Loan Documentation 2-Day Workshop

CFT Credits: 0.00



While our economy continues to improve proper loan documentation remains essential.  The likelihood of loan defaults still remains higher than normal.  A loan in default presents the ultimate test of the quality of a lender’s documentation practices.  Loan documents are all that stand between charging off a loan or recovering against collateral and/or guarantors.  The environment of a loan in default is highly adversarial. Documentation is scrutinized by highly experienced attorneys whose job it is so find “holes” in a lender’s documents.  For this reason, loans must be documented to withstand the highest level of scrutiny and legal challenge.  The Principles of Loan Documentation seminar is designed to help those who make, manage or review loans become “proactive” in minimizing loan losses.  This one-day seminar focuses on the major concepts, specific requirements and common problems of loan documentation, with a particular emphasis on avoiding loan losses due to faulty documentation that even cutting-edge documentation software cannot always effectively eliminate. Our philosophy is to develop “hands-on” instruction so that participants can return to their jobs and apply what they have learned.


 1.  Problem Method

Throughout the program the problem method will be used to challenge the participants in important areas of loan documentation.  The instructor will demonstrate the difficulty and challenges often times hidden in every day/routine lending transactions by posing problems to the participants based on “real world” situations faced by actual lenders who, unfortunately, documented the loan incorrectly resulting in costly legal challenge.  The use of the problem method will involve the participants and challenge their ability to identify documentation errors and deficiencies common in commercial lending transactions. 

The seminar will illustrate how to:

  • Perfect security interests under Revised Article 9 of the UCC
  • Examine major recent amendments to Article 9 of the UCC
  • Identify the borrower and document the authority to borrow
  • Understand and deal effectively with various entity types (ptsp, corp, LLC)
  • Understand contract basics: notes, security agreements, mortgages, pledges and other essential loan contracts
  • Use commitment letters
  • Understand the implications of loan default(s)
  • Protect against tax liens and other conflicting encumbrances
  • Understand bankruptcy implications
  • Recognize and prevent violations of ECOA

Participants will learn a step-by-step process to recognize problems and take action to prevent loan loss exposure from faulty documentation.  Those involved in the loan review process will also find this program insightful as it emphasizes the fundamental building blocks of a well-documented commercial loan.

2.  Essentials of Article 9 of the Uniform Commercial Code

Revised Article 9 of the Uniform Commercial Code that went into effect in most states on July 1, 2001 and which has now been adopted by all states, along with recent uniform amendments, has substantially impacted how lenders perfect security interests in all collateral except real estate.  This seminar emphasizes the key changes under Revised Article 9 as well as recent amendments to this uniform law.  Participants will learn how to interpret and apply the principles of this important body of law that governs all transactions intended to create a security interest in personal property and/or fixtures.

The course will examine the most common problems encountered with UCC Article 9 and provide practical guidance in critical areas, including:

  • Impact of 2010 Amendments effective July 1, 2013
  • Basic scope of Revised Article 9
  • Collateral classification and description under Revised Article 9
  • Perfecting security interests in deposit accounts under Revised Article 9
  • Cover, in detail, the “where to file” rules under Revised Article 9
  • Creating enforceable security interests in various types of collateral
  • Different perfection methods under Revised Article 9 and when to use them
  • Lien priorities and lien searches
  • Enforcing unperfected security interests
  • Gaining priority through purchase money transactions

3.  Real Estate Mortgages/Deeds of Trust

Participants will learn the basic requirements of securing loans with real estate examining such problems as perfection, future advance clauses and loan renewals.  Participants will be exposed to proper “due diligence” procedures when a loan is secured by real estate including the use of title insurance, surveys and environmental audits.



Prevention of loan losses through implementation of proper loan structuring and documentation techniques is the objective of this seminar. This follow-up course to Principles of Loan Documentation will focus on more complex and problematic lending transactions, including securing loans with real estate with special emphasis on title insurance and surveys, and understanding the special problems of floor-plan and construction financing.  In addition, this seminar will address the provisions of recently revised Article 9 of the Uniform Commercial Code that deal with security interests in securities and other investment property, such as brokerage and trust accounts.


This seminar is designed for loan officers, loan review officers, internal auditors, documentation specialists and bank counsel.


  1. Floor-Plan Financing

Part I of this seminar will address key issues related to floor-plan financing, including: the floating lien concept under Article 9; perfection of a purchase money security interest; understanding the interests and rights of the parties involved; key components and provisions of the floor plan loan agreement; cooperative efforts between and among competing floor-plan lenders, successful monitoring of the floor-plan agreement to prevent sales out of trust,  and the special problems associated with a floor-plan borrower in default.

  1. Securing Loans with Investment Property Under Revised Article 9 of the Uniform Commercial Code

This segment of the seminar will review the scope and requirements of the recently revised Uniform Commercial Code dealing with perfecting security interests in stocks, bonds, mutual funds, investment accounts, security entitlements, and other investment property.  Participants will learn the scope, provisions and definitions under Revised Article 9 as well as key provisions from Article 8 of the UCC; the interaction of the revised Articles 8 and 9 of the Uniform Commercial Code and how to perfect and terminate security interests in certificated and uncertificated securities as well as securities accounts.

III.      Construction Financing

Section III of the seminar addresses potential problem areas unique to construction financing and how to avoid them. Participants will learn how to collateralize and document a construction loan (including preparation of the construction loan agreement and commitment letter). In addition, this segment will examine the all important subject of disbursement controls and limiting the risks posed by mechanic’s liens.  This section will also explore how the lender might increase its protection and reduce the administrative burdens of a construction loan by using a title insurance agent to handle disbursement of loan proceeds.

  1. Real Estate Secured Loans

The final portion of the program will deal with some of the unusual challenges related to loans secured by real estate.  Participants will learn how to create and perfect a security interest in real estate using a mortgage or deed of trust.  The program dissects a typical mortgage explaining its key provisions and their benefit to the mortgage lender.  The primary emphasis in this section of the program is on title insurance and surveys, how to understand them and use them effectively to enhance the protection of the lender’s security interest in real estate.  Included will be a detailed discussion about the lender’s title insurance policy, available endorsements which provide greater protection to the lender, understanding and obtaining deletion of the standard exceptions to coverage in title commitment letters, and the importance of real estate surveys and environmental due diligence to the lender taking real estate as collateral.


Each person attending the seminar will receive a comprehensive seminar manual designed to be used as a reference tool for those involved in the lending process. The seminar manual will include detailed checklists, reference material, a course outline and important and useful contractual documents and provisions.

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