Trailing Documents

Trailing documents are the original physical loan documents that the seller ships to the buyer after a mortgage note transaction has closed. While buyers typically review digital copies of the collateral file during due diligence, the actual original documents — the wet-ink promissory note, recorded mortgage or deed of trust, allonge chain, and assignment chain — are delivered after funding, often arriving weeks or even months after the closing date.

The timeline and condition of trailing documents matter. The loan purchase sale agreement (LPSA) typically specifies a deadline for document delivery — commonly 30 to 90 days post-closing — and outlines the seller's obligations to cure any deficiencies found when the buyer audits the physical files against the digital copies reviewed during due diligence. Missing originals, broken endorsement chains, or unrecorded assignments discovered in the trailing documents trigger exception reports back to the seller. Buyers who fail to audit trailing documents promptly risk discovering collateral defects after the LPSA's cure period has expired, leaving them with no recourse against the seller.