tips for Choosing the Best Online Mortgage Lender

    Finding the right online mortgage lender can be a tall task. Here's some help on how to avoid wasting your time.
  8. Retirement

    Could Being a Landlord Pay for Your Retirement?

    If you have the money to buy them and the energy to run them – or the funds to pay a good manager – rental properties can help pay for your retirement.
  9. Personal Finance

    How To Shop For Mortgage Rates

    Take these 5 steps to getting the lowest possible rate for your mortgage. Small percentage differences can mean big savings down the line.
RELATED FAQS
  1. What is a collateral assignment of life insurance?

    Learn about collateral assignment of life insurance so you can make a wise decision about what kind of collateral to use ... Read Answer >>
  2. If my mortgage lender goes bankrupt, do I still have to pay my mortgage?

    Yes, if your mortgage lender goes bankrupt you do still need to pay your mortgage obligation. Sorry to disappoint, but there ... Read Answer >>
  3. What’s the difference between a mortgage lender and a mortgage servicer?

    Buying a home is an exciting and confusing process. Once the loan is secured, it's important to know who gets the payment: ... Read Answer >>
  4. What are the differences between single, double and triple-net leases?

    Learn the ins and outs of net lease agreements, including the key differences between single net, double net and triple net ... Read Answer >>
  5. How does the loan-to-value ratio affect my mortgage payments?

    Understand what the loan to value ratio is, how the ratio is calculated and learn how it has an impact on your mortgage payments ... Read Answer >>
Hot Definitions
  1. Master Of Business Administration - MBA

    A graduate degree achieved at a university or college that provides theoretical and practical training to help graduates ...
  2. Liquidity Event

    An event that allows initial investors in a company to cash out some or all of their ownership shares and is considered an ...
  3. Job Market

    A market in which employers search for employees and employees search for jobs. The job market is not a physical place as ...
  4. Yuppie

    Yuppie is a slang term denoting the market segment of young urban professionals. A yuppie is often characterized by youth, ...
  5. SEC Form 13F

    A filing with the Securities and Exchange Commission (SEC), also known as the Information Required of Institutional Investment ...
  6. Four Percent Rule

    A rule of thumb used to determine the amount of funds to withdraw from a retirement account each year. The four percent rule ...
Trading Center