I want to share with you all problems I see in the industry with regard to UCC-1s and UCC-3s:

Problem #1 - Companies order searches really don't know the law- and Neither do Many Abstractors.  In Texas, our financing statement filings are covered under Section 9 of the Texas Business & Commerce Code (Duration and Effectiveness of Financing Statement, etc, more particularly parts of 9.515).  The problem with these is that companies assume that all financing statements expire within 5 years of the date filed.  #1 - that is totally untrue.  Time spans depend on the type of attachment (ie, a mobile home - 30 years) or the way in which it is secured - if secured by D/T Financing Statement - 30 years or the life of the loan.  This provision limits when continuations are valid to be filed and when the start date of 5 yr UCC begin - not the date of the filing of the UCC3, but rather the date the original UCC1 would have expired.  (please see this code as published online).  Many companies are ordering the search of UCCs only and not a search of the D/Ts to find out just how long these individual UCC1 are applicable for.   

Problem #2 - Companies are not Listing the Addl Debtors and Legal to UCC3s  Let me give you an example of the problem with this.  #1 if there are 2 debtors and a UCC3 is filed to change the Secured Party without the name of additional debtor and/or legal and I am given the name of the second debtor name to search UCCs only, I will not be able to pull up the UCC3 under this second debtor.  It will come up a clear.  Our county clerks do not - I repeat do not index with information relating back to the original search - the only way I can pick this up is a cross-reference search of the legal description - so please always attach legal descriptions to the UCC3s - this may keep you from subsequent claims.  Without the second debtor name, it would never be picked up with a name only search such as a UCC search, but would be picked up in a current owner search in a cross-referenced legal search.  This another reason why it is so important not to search online records.  If this was properly filed with the legal, it would be picked up in the cross-reference search only available at the courthouse, but not with online records. 

As I don't want you to assume my knowledge of any legal nature nor do I want to be accused of practicing law without a license, I encourage all companies and individuals to read this Code, as it is available online.  Perhaps I should have quoted the words exactly.

Thank you for letting me explain this - I thought this would be the easiest way to inform all the companies I am so concerned with these filings.  It is a major problem out there.  I offer you all this information, as it is my desire to make our industry better, by any means in which I can offer assistance.

Lisa
Professional Research