Contributed By Allen Matkins Leck Gamble Mallory & Natsis LLP
Lenders must follow the proper procedural rules in enforcing their rights. They need to give notice of default and then sale, in addition to any rights given to the borrower in the loan documents. Borrowers typically have notice and opportunity to cure a default in five to ten business days. Once those have been exhausted, a lender can give a 90-day notice of default and thereafter a 21-day notice of sale. Other than a tax lien for non-payment of property taxes, the lender’s security interest takes priority over all after-acquired security interests.