Georgia Secured Transactions Forms
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Georgia 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.
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What is a Deed of Trust?
A Deed of Trust, in simple terms, is a legal document that helps protect a lender's interest when lending money to buy a property. In Georgia, a Deed of Trust works similarly to a mortgage and is commonly used when purchasing a home with a loan. It involves three parties: the borrower, the lender, and a neutral third party known as a trustee. The borrower signs the Deed of Trust to show their agreement to repay the loan, while the lender holds the legal right to take possession of the property if the borrower fails to make the agreed payments. The trustee acts as a neutral party, holding the legal title to the property until the loan is fully repaid. This document ensures that both the lender and the borrower have clear rights and responsibilities during the loan repayment process.
Deed of Trust vs. Mortgage
In Georgia, when you buy a home, you have two options for securing your loan: a deed of trust or a mortgage. A deed of trust is a legal document that gives a lender the right to take ownership of your property if you fail to repay the loan. It involves three parties: the borrower, the lender, and a third party called a trustee. The trustee holds a deed to the property until the loan is fully paid off. On the other hand, a mortgage is a loan agreement between the lender and the borrower, where the borrower gives the lender a legal interest in the property as security for the loan. If the borrower fails to repay, the lender can initiate a foreclosure process. Both options have their own advantages and requirements, so it is important to understand them before making a decision.
What Should I Include in a Deed of Trust?
A deed of trust is a legal document used in Georgia and other states to secure a loan for the purchase of real estate property, like a house or land. It involves three parties: the lender (also called the beneficiary), the borrower (also called the trust or), and a neutral third party known as the trustee. The deed of trust should include specific details, like the names and addresses of all parties involved, a description of the property, the amount and terms of the loan, and how the property will be used as collateral. It is important to clearly state the rights and obligations of each party, including provisions for default and foreclosure processes. Additionally, the deed of trust should comply with all relevant laws and regulations of the state of Georgia to ensure its validity.
Who serves as a trustee for a deed of trust?
In Georgia, a trustee for a deed of trust is a person or entity responsible for overseeing the terms of a real estate loan. This trustee is typically an unbiased third party, like a title company or an attorney, who ensures that the terms of the loan agreement are followed by both the borrower and the lender. Their role is to hold the legal title of the property until the loan is fully paid off. In simple words, the trustee acts as a neutral intermediary between the borrower and the lender to protect the interests of both parties involved in the real estate transaction.
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 in order to purchase a property. This borrowed amount is used to cover the purchase price of the property, and it typically includes additional costs like closing fees and taxes. In the state of Georgia, the amount borrowed on a mortgage follows the same concept, where residents can borrow money from lenders to buy homes or properties in Georgia. The specific amount borrowed can vary depending on various factors such as the property's purchase price, the borrower's creditworthiness, and the terms of the mortgage loan.
