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ComplianceFinanceSeptember 27, 2017

Debtor and UCC monitoring

Don’t just take it from us; here is what one of our customers had to say about monitoring:

“The monitoring has provided information on the entity status and that has been helpful. It allows us to contact the customer right away and have the issue corrected. We’ve also had several alerts of name changes recently that clients had not notified us about and knowing when it happens gives us ample time to amend our UCCs.”

You may have never realized how crucial debtor and UCC monitoring may be in managing your portfolio. Making sure a loan is secure is the undisputed “headache” of UCC life for most secured parties. A lender simply has to know what’s going on with the parties to whom they have loaned money.

Monitoring of debtors is one way to ensure transparency of activity. While a difficult task to achieve in a do-it-yourself environment, there are plenty of opportunities to partner with specialists that can put together a program to conduct debtor due diligence.

Monitoring has a myriad of advantages. In particular, it can alert you if someone is trying to negatively impact your rights, when a debtor is trying to pledge collateral to other parties, or if you have terminated a filing by accident. However, there are always limits, even with monitoring. For example, a debtor can start a brand-new business entity that isn’t being monitored, or can re-incorporate an existing business in another state. Different systems in different states still struggle to communicate with one another and there are many cases of debtors simply packing up and moving down the road to start again. And this is only taking into account single parties.

It quickly becomes obvious there’s an enormous amount of information to track and ensure it is correct. Unfortunately, it also is obvious that a lender is on their own. The states do not help to monitor for you at all.  States file and maintain records, and for better or for worse, it’s not their responsibility to keep track of your filings. That burden remains squarely on the back of the lender.

The lack of uniformity across systems is part of the problem. Few states have modern databases that can help you file and monitor UCCs. Remember, even if a party submits their filing electronically, a state employee is entering information into that system manually. That means, believe it or not, they can (and do) get it wrong.

Monitoring of your UCC portfolio is one of the features offered within iLien.  As part of a complete management package, you can be sure to have your finger on the pulse of your loans.  Contact us today to learn more about this exciting option for iLien.
 
Amanda Rasizzi of Lien Solutions
Director of Marketing
Amanda Rasizzi is Director of Marketing for Wolters Kluwer Lien Solutions. She oversees all marketing activities for the company. Rasizzi and her team communicate the company’s array of lien management, risk management, and life-of-loan solutions to prospects and clients, support the selling efforts of the Lien Solutions organization, and position the organization as an industry market leader.