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The Legal Aspects of Real Estate Finance

The Legal Aspects of Real Estate Finance The Uniform Commercial Code is a uniform law, which exists in every state, set to help maintain control over all commercial transactions and sales, such as loans and mortgages. The UCC has been revised since its introduction to better suit the demands and needs of the borrowers and lenders involved in a deal such as a loan. 

A UCC allows for a loan to be secured with personal property through filing a statement and filling out a security agreement by the borrower. This includes, not only the personal property, but also its fixtures. Under the UCC, some examples of the transactions dealt with include the following: fund transfers, documents of title, investment securities, negotiable instruments, leases, secured transactions, sales, letters of credit, bank deposits, bulk sales, mortgages, loans, etc. 

Each area or article of the code deals with one of these specific transactions in stating what types of rules and regulations they must abide by. The code assists in unifying the transactions in states in order to prevent any confusion or interruption to them. For example, in dealing with sales of a product, it may be produced, packaged, and sold in many different states.

This may have presented a great deal of issues if there wasn't a single code followed by all those states to ease the transaction altogether. However, due to the fact that all these processes would follow the UCC, such problems may be prevented. The way a UCC is made up is by being written into a draft document through groups of people with an expertise in commercial law. The draft then needs to be approved by the American Law Institute and the Uniform Law Commissioners. 

These organizations must review the drafts first, and decide whether any changes need to be made, or if the draft is ready to be endorsed for adoption by the states. This is when the code goes into effect, and the states must adopt it into their existing code. In real estate, the UCC requires a financing statement to be filed in relation to a debt. This statement contains vital information in regards to the debt and the debtor as well as any property involved.

The information included would be the names of both parties ( the debtor and lender) as well as their domiciles as well as a full and clear description of both the personal and real property (as well as the location). These details can help to clearly identify all the persons and items involved in the securing of a loan with personal property. 

The UCC is seen by many as one of the greatest universal laws accepted as it is a model code extensively adopted by states. With the UCC being applied into the commercial dealings by the states, the transactions have and will continue to progress with great ease. These include any transitional issues with commercial transactions that cross state borders and regulations. 

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