Posted by Dave Hanson on May 25, 2004 at 22:08:06:
Thanks Bill!
After looking at it again more closely and comparing my other deeds, I’m inclined to agree. I think I gave insufficient attn to the last paragraph, which reads in part:
“It is understood and agreed that the Lender will not exercise any of the rights conferred by this Assignment until after default in the payment of the Note or default under the Security Instrument executed by Trustee as security for the Note.”
That makes sense.
Bank’s Security Assnmt doc seems overkill (WA)? - Posted by Dave Hanson
Posted by Dave Hanson on May 25, 2004 at 17:43:06:
I got one of our banks to extend a very favorable LOC on one of our investment properties that’s held in a land trust. They did want me to sign and notarize this document. I’ve done lines on property before, but never seen language quite like this before…seems a little excessive to me. Bill B, John M, and all, what do you think?
"For value received, and as additional security for the payment of a certain line of credit agreement, dated ___________________, 200 in the principal sum of ____________________________ executed by _______as beneficiary under the ______Trust dated ______2003, and payable to the order of ____ Bank, N.A. (“Lender”), the undersigned beneficiaries __________have this day sold, assigned, transferred, conveyed, and set over to the Lender, its successors and assigns, all the rights, powers, privileges, beneficial interest and power of direction in, to and under the ______ Trust. Until the Lender, its successors or assigns, exercise the rights granted by this Security Assignment the undersigned beneficiaries agree to remain liable to the Trustee for all of the liabilities, contingent or otherwise, imposed upon the beneficiaries of the Trust Agreement and agree to indemnify and hold harmless the Lender, its successors and assigns against any and all such liabilities.
Nothing contained in this Security Agreement shall be construed as creating or imputing any liability on Lender, until such time as Lender exercises the rights and privileges conferred by this Assignment.
This Assignment binds and shall inure to the benefit of the successors and assigns of the Lender and of the undersigned and shall continue in full force and effect until all of the indebtedness due the Lender under the Note has been fully paid, at which time this Assignment shall terminate. It is understood and agreed that the Lender will not exercise any of the rights conferred by this Assignment until after default in the payment of the Note or default under the Security Instrument executed by Trustee as security for the Note."
I might be overreacting, but it seems to read like they’re asking for all beneficial interest, which can’t be right…this is a major national bank, and they have displayed a little confusion on how this works in the past.
Any advice most appreciated!
Bank’s Security Assnmt doc seems overkill (WA)? - Posted by Bill H
Posted by Bill H on May 25, 2004 at 21:57:28:
Dave:
Looks to me pretty much like the standard “Transfer of Rights Provision” in all deeds of trust. In this case, because the property is held in a land trust, they are asking the trust to give them the right to take whatever actions are necessary to protect their interest in the event the trust goes into default, etc.
Read all of your deeds of trust and somewhere long about paragraph 5 or so you will see basically the same or similar language. One of those things we all execute from time to time and suddenly wake up and wonder “How the H— did I sign this thing! What was I smoking when I did this?”
Good luck,
Bill H