This will discuss the functionality of the UCCs that GoDocs provides.
Description
A state UCC-1 is filed with the secretary of state to perfect Lender's security interest in the personal property collateral attached to or part of the mortgaged real property.
Filing a UCC-1 also puts the public on notice of Lender's lien in all states. The UCC-1 compliments the fixture filing included in the mortgage which creates and perfects the personal property lien, but puts the public on notice of Lender's lien only in the county in which the mortgage is recorded.
Some Lenders elect not to file a UCC-1 as they must be continued every 5 years, terminated when a loan is repaid, or assigned when closed. Best practice, however, is to file a UCC-1 - this is also required by both Fannie Mae and Freddie Mac.
If a separate UCC-1 is not selected for filing in the secretary of state's office in the state of formation for the borrower, then a third party lien holder would not discover the senior lien unless it checked the local county records' accordingly; numerous junior liens can be put on the personal property collateral without notice to the lender or third parties, creating a greater chance of disputes on lien priority arising.GoDocs UCC-1 Sample
GoDocs Fixture Filing Language Sample
This language differs depending on the property state, but this below is representative of the fixture filing that is included in each GoDocs package regardless of if separate UCC-1s are included.
