(A) For purposes of this section:
(1) "Assignment of note" means every document endorsing, assigning, transferring, pledging, or conveying an interest in a note and mortgage securing the note, whether set forth in a separate instrument or contained in a loan agreement, financing agreement, or security agreement or given in conjunction with financing arrangements, involving Farm Credit System institutions.
(2) "Collateral assignment" means any assignment of a note and mortgage made and delivered in connection with any extension of credit involving Farm Credit System institutions, where the assignor retains the right to collect or to apply the note payments after assignment and prior to default.
(3) "Farm Credit System institution" means a Farm Credit Bank, (formerly Federal Land Bank or Federal Intermediate Credit Bank), an Agricultural Credit Bank, an agricultural credit association (ACA), a production credit association (PCA), a federal land bank association (FLBA), or a federal land credit association (FLCA), chartered by the federal Farm Credit Administration pursuant to the Farm Credit Act of 1971, as amended, or an act of the United States Congress, or any successor or assignee of any of the foregoing.
(B) It is not necessary in order to perfect a valid written assignment of a mortgage or other agreement mortgaging real property or an interest in real property, which is pledged as security for an obligation involving Farm Credit System institutions, to record the written assignment in the office of the clerk of court or other recording office in the county in which the real property is located. A transfer of the promissory note or other instrument secured by the mortgage or other security instrument by an assignment of note to such an institution, which assignment of note constitutes an effective transfer or assignment under the laws of this State, constitutes an effective assignment of the mortgage or other security instrument. The assignee of the note is entitled to enforce all obligations contained in the promissory note or other agreement and possesses all of the rights of the assignor in the mortgage or other security instrument given to a Farm Credit System institution, including the right to foreclose the instrument in accordance with law without restriction. The provisions of this section do not preclude the recordation of a written assignment of a mortgage or other security instrument with or without the promissory note or other instrument that it secures.
(C) The execution of a written document containing an assignment of note is valid and enforceable from the time of execution to pass the interest granted, pledged, assigned, or transferred in the note and the mortgage securing the note as against the assignor, and the transfer is perfected from the time of execution against subsequent assignees, lien creditors, and purchasers for valuable consideration from the assignor; provided, however, that service of process on a Farm Credit System institution that is a mortgagee of record in any foreclosure action, or other action affecting title to the underlying real estate collateral, must be deemed sufficient service to any Farm Credit System institution that is assignee of such mortgage and underlying note as provided herein.
(D) Where an assignment of note is a collateral assignment, after a default under the loan agreement, financing agreement, security agreement, or other evidence of indebtedness which the assignment secures, the assignee is thereafter entitled, but not required, to collect and receive any accrued and unpaid or subsequently accruing note payments and to foreclose the mortgage securing the note subject to the assignment without need for the appointment of a receiver, any act to take possession of the note, or any further demand on the assignor or maker of the note. Unless otherwise agreed, after default the assignee is entitled to notify the maker or other obligor to make payment to the assignee and is also entitled to have possession of any payments or proceeds to which the assignee may be entitled.
(E) This section does not exclude other methods of creating, perfecting, collecting, sequestering, or enforcing a security interest in notes and mortgages provided by the laws of this State.
(F) For documents executed on or after the effective date of this section, the provisions of this section providing that the assignment of mortgages need not be recorded must be reflected in the mortgage in bold print.
HISTORY: 1994 Act No. 398, Section 1.