Indiana Secured Transactions Forms

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Indiana Secured Transactions Forms FAQ

What is a secured transaction?

A secured transaction is created by means of a security agreement in which a lender (the secured party) may take specified collateral owned by the borrower if he or she should default on the loan. By creating a security interest, the secured party is also assured that if the debtor should go bankrupt he or she may be able to recover the value of the loan by taking possession of the specified collateral instead of receiving only a portion of the borrowers property after it is divided among all creditors.

What law governs secured transactions?

The Uniform Commercial Code is a model statute covering transactions in such matters as the sale of goods, credit, bank transactions, conduct of business, warranties, negotiable instruments, loans secured by personal property and other commercial matters. Article 9 of the Uniform Commercial Code covers most types of security agreements for personal property that are both consensual and commercial. All states have adopted and adapted the entire UCC, with the exception of Louisiana, which only adopted parts of it. General contract law principles will also apply.

What is collateral?

Collateral is the property that secures the debt and may be forfeited to the creditor if the debtor fails to pay the debt. Property of numerous types may serve as collateral, such as houses, cars, jewelry, shares of stock of a company, inventory, accounts receivable, etc.


What is a Deed of Trust?

A Deed of Trust is a legal document that is commonly used in Indiana when you want to buy a house using a mortgage loan. It serves as a way to secure the loan and protect the lender's interests. Basically, it's an agreement between three parties: the borrower (who wants to buy the house), the lender (who provides the loan), and a trustee (an impartial third party). The borrower gives the lender a legal right to use the property as collateral until the loan is paid off. If the borrower fails to pay back the loan, the trustee can sell the property to repay the debt. It's like a safety net for the lender to make sure they can recover their money in case things go wrong.


Deed of Trust vs. Mortgage

A deed of trust and a mortgage are both legal documents used in Indiana when someone buys a property with the help of a loan. They are quite similar, but there are some key differences. Firstly, a deed of trust involves three parties: the borrower, the lender, and a neutral third party called the trustee. The trustee holds the legal title to the property until the borrower repays the loan. On the other hand, a mortgage involves two parties: the borrower and the lender. The borrower holds the legal title to the property from the beginning but gives the lender a security interest in the property until the loan is paid off. In summary, a deed of trust has three parties and the trustee holds the title, while a mortgage has two parties and the borrower holds the title.


What Should I Include in a Deed of Trust?

A deed of trust is an important legal document used in Indiana to secure a loan for a property. When creating a deed of trust, there are a few key elements you should include. Firstly, it is crucial to identify all parties involved, such as the borrower, lender, and trustee. Next, you should clearly describe the property being used as collateral for the loan. Additionally, the deed of trust must state the terms of the loan, including the amount borrowed, interest rate, and repayment schedule. It is also important to include provisions regarding the consequences of default and the process for foreclosure. Lastly, the deed of trust should be properly notarized and recorded with the county recorder's office to protect the interests of all parties involved.


Who serves as a trustee for a deed of trust?

In Indiana, the trustee for a deed of trust is usually a neutral third party, such as a title company or a licensed attorney. Their main responsibility is to hold the legal title to the property until the loan is fully paid off or the agreed-upon terms of the deed of trust are met. The trustee's role involves following the instructions outlined in the deed of trust document and carrying out necessary actions, like transferring ownership to the borrower or initiating foreclosure proceedings if the borrower fails to meet their obligations. Overall, the trustee acts as a sort of mediator, ensuring that both the borrower and the lender adhere to their respective responsibilities.


What is the amount borrowed on a mortgage?

The amount borrowed on a mortgage is the total sum of money that a person borrows from a lender to buy a home. This amount includes the purchase price of the house, as well as any additional costs like closing fees or taxes. In Indiana, the amount borrowed on a mortgage would depend on the specific property being purchased and market conditions. It could vary from one individual to another, and it is influenced by factors such as the size and location of the house, the interest rates, and the borrower's financial situation.