Risk Management Blog

One of the basic tenets of the Uniform Commercial Code holds that a terminated UCC filing ceases to be effective. So how can a terminated UCC not really be terminated? There are two scenarios. Scernario 1: When the UCC record contains more than one secured party of record. Under the Uniform Commercial Code, when multiple secured parties exist for a single UCC record, a single secured party can act as representative and file a termination… >> READ MORE

UCC Secured Party Representative Service provides protection for secured lenders by using a representative’s name (instead of their own) in the Secured Party box on UCC Financing Statements. Under Revised Article 9, UCC Section 9-502(a)(2), a financing statement must provide the name of the secured party or representative of the secured party. The Secured Party Representative Service key aspect is that the code allows “a representative”… >> READ MORE

A couple of weeks ago, we featured a post on the blog titled, "Costs for Performing UCC, Lien and Litigation Searches" in which we discussed the types of fees you may encounter when hiring a service company to perform public records research, including: service fees, correspondent/agent fees, statutory/jurisdictional fees and copy costs. In this week’s blog post, we are going to share some additional information on copy costs and offer… >> READ MORE

If you’re like me when I was first introduced to this industry, you might be a little confused about the difference between judgments and judgment liens. They are two separate animals, and it’s important to know the difference if you’re trying to determine which to search for when doing your due diligence. The easy definition is that a judgment is an official decision rendered by the court with regard to a civil matter. A judgment… >> READ MORE

When conducting UCC and lien searches as part of a prefunding due diligence investigation it is a good idea to maximize your results in order to minimize your risk. This strategy helps uncover hidden liens and those filed under critical name variations. To accomplish this, you will want to cast a wide net to bring in as many potential hits as possible and then whittle them down to only those that are pertinent to your transaction. Online… >> READ MORE

There are secured creditors and unsecured creditors. But what is the difference between secured creditors and unsecured creditors? Secured Creditors Secured Creditors are creditors that hold a lien on its debtor’s property, whether that property is real property or personal property. The lien gives the secured creditor an interest in its debtor’s property that provides for the property to be sold to satisfy the debt in cases of default.… >> READ MORE

According to the Uniform Commercial Code, a UCC Financing Statement is only effective if it gets the debtor name right. A UCC Financing Statement that fails to properly identify the debtor by their legal name will not offer the secured party priority status to collect should the debtor default or file for bankruptcy. The Code goes on to say that for registered business debtors, the name that should appear on a UCC Financing Statement… >> READ MORE

A UCC Financing Statement must properly identify the debtor in order for the UCC to perfect a security interest and provide priority protection for the secured party. To satisfy this requirement, a secured party must complete their Financing Statement using the debtor’s legal name. In general, secured parties understand the importance of properly naming the debtor on their UCC Financing Statements and try hard to comply. Sometimes though,… >> READ MORE

What is Pre-filing? In a traditional funding cycle, a lender will order lien searches on potential borrowers at the start of a new deal. Based on the results of those searches (and other measures of creditworthiness) the lender decides whether to fund the applicant. If the lender elects to advance funds, the lender will file a UCC Financing Statement to perfect their security interest and secure a priority position to collect should… >> READ MORE

Once a creditor has filed a UCC Financing Statement they will want to do all they can to maintain their priority position throughout the life of the loan. Lien monitoring programs run interval searches on debtor names to check for any new filing activity, and then provide timely updates to alert a creditor to potential threats. Monitoring offers an easy and affordable way for a secured party to keep an eye on other lien-holder activity against… >> READ MORE