As Security for Loan
As Security for Loan – what is it
When the assignor or the owner of a property grants security interest and assigns to the bank as well as the successors and signs the interest of the assignor which is under the trust agreement, then the proceeds of the mortgages, sales, rentals etc including the rights to direct, manage or control the property are given to them.
As Security for Loan the assignor informs that the collaterals which are pledged do not have any liens or encumbrances. The assignors defend all collaterals against claims. The assignor also informs that there is no financing statement which is on file or there is no liability to any banks or credit institution for the property which is pledged.
When payment is not made on maturity as per the terms, the bank can after giving sufficient notice, exercise all the rights, powers and privileges against the assignor and receive the proceeds of the rentals or proceeds from mortgages or even sales or conveyances or any kind of realization they can get from the property.
The bank will receive these net proceeds after deducting whatever fees it takes as well as the costs and expenses which are incurred by it and whatever is left, the surplus is returned back to the assignor. When the debt has been paid in full then the charge or the lien which was created or which resulted from it does not exist anymore.
These are the terms and conditions when the property is stated as Security for Loan.