ACCT350 Chapter Notes - Chapter 26: Loan Guarantee, Consumer Credit Protection Act Of 1968, Public Auction
19 Sep 2017
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Prima company is the borrower-debtor and urban bank is the lender-creditor. Arnold without taking an interest in collateral for the loan (unsecured) mary is laying on arnold"s credit standing. If arnold defaults, mary has no collateral to foreclose on and will sue arnold to recover the unpaid loan amount. The lender requires her to give it a security interest in the car to secure the loan (the car is collateral for the loan). Sarah defaults and fails to make payments, the lender can repossess the car. Real property financing: owners of real estate can create security interest in real property, this occurs if an owner borrows money from a lender and pledges real estate as security for repayment of the loan, mortgage. An arrangement where an owner of real property borrows money from a lender and pledges the real property as collateral to secure the repayment of the loan.
