As a financial institution, you understand the importance of monitoring and managing your liens, as this is essential to the success and growth of your business. When a lien lapses, it can cause serious complications and cause clients to lose trust in your institution. Thankfully, there are ways to stay on top of lien renewal and ensure that your portfolio is properly maintained at all times.
Do liens expire? Why renewing matters
The majority of liens expire within five years. That means that a full portfolio will continually have liens that are nearing their expiration. The problem that occurs is that if you need your liens or loans to extend beyond five years, then you need to file a lien extension. A UCC-3 Continuation will extend your interest in the property that is being secured beyond the initial five years.
However, you have a narrow window for a lien continuation. In most instances, you must apply for a lien continuation no greater and no less than six months before the UCC-1 financing statement is set to expire. If you fail to extend the lien within that period of time, then you will have to file a new UCC-1 financing statement and will lose your current position on the loan. That can have serious complications and negative consequences for your lending institution. Therefore, making sure that you stay on top of your lien renewals is key to the success of your business.
Lien management software
If you manage a large portfolio with many different liens and loans, then you won’t be able to manually track all of your continuations with accuracy. Lien management software or a lien management system will ensure that you keep up with all of the property in which you have an interest. It will also help you monitor the status of all of your liens in an easy, straightforward way and answer important questions like when to file a UCC continuation and how many times can a lien be renewed.
