Pursuant to an internal audit, we will be making the following changes to our generic security agreement, which is used for loans secured by shares in cooperative units located in Florida, Illinois, New Jersey, and New York:
- Including a new Section 13 which specifies what actions constitute a default under the terms of the security agreement. These conditions are when:
- The borrower does not comply with the provisions of the promissory note, security agreement, or cooperative lease;
- The borrower does not pay the full amount of each payment when it is due or when the borrower defaults under the terms of the note;
- The borrower does not make any payments required by the lease or of the cooperative corporation on time;
- The lease is terminated or it is assigned or sold without the lender’s written consent;
- The borrower sublets the apartment or assigns or sells the shares in the cooperative without the lender’s written consent;
- The borrower fails to pay any amounts owed due to a judgement, tax deficiency, filing, or recording charge;
- Any governmental authority takes possession over any substantial part of the shares;
- The borrower fails to provide the lender documentation required under the security agreement (g. certificates of the shares, a duplicate of the original lease, etc.);
- The borrower has made any conflicting security interest;
- The borrower dies, becomes insolvent or bankrupt, or any legal proceeding is instituted against the borrower; or
- The borrower makes any statement or representation which is fraudulent or incorrect.
- Enhancing the assignment language currently located in Section 29 (renumbered Section 30) to explicitly state that the lender has the right to assign the security interest to someone else, subject to applicable law;
- Enhancing the language in Section 5, so that the borrower promises to pay the amounts under both the promissory note and loan security agreement, rather than just the note (making it more compatible with the terms under Section 3, which stipulate that the borrower is liable for amounts owed under both documents);
- Minor grammatical changes throughout the document; and
- Minor punctuational changes throughout the document, most notably applying the Oxford standards of commas uniformly.
These changes will take effect on March 20, 2018. If you have any questions or concerns about these changes, please contact Client Support at 1.800.497.3584.