The UCC is a comprehensive modernization of various statutes relating to commercial transactions including sales, leases, negotiable instruments, bank deposits and collections, funds transfers, letters of credit, bulk sales, documents of title, investment securities, and secured transactions.
The Permanent Editorial Board for the UCC, a joint committee of ALI and the Uniform Law Commission, assists in attaining and maintaining uniformity in state statutes governing commercial transactions by discouraging non-uniform amendments to the UCC by the states, and by approving and promulgating amendments to the UCC when necessary. Visit the PEB page for recent PEB commentaries and other documents.
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This report explains the application of UCC Articles 3 and 9 to provide guidance in (i) identifying the person who is entitled to enforce the payment obligation of the maker of a mortgage note, and to whom the maker owes that obligation; and (ii) determining who owns the rights represented by the note and mortgage.
PEB Report on Application of the UCC to Selected Issues Relating to Mortgage Notes (corrected 11/16/2011)
Electronic | 1UCCNOV11E | 2011 | 17 pages
Issues relating to the transfer, ownership, and enforcement of mortgage notes are primarily governed by two Articles of the UCC: (1) in cases in which the mortgage note is a negotiable instrument, Article 3 provides rules governing the obligations of parties on the note and the enforcement of those obligations; and (2) in cases involving either negotiable or non-negotiable notes, Article 9 contains important rules governing how ownership of those notes may be transferred, the effect of the transfer of ownership of the notes on the ownership of the mortgages securing those notes, and the right of the transferee, under certain circumstances, to record its interest in the mortgage in the applicable real estate recording office.
This is the final version of the amendments to Article 9 of the UCC after approval by both the ALI and the ULC.
Electronic | 1UCCPFTE | 2010 | 129 pages
Part one
Amendments to the official text and related comments
Section 9-102. Definitions and index of definitions
Section 9-105. Control of electronic chattel paper
Section 9-307. Location of debtor
Section 9-311. Perfection of security interests in property subject to certain statutes, regulations, and treaties.
Section 9-316. Continued perfection of security interest following effect of change in governing law
Section 9-317. Interests that take priority over or take free of security interest or agricultural lien
Section 9-326. Priority of security interests created by new debtor
Section 9-406. Discharge of account debtor; notification of assignment; identification and proof of assignment; restrictions on assignment of accounts, chattel paper, payment intangibles, and promissory notes ineffective
Section 9-408. Restrictions on assignment of promissory notes, health-care-insurance receivables, and certain general intangibles ineffective
Section 9-502. Contents of financing statement; record of
mortgage as financing statement; time of filing financing statement
Section 9-503. Name of debtor and secured party
Section 9-507. Effect of certain events on effectiveness of financing statement
Section 9-515. Duration and effectiveness of financing statement; effect of lapsed financing statement
Section 9-516. What constitutes filing; effectiveness of filing.
Section 9-518. Claim concerning inaccurate or wrongfully filed record
Section 9-521. Uniform form of written financing statement and amendment
Section 9-607. Collection and enforcement by secured party
Section 9-801. Effective date
Section 9-802. Savings clause
Section 9-803. Security interest perfected before effective date
Section 9-804. Security interest unperfected before effective date
Section 9-805. Effectiveness of action taken before effective date
section 9-806. When initial financing statement suffices to continue effectiveness of financing statement.
Section 9-807. Amendment of pre-effective-date financing
statement
Section 9-808. Persons entitled to file initial financing statement or continuation statement
Section 9-809. Priority
Part Two
Modifications to the comments unaccompanied by amendments to the official text section 9-102. Definitions and index of definitions
Section 9-104. Control of deposit account
Section 9-109. Scope
Section 9-301. Law governing perfection and priority of security interests
Section 9-501. Filing office
Section 9-307. Location of debtor
Section 9-322. Priorities among conflicting security interests in and agricultural liens on same collateral
section 9-509. Persons entitled to file a record
Section 9-322. Priorities among conflicting security interests in and agricultural liens on same collateral
Section 9-326. Priority of security interests created by new debtor
Section 9-330. Priority of purchaser of chattel paper or instrument
Section 9-509. Persons entitled to file a record
Section 9-512. Amendment of financing statement
Section 9-602. Waiver and variance of rights and duties
Section 9-610. Disposition of collateral after default
Section 9-624. Waiver
Section 9-610. Disposition of collateral after default
Section 9-611. Notification before disposition of collateral.
Section 9-613. Contents and form of notification before disposition of collateral: general
Section 9-616. Explanation of calculation of surplus or deficiency
Section 9-621. Notification of proposal to accept collateral
Section 9-625. Remedies for secured party’s failure to comply with article
Section 9-706. When initial financing statement suffices to continue effectiveness of financing statement
Section 8-103. Rules for determining whether certain obligations and interests are securities or financial assets article 11: effective date and transition provisions
AMENDMENTS TO UNIFORM COMMERCIAL CODE
ARTICLES 1, 3, 8, AND 9
Prefatory Note................................................................................................................................. 1
SECTION 1-201. GENERAL DEFINITIONS............................................................................ 3
SECTION 3-103. DEFINITIONS................................................................................................. 6
SECTION 3-104. NEGOTIABLE INSTRUMENT..................................................................... 7
SECTION 3-201. NEGOTIATION.............................................................................................. 8
SECTION 3-203. TRANSFER OF INSTRUMENT; RIGHTS ACQUIRED BY TRANSFER. 9
SECTION 3-301. PERSON ENTITLED TO ENFORCE INSTRUMENT............................... 11
SECTION 3-302. HOLDER IN DUE COURSE....................................................................... 12
SECTION 3-308. PROOF OF SIGNATURES AND STATUS AS HOLDER IN DUE COURSE. 14
SECTION 3-309. ENFORCEMENT OF LOST, DESTROYED, OR STOLEN
INSTRUMENT................................................................................................................. 15
SECTION 3-412. OBLIGATION OF ISSUER OF NOTE OR CASHIER’S CHECK........... 16
SECTION 3-415. OBLIGATION OF INDORSER................................................................... 17
SECTION 3-416. TRANSFER WARRANTIES........................................................................ 19
SECTION 3-504. EXCUSED PRESENTMENT AND NOTICE OF DISHONOR................. 21
SECTION 3-602. PAYMENT..................................................................................................... 22
SECTION 3-604. DISCHARGE BY CANCELLATION OR RENUNCIATION.................. 23
SECTION 8-103. RULES FOR DETERMINING WHETHER CERTAIN OBLIGATIONS AND INTERESTS ARE SECURITIES OR FINANCIAL ASSETS...................................... 25
SECTION 9-102. DEFINITIONS AND INDEX OF DEFINITIONS...................................... 25
SECTION 9-105. CONTROL OF ELECTRONIC CHATTEL PAPER; CONTROL OF ELECTRONIC MORTGAGE NOTE........................................................................................................ 28
SECTION 9-108. SUFFICIENCY OF DESCRIPTION............................................................ 30
SECTION 9-203. ATTACHMENT AND ENFORCEABILITY OF SECURITY INTEREST; PROCEEDS; SUPPORTING OBLIGATIONS; FORMAL REQUISITES......................................... 31
SECTION 9-208. ADDITIONAL DUTIES OF SECURED PARTY HAVING CONTROL OF COLLATERAL................................................................................................................ 32
SECTION 9-301. LAW GOVERNING PERFECTION AND PRIORITY OF SECURITY INTERESTS............................................................................................................................................ 34
SECTION 9-308. WHEN SECURITY INTEREST OR AGRICULTURAL LIEN IS PERFECTED; CONTINUITY OF PERFECTION.................................................................................. 37
SECTION 9-310. WHEN FILING REQUIRED TO PERFECT SECURITY INTEREST OR AGRICULTURAL LIEN; SECURITY INTERESTS AND AGRICULTURAL LIENS TO WHICH FILING PROVISIONS DO NOT APPLY..................................................................... 38
SECTION 9-312. PERFECTION OF SECURITY INTERESTS IN CHATTEL PAPER, DEPOSIT ACCOUNTS, DOCUMENTS, GOODS COVERED BY DOCUMENTS, INSTRUMENTS, INVESTMENT PROPERTY, LETTER-OF-CREDIT RIGHTS, AND MONEY; PERFECTION BY PERMISSIVE FILING; TEMPORARY PERFECTION WITHOUT FILING OR TRANSFER OF POSSESSION................................................................................................................... 39
SECTION 9-313. WHEN POSSESSION BY OR DELIVERY TO SECURED PARTY PERFECTS SECURITY INTEREST WITHOUT FILING................................................................ 41
SECTION 9-314. PERFECTION BY CONTROL..................................................................... 43
SECTION 9-322. PRIORITIES AMONG CONFLICTING SECURITY INTERESTS IN AND AGRICULTURAL LIENS ON SAME COLLATERAL............................................... 43
SECTION 9-330. PRIORITY OF PURCHASER OF CHATTEL PAPER, ELECTRONIC MORTGAGE NOTE, OR INSTRUMENT............................................................................................. 44
SECTION 9-406. DISCHARGE OF ACCOUNT DEBTOR; NOTIFICATION OF ASSIGNMENT; IDENTIFICATION AND PROOF OF ASSIGNMENT; RESTRICTIONS ON ASSIGNMENT OF ACCOUNTS, CHATTEL PAPER, PAYMENT INTANGIBLES, AND PROMISSORY NOTES INEFFECTIVE................................................................................................................. 46
SECTION 9-408. RESTRICTIONS ON ASSIGNMENT OF PROMISSORY NOTES, HEALTH-CARE-INSURANCE RECEIVABLES, AND CERTAIN GENERAL INTANGIBLES INEFFECTIVE............................................................................................................................................. 47
SECTION 9-619. TRANSFER OF RECORD OR LEGAL TITLE.......................................... 50
AMENDMENTS TOUNIFORM COMMERCIAL CODE
SECTIONS 9-406 AND 9-408
Memorandum................................................................................................................................ 51
Amendments to Uniform Commercial Code Sections 9-406 and 9-408...................................... 52
Appendix A. Definitions from the National Electronic Mortgage Repository Act of 2018 (draft of March 30, 2018)............................................................................................................................ 57
Appendix B. Draft National Mortgage Note Repository Act of 2018..................................... 59
Tentative Draft No. 1 includes Amendments to Articles 1, 3, 8, and 9 (electronic mortgage notes); and Amendments to Sections 9-406 and 9-408 (anti-assignment overrides). The draft was approved by the membership at the 2018 Annual Meeting, subject to the discussion at the Meeting and the usual editorial prerogative. The Amendments are subject to approval by the Uniform Law Commission at its annual meeting in July 2018.
AMENDMENTS TO UNIFORM COMMERCIAL CODE
ARTICLES 1, 3, 8, AND 9
Prefatory Note................................................................................................................................. 1
SECTION 1-201. GENERAL DEFINITIONS............................................................................ 3
SECTION 3-103. DEFINITIONS................................................................................................. 6
SECTION 3-104. NEGOTIABLE INSTRUMENT..................................................................... 7
SECTION 3-201. NEGOTIATION.............................................................................................. 8
SECTION 3-203. TRANSFER OF INSTRUMENT; RIGHTS ACQUIRED BY TRANSFER. 9
SECTION 3-301. PERSON ENTITLED TO ENFORCE INSTRUMENT............................... 11
SECTION 3-302. HOLDER IN DUE COURSE....................................................................... 12
SECTION 3-308. PROOF OF SIGNATURES AND STATUS AS HOLDER IN DUE COURSE. 14
SECTION 3-309. ENFORCEMENT OF LOST, DESTROYED, OR STOLEN
INSTRUMENT................................................................................................................. 15
SECTION 3-412. OBLIGATION OF ISSUER OF NOTE OR CASHIER’S CHECK........... 16
SECTION 3-415. OBLIGATION OF INDORSER................................................................... 17
SECTION 3-416. TRANSFER WARRANTIES........................................................................ 19
SECTION 3-504. EXCUSED PRESENTMENT AND NOTICE OF DISHONOR................. 21
SECTION 3-602. PAYMENT..................................................................................................... 22
SECTION 3-604. DISCHARGE BY CANCELLATION OR RENUNCIATION.................. 23
SECTION 8-103. RULES FOR DETERMINING WHETHER CERTAIN OBLIGATIONS AND INTERESTS ARE SECURITIES OR FINANCIAL ASSETS...................................... 25
SECTION 9-102. DEFINITIONS AND INDEX OF DEFINITIONS...................................... 25
SECTION 9-105. CONTROL OF ELECTRONIC CHATTEL PAPER; CONTROL OF ELECTRONIC MORTGAGE NOTE........................................................................................................ 28
SECTION 9-108. SUFFICIENCY OF DESCRIPTION............................................................ 30
SECTION 9-203. ATTACHMENT AND ENFORCEABILITY OF SECURITY INTEREST; PROCEEDS; SUPPORTING OBLIGATIONS; FORMAL REQUISITES......................................... 31
SECTION 9-208. ADDITIONAL DUTIES OF SECURED PARTY HAVING CONTROL OF COLLATERAL................................................................................................................ 32
SECTION 9-301. LAW GOVERNING PERFECTION AND PRIORITY OF SECURITY INTERESTS............................................................................................................................................ 34
SECTION 9-308. WHEN SECURITY INTEREST OR AGRICULTURAL LIEN IS PERFECTED; CONTINUITY OF PERFECTION.................................................................................. 37
SECTION 9-310. WHEN FILING REQUIRED TO PERFECT SECURITY INTEREST OR AGRICULTURAL LIEN; SECURITY INTERESTS AND AGRICULTURAL LIENS TO WHICH FILING PROVISIONS DO NOT APPLY..................................................................... 38
SECTION 9-312. PERFECTION OF SECURITY INTERESTS IN CHATTEL PAPER, DEPOSIT ACCOUNTS, DOCUMENTS, GOODS COVERED BY DOCUMENTS, INSTRUMENTS, INVESTMENT PROPERTY, LETTER-OF-CREDIT RIGHTS, AND MONEY; PERFECTION BY PERMISSIVE FILING; TEMPORARY PERFECTION WITHOUT FILING OR TRANSFER OF POSSESSION................................................................................................................... 39
SECTION 9-313. WHEN POSSESSION BY OR DELIVERY TO SECURED PARTY PERFECTS SECURITY INTEREST WITHOUT FILING................................................................ 41
SECTION 9-314. PERFECTION BY CONTROL..................................................................... 43
SECTION 9-322. PRIORITIES AMONG CONFLICTING SECURITY INTERESTS IN AND AGRICULTURAL LIENS ON SAME COLLATERAL............................................... 43
SECTION 9-330. PRIORITY OF PURCHASER OF CHATTEL PAPER, ELECTRONIC MORTGAGE NOTE, OR INSTRUMENT............................................................................................. 44
SECTION 9-406. DISCHARGE OF ACCOUNT DEBTOR; NOTIFICATION OF ASSIGNMENT; IDENTIFICATION AND PROOF OF ASSIGNMENT; RESTRICTIONS ON ASSIGNMENT OF ACCOUNTS, CHATTEL PAPER, PAYMENT INTANGIBLES, AND PROMISSORY NOTES INEFFECTIVE................................................................................................................. 46
SECTION 9-408. RESTRICTIONS ON ASSIGNMENT OF PROMISSORY NOTES, HEALTH-CARE-INSURANCE RECEIVABLES, AND CERTAIN GENERAL INTANGIBLES INEFFECTIVE............................................................................................................................................. 47
SECTION 9-619. TRANSFER OF RECORD OR LEGAL TITLE.......................................... 50
AMENDMENTS TOUNIFORM COMMERCIAL CODE
SECTIONS 9-406 AND 9-408
Memorandum................................................................................................................................ 51
Amendments to Uniform Commercial Code Sections 9-406 and 9-408...................................... 52
Appendix A. Definitions from the National Electronic Mortgage Repository Act of 2018 (draft of March 30, 2018)............................................................................................................................ 57
Appendix B. Draft National Mortgage Note Repository Act of 2018..................................... 59
Tentative Draft No. 1 includes Amendments to Articles 1, 3, 8, and 9 (electronic mortgage notes); and Amendments to Sections 9-406 and 9-408 (anti-assignment overrides). The draft was approved by the membership at the 2018 Annual Meeting, subject to the discussion at the Meeting and the usual editorial prerogative. The Amendments are subject to approval by the Uniform Law Commission at its annual meeting in July 2018.