Does anyone have any knowledge or experience with a "General Security Agreement" ( GSA ) being placed by a mortgage lender and its impact on the borrower`s future credit rating?
We have a second mortgage lender that wants us to sign a GSA along with a personal guarantee to be signed by all the borrowers and their spouses. Our lawyer has said that the lender is being overly cautious in the terms of the personal guarantee and that " we could forget being approved for any future credit application even if it was for a cup of coffee " because of this GSA. The lender says that this is not the case and that a GSA is standard requirement of a personal guarantee. I went on the internet and researched a bit on the aspect of a GSA.. See this:
Under the Agreement, the borrower grants the lender a security interest in all of the borrower`s present and after-acquired personal property including inventory, equipment, accounts and book debts, and all proceeds therefrom, as security for loan financing, operating lines, or other credit facilities advanced by the lender to the borrower.
I understand that the GSA affects a borrower`s personal credit status even if it were taken by the corporation as it shows up on the borrower`s personal credit report and serves as a "lien" on future property purchases.
Any experience or advice ?
We have a second mortgage lender that wants us to sign a GSA along with a personal guarantee to be signed by all the borrowers and their spouses. Our lawyer has said that the lender is being overly cautious in the terms of the personal guarantee and that " we could forget being approved for any future credit application even if it was for a cup of coffee " because of this GSA. The lender says that this is not the case and that a GSA is standard requirement of a personal guarantee. I went on the internet and researched a bit on the aspect of a GSA.. See this:
Under the Agreement, the borrower grants the lender a security interest in all of the borrower`s present and after-acquired personal property including inventory, equipment, accounts and book debts, and all proceeds therefrom, as security for loan financing, operating lines, or other credit facilities advanced by the lender to the borrower.
I understand that the GSA affects a borrower`s personal credit status even if it were taken by the corporation as it shows up on the borrower`s personal credit report and serves as a "lien" on future property purchases.
Any experience or advice ?