In this issue of Community Banker, we answer a question about delinquency time requirements for foreclosing residential mortgages, and we talk about preserving perfection in liens.
Ah, perfection! You’ve filed your financing statement, but you really shouldn’t ignore it for the next five years or until the loan has been paid off; perfection must be preserved or it may cease to be effective. Gaps in perfection can let other creditors gain priority over you by perfecting their liens in the same collateral at a time when your perfection has lapsed; lapses or gaps in perfection can also lead to a “re-perfection” being set aside in bankruptcy under preference rules.
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