Aside from the legal issues, if we are taking an assignment of a judgment from another bank as collateral for a new loan and the judgment include rights to items covered by a UCC or mortgage - what would our compliance obligations be? For instance, are there no additional compliance obligations because the collateral is the judgment? Or do we need to obtain a new security agreement and get an amendment or assignment of the UCC? The mortgages include a propery in a flood zone. Are we responsible for flood insurance or is the bank who took the loan and has the insurance now responsible for maintaining it as we only have an assignment in the proceeds obtained from collection of the judgment?

I would recommend that you visit about this situation with your attorney regarding how to secure your collateral. As far as the flood insurance, if you don't have a direct interest in the property, you have no flood responsibilities.

Is this judgment a commercial tort claim? If so, Article 9 provides perfection by filing as long as you describe the specific tort claim.

I believe the judgment between the selling bank and default borrower was from a commercial tort claim - so does the assignment mean we need to prepare a new security agreement describing the tort as you said? I am totally confused on this and the attorneys are only interested in getting the deal done. I have to document the loan.

An assignment can be a type of security agreement. You need to file a financing statement listing the specific commercial tort claim.