What is a secure transaction? A secured transaction is one where you have an obligation, which is usually a promissory note. And there is a pledge of collateral that goes secures the note so that if the note is not paid, then the lender has a right to take back the collateral. So, the obligation is secured by what the collateral is and a real estate transaction. You have the bar or sign the note, and then they also sign a mortgage. And the mortgage states that if they don’t make the payments on the promissory note, they don’t pay the taxes or keep the property insured. Then you have a right if they default to foreclose and take their property away. So, you’re secured for the value of whatever the collateral is. If it is personal property, such as an automobile, they have, you signed what they call a security agreement.
And that’s where you’re pledging the automobile for the repayment of the loan. If you default on the loan and there that controlled by the uniform commercial code, which allows them self-help, which is usually a repossession of your automobile with a tow truck driver or whatever. And then they sell the, automobile at auction or whatever, to try and recoup as much as they can to repay a portion of the debt. So, sometimes the obligations are over secured in which case you’re entitled to any excess. If the collateral is not worth or not worth what is owed well, then you may be sued. And for the difference between the value of the collateral when it was sold or at the time of the sale, and how much is owed and a judgment entered against you. If you have any questions about a foreclosure action, or give me a call at (727) 847-2288.