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#1184399 - 05/15/09 03:06 PM Fed Box
bls Offline
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Alabama
I am somewhat embarrassed about asking this basic question. In the Fed box on our note agreements, there is a box that has the following verbiage "brief description of other property". One of our loan officers said that at a compliance class, they were told to put the description of the collateral in this field. However, I have always understood this to mean any property other than the collateral listed in the security agreement section (such as all deposit accounts). I also understood this to be used in situations such as a loan made to a company, which is secured by real estate owned by the shareholder. Since the company is not the owner, it is not listed in the collateral field, but rather in this other property field. What does anyone else put in this field? Any suggestions/examples are greatly appreciated!

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Lending Compliance
#1184417 - 05/15/09 03:19 PM Re: Fed Box bls
Skittles Online
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Skittles
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TN
You should have two boxes - 'Goods or Property Being Purchased' and 'Brief Description'. If the loan is secured by the property being obtained from the proceeds you indicate 'Goods or Property Being Purchased' and you're done. If the loan is secured by something other than this <i.e. a bank CD> you indicate 'Brief Description' and list the collateral <i.e. Bank CD #1234>.


(m) Security interest. The fact that the creditor has or will acquire a security interest in the property purchased as part of the transaction, or in other property identified by item or type.


The above section was taken from Regulation Z 226.18.
Last edited by Duchess Skittles; 05/15/09 03:20 PM.
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#1184419 - 05/15/09 03:24 PM Re: Fed Box Skittles
ktac MITCH Offline
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ktac MITCH
Joined: May 2005
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Giant side of TX
Originally Posted By: Duchess Skittles
You should have two boxes - 'Goods or Property Being Purchased' and 'Brief Description'. If the loan is secured by the property being obtained from the proceeds you indicate 'Goods or Property Being Purchased' and you're done. If the loan is secured by something other than this <i.e. a bank CD> you indicate 'Brief Description' and list the collateral <i.e. Bank CD #1234>.


(m) Security interest. The fact that the creditor has or will acquire a security interest in the property purchased as part of the transaction, or in other property identified by item or type.


The above section was taken from Regulation Z 226.18.

Just to expand on the correct answer by Duchess - - If the loan is not purchase money you mark the Brief Descrip box and indicate ie 2006 Ford F-150, while the Security Agreement would give the specific description (VIN #) so you get attachment and perfection on exactly which F-150.
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#1184427 - 05/15/09 03:29 PM Re: Fed Box ktac MITCH
swiggles Offline
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swiggles
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Originally Posted By: ktacMITCH
Originally Posted By: Duchess Skittles
You should have two boxes - 'Goods or Property Being Purchased' and 'Brief Description'. If the loan is secured by the property being obtained from the proceeds you indicate 'Goods or Property Being Purchased' and you're done. If the loan is secured by something other than this <i.e. a bank CD> you indicate 'Brief Description' and list the collateral <i.e. Bank CD #1234>.


(m) Security interest. The fact that the creditor has or will acquire a security interest in the property purchased as part of the transaction, or in other property identified by item or type.


The above section was taken from Regulation Z 226.18.

Just to expand on the correct answer by Duchess - - If the loan is not purchase money you mark the Brief Descrip box and indicate ie 2006 Ford F-150, while the Security Agreement would give the specific description (VIN #) so you get attachment and perfection on exactly which F-150.


We don't even do that much. We indicate "your vehicle" or "your savings account" or "your stock certificate." Adding too much info is just another place for a typo that might (though not likely) come back and haunt you.
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#1184557 - 05/15/09 04:50 PM Re: Fed Box swiggles
Dan Persfull Online
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Dan Persfull
Joined: Aug 2002
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Bloomington, IN
Quote:
We don't even do that much. We indicate "your vehicle" or "your savings account" or "your stock certificate." Adding too much info is just another place for a typo that might (though not likely) come back and haunt you.


I agree with this 100%. We too enter generic terms such as 1-4 Family Dwelling, Motor Vehicle, Certificate of Deposit, etc. We don't even put "your" in front of it. However, you have the option to be a precise in the description as you wish to be.

Review the Commentary to 226.18(m).
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#1185114 - 05/17/09 01:37 PM Re: Fed Box bls
Richard Insley Online
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Richard Insley
Joined: Oct 2000
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Toano, VA
Originally Posted By: blskms
In the Fed box on our note agreements, ...to be used in situations such as a loan made to a company....

This is a commercial loan and is not covered by Regulation Z. Generally, commercial notes are less lenient than consumer notes and should always be used unless it's clearly a consumer transaction.
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