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Checkup for your RDC Program;
Susan Orr

September 10
Critical Issues on Certificates of Deposit;
Deborah Crawford

September 16
S.A.F.E. Act - Auditing for Compliance;
Patricia Cashman

September 22
FinCEN's Beneficial Owners Proposal: What It Can Mean for You;
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September 23
Bankruptcy 101;
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September 24
Using CPTED to Make Our Banks Safer;
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#1125526 - 02/06/09 06:06 PM cross pledge/cross collateralization questions
loan doc girl Offline
Junior Member

Registered: 06/29/04
Posts: 42
Loc: North Texas
This has become a really hot topic around here of late and it is giving us fits. Can anyone give me some answers or opinions?

First, are the 2 terms interchangeable? Some people say yes and others have said no.

Say you have 2 loans that are written up as having completely different collateral - how do you document a cross pledge of collateral? Do you do a security agreement/pledge for each loan? Or do you do the security documents only in the loan that they are primarily pledged to and put a c/p clause in the docs? (for instance - loan A has stock and loan B has accounts & equipment)

What if you have 2 loans that have the exact same collateral - do you put a c/p clause in those docs, or does it go without saying that they are c/p because you have security docs for each loan?

Same for real estate...you do a FLDT and SLDT, so is it redundant to say they are cross pledged? Seems to me that it is, but I don't know.

I know this is a lot of questions. Any input would be appreciated!
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Lending Compliance
#1125711 - 02/08/09 06:03 PM Re: cross pledge/cross collateralization questions [Re: loan doc girl]
rlcarey Offline
10K Club

Registered: 07/16/01
Posts: 49740
Loc: Galveston, TX
You are asking questions that will be based on State law as to how to perfect interests in real property and those questions are best asked of your attorney.
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The opinions expressed are my own, take them or leave them.

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