Uniform Commercial Code and Mezzanine Financing
The Protection You Need on Mezzanine Loans
With greater risk comes greater reward, as well as a greater need to have your interests protected. Whether you are looking to explore mezzanine loans as an option for your next project or have experience with the UCC, our team offers comprehensive solutions that protects your security interest in mezzanine loan transactions.
Understanding the Uniform Commercial Code
What is mezzanine financing?
A mezzanine loan is an equity loan secured by pledges of the ownership interests in the titleholder. In other words, the mezzanine lender receives a security interest in the owner of the property rather than the property itself.
Why are mezzanine loans becoming more common?
Due to the more conservative rules regulating banks, lenders are requiring lower LTV’s, leaving more of the property’s equity locked up. Mezzanine loans serve to bridge that gap by unlocking more equity in the property.
How does the outcome of a foreclosure differ?
Upon foreclosure of a traditional real estate loan, the lender becomes the owner of the real estate subject only to matters prior in right. Upon foreclosure of a mezzanine loan, the lender becomes the owner of the property owner subject to all matters of record. Therefore, mezzanine loans are considered junior loans.
What title insurance products are available to mezzanine lenders?
Stewart Title offers two title insurance products for mezzanine lenders:
a) A Mezzanine Endorsement to an Owner’s Policy of Title Insurance
b) Stewart UCC ONE Lender’s Policy
Can UCC policies be co-insured?
Yes, co-insurance is available for UCC lender’s policies.
Why Stewart Title?
Since 2002, Stewart Title has been protecting personal property interests for lenders when closing mezzanine financing deals. Our industry-leading customer service provides fast turnaround, which allows us to close deals with tight deadlines.
About UCC ONE, Our Title Insurance Solution for Mezzanine Lenders
UCC ONE offers protection and a dedicated UCC team to help you meet tight deadlines no matter the size of your loan. Work with the industry’s best underwriters and get the protection you need on your mezzanine loans.
Article 9 Comprehensive Plus
The Article 9 Comprehensive Plus Lender’s Policy is Stewart’s UCC policy. It insures the attachment, perfection and priority of the lender’s security interest in the personal property, being the ownership interest in the property owner.
Mezzanine Endorsement to an Owner’s Policy of Title Insurance
A Mezzanine Endorsement to an Owner’s Policy of Title Insurance may be issued with a new owner’s policy or to an existing one (where permitted by local regulations). The mezzanine endorsement provides an assignment of payments under the owner’s policy to the mezzanine lender. It also includes non-imputation coverage and acknowledges that coverage will continue notwithstanding the transfer of ownership interests to the insured.
Place a UCC Order
Since 2002, Stewart Title has been protecting personal property interests for lenders when closing mezzanine financing deals. Place your order to work with our industry-leading team for a customer-focused experience.