Security interests are a cornerstone of finance and lending. Secured lending relates directly with the amount of risk a lender faces when extending credit to a borrower. A secured transaction is one in which a lender or seller acquires an interest in the property sold or purchased with the funds provided to the borrower or debtor. The law of secured transactions regulates the relationship between the secured lender and the borrower/debtor. It also regulates the relationship (or rights) between multiple secured lenders. This chapter introduces the concept of a security interest. It begins by exploring security interests in the context of real property before moving on to personal property. It examines the rights of the secured party and the debtor in numerous situations (or transactions) involving security interests. Notably, it explains the key concept of priority among secured parties. Priority is instrumental in assessing the risk to the secured party in a given transaction.
VOCABULARY & CONCEPTS