Tax Update Blog: Permalink

« Previous · Tax Update Blog Home · Next »

BLOCKING AND TACKLING IN THE COMMERCIAL LOAN DEPARTMENT

September 19, 2008

They say that you win football games by doing the little things right - blocking and tackling. The Iowa Banking Law Blog has been running double sessions in doing the little things right when making commercial loans. For example:

Although the mortgage of a construction lender is generally entitled to priority over any mechanics lien claimant who starts its work after the mortgage is filed, a construction mortgage will be inferior to the claim of any mechanics lien claimant who starts work prior to the recording of the construction mortgage. Consequently, the construction lender must take two steps to protect the priority of its mortgage. First, it must inspect the property to confirm that no work has commenced at the site prior to the recording of the construction mortgage. Second, in the event the inspection reveals that any work has begun at the site, subordinations must be obtained from every contractor who has provided such labor or materials.

Tags: Iowa Banking Law Blog.