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.

As Security For Loan

As Security For Loan

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Sample Template Preview

As security for loan.

The undersigned _________[assignor’s name], referred to as assignor, the owner of _____% of the entire beneficial interest under that certain trust agreement dated _________, and known as _________[identify agreement], executed by _________[name of trustor], as trustor, grants a security interest in and assigns to _________[name of bank], referred to as bank, and to its successors and assigns, all of the interest of assignor under the trust agreement and in the property described in the trust agreement and to all proceeds of the property or any part of it, including, without limitation, all proceeds from rentals, mortgages, sales, conveyances or other dispositions or realizations of any kind of or from the property or any part of it, including the right to manage, direct and control the property and the acts and doings of the trustee in respect to the property.
1. Warranties. Assignor warrants that
(a). Except for the security interest of bank, assignor is the owner of all the collateral pledged here free from any liens, security interest, encumbrance or other right, title or interest of any other person, firm, or corporation, and assignor shall defend the collateral against all claims and demands of all persons at any time claiming the same or any interest in it adverse to bank.
(b). There is no financing statement now on file in any public office covering any property of any kind that is included within this assignment or intended so to be, and so long as any amount remains unpaid on any indebtedness or liabilities of assignor to bank or any credit from bank to assignor is in use by or available to assignor, assignor will not execute and there will not be on file in any public office any financing statement or statements describing or attempting to describe the collateral pledged here.
2. Obligations secured. This assignment is given as collateral security for payment in full of _________[describe obligation].
3. Remedies on default. On nonpayment at maturity, whether by acceleration or otherwise, of the principal of or interest on the indebtedness secured here, or at any time or from time to time in the future, bank may
(a). exercise any one or more of all of the rights or remedies set forth in the note described above or set forth in any other evidence of indebtedness secured here. Bank shall also have full power and authority to exercise all of any one or more of the remedies, and shall have all the rights of a secured party, under the Uniform Commercial Code of Illinois. Any requirement of the Code for reasonable notice shall be met if notice is mailed, postage prepaid, to assignor at the address of assignor as shown on the records of bank at least five days prior to the time of the sale, disposition, or other event or thing giving rise to the requirement of notice. The right of bank to be the purchaser for its own account at any sale or other disposition of the collateral shall not be affected by the fact that bank is or may be now or at the time of the sale or disposition the trustee under that trust agreement described in the first paragraph here, nor shall this fact in any manner otherwise affect the rights of bank to sell, dispose of, or otherwise deal with the security interest granted here; and
(b). Bank may proceed immediately to exercise each and all of the powers, rights, and privileges reserved or granted to assignor under the trust agreement to manage, direct, control, and deal with the property or any part of it covered by the trust agreement, including without limitation the right to collect and receive the proceeds from rentals and from mortgages, sales, conveyances or other dispositions or realizations of any kind of or from the property or any part of it; and
(c). Bank may proceed to protect and enforce this conveyance by suits or proceedings in equity, at law, or otherwise, whether for the foreclosure or for the appointment of a receiver of the property covered by the trust agreement or any part, or for the enforcement of any other proper, legal or equitable remedy available under applicable law.
4. Application of proceeds. Any and all net proceeds received by bank by reason of the foregoing paragraphs, after first deducting all legal or other costs and expenses in effecting this realization, shall be applied to pay any or all of the indebtedness secured as bank shall deem proper, any surplus to be returned to assignor. On full payment of all indebtedness hereby secured, this assignment and the lien or charge created here or resulting from it shall cease to exist.
5. Nonliability of assignee. Notwithstanding anything to the contrary appearing in the trust agreement, the interest described above is assigned and transferred to bank by way of collateral security only and, accordingly, bank by its acceptance shall not be deemed to have assumed or become liable for any of the obligations or liabilities of assignor under the trust agreement, whether provided for by its terms, arising by operation of law, or otherwise. Assignor acknowledges that assignor remains liable to the same extent as though this assignment had not been made.
6. Ownership of collateral. Assignor represents and warrants that assignor has full power and authority to make the assignment provided for here and that assignor is the owner of _____% of the beneficial interest under the trust agreement, free and clear from any lien or encumbrance.
7. Interpretation. In the event that this assignment is executed by more than one assignor, the word assignor shall be deemed to include all or any of them, and all of the undertakings contained here shall be the joint and several obligations of assignors and each of them.
Executed on _________[date].
_________[Bank] acknowledges receipt of the above assignment on _________[date], and accepts the same.
[Authorized signature]
Trustee’s Endorsement
_________, as trustee under that certain trust agreement dated _________, and known as _________, acknowledges receipt of the above assignment on _________[date], and accepts the same.
[Authorized signature]