#banking #contract #prepositions #advanced

You will see an extract from a mortgage agreement with missing prepositions. Read the contract carefully and fill in the gaps with the correct prepositions

The extract is Security Interest Clause from a Mortgage Agreement. Security interest means zabezpieczenie wierzytelności in Polish. If you want to read more about it scroll down and read the Note.

Exercise

Security Interest Clause
Grant of Security Interest: The Borrower hereby grants the Lender a first-priority security interest (1 p.) all present and future rights, title, and interest (1 p.) the mortgaged property, including but not limited to the land, buildings, fixtures, and any improvements thereon.

Covenants of the Borrower: The Borrower shall maintain the property (1 p.) good condition and repair, and shall comply (1 p.) all applicable laws and regulations. Any failure to do so shall constitute an event of default (1 p.) this agreement.

Events of Default: In the event of default, including failure to make timely payments (1 p.) the mortgage loan, the Lender shall have the right to enforce its security interest (1 p.) accordance with applicable law and may pursue remedies including foreclosure or sale of the mortgaged property.

Insurance Requirements: The Borrower agrees to maintain insurance coverage (1 p.) the mortgaged property.

Governing Law: This mortgage agreement shall be governed (1 p.) the laws of the jurisdiction in which the mortgaged property is located.

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Note

What is a Security Interest?
A security interest is a legal right that a lender (creditor) takes in a borrower's property (collateral) to secure repayment of a loan or other obligation. If the borrower defaults (fails to meet their obligations), the lender can enforce the security interest by repossessing or selling the collateral.

Key Features of a Security Interest:

1.  Collateral: The asset pledged as security (e.g., real estate, vehicles, equipment).

2.  Priority: Determines which creditor gets paid first if the borrower has multiple debts.

3.  Enforceability: The lender can seize the collateral if the borrower defaults.

Example in a Mortgage Agreement:
When a person takes out a mortgage, the house serves as collateral. The bank (lender) has a security interest in the house, meaning if the borrower fails to repay the loan, the bank can foreclose on the property.