During last weekend’s Annual Meeting of the American College of Mortgage Attorneys, one of the most interesting and helpful presentations was on real estate loan documentation and the lessons we learned during the recent economic downturn. In his presentation, Charles Guerin, of Munsch Hardt Kopf & Harr PC in Dallas, Texas made some excellent points, ones that we should have known and been doing all along, but somehow got forgotten in the mad crush in 2006 and 2007.
The first pointer is to have a single deed of trust or mortgage for all your collateral and debt. I remember the old days when doing this was common practice. Somehow, though, this practice fell by the wayside, whether because the different collateral and properties were easier to secure separately, or because different lawyers were tasked with drafting different documents. But, if you have real estate collateral, the UCC allows the lender to list all the real and personal collateral in one deed of trust or mortgage and foreclose the personal property along with the real property under state real estate foreclosure law. In states where non-judicial foreclosure is fast and easy, putting all your collateral under one security instrument is certainly safer and easier than doing different foreclosures for different types of properties.
For further pointers, I refer you to Mr. Guerin’s materials from the ACMA 2011 Annual Meeting materials. www.acmaatty.org.
Janice Carpi is National Underwriting Counsel for GRS Group Title Services. https://grs-global.com