Legal Question in Real Estate Law in California

There is no need to assign anything in order to change the loan servicing company. If the ownership of the underlying debt changes hands, however, then an assignment of the note is needed. It does not have to be recorded, though, because the orginal loan is never recorded, and unless the mortgage is paid off or needs to be foreclosed on, the assignment does not even need to be signed or otherwise formalized, as long as the lenders properly account for it on their books, including records of your account. A substitution of trustee is only needed if the mortgage is to be reconveyed or foreclosed, and the original trustee cannot or will not perform the required service.

Servicing a mortgage is a ministerial function unrelated to being the holder of the note and the beneficiary of the deed of trust. The new servicer needs to notify the borrower so that payments get sent to the right place, but this does not need to be, and should not be, a matter requiring a new recording of documents. A substitution of trustee is a different matter; that must be recorded to give notice to all.