Negotiable Collateral is collateral held in a dual controlled secure vault area in the Loan Servicing Department and consists of: 

• Assignment of Note(s) and Mortgage(s)
• Stocks 
• Bonds
• Title(s) 
• Life insurance policies 
• Certificate of Deposits drawn on another financial institution

See Loan Satisfactions and Collateral Release/Partial Release for additional information.

Receipt:

To create a collateral receipt, do the following:

• Complete the Negotiable Transmittal Form FMI (#33020) itemizing all collateral being sent.
  • Description of collateral  
    • Name of stock (common or preferred), certificate number, and number of shares (never send stock powers with certificates) 
    • Name of bond and dollar amount and whose name the collateral is listed. 
    • Life insurance policies should have name of insurance company, dollar amount, policy number and client name listed.
• Place the collateral item(s) and the transmittal form in the blue lock bag and keep the key. (Loan Servicing has a master key.)
• If discrepancies are noted, Loan Servicing will contact the Lender.

Reminders: 

• Original stock power(s):
  • Must have one per stock certificate 
• Regulation U-1 form:            
  • Must have on stock/bond secured loans > $100,000 are to be sent to Loan Servicing with the remaining loan documents.
• The blue lock bag must never be used for other delivery purposes.
• If additional loans are to be secured by collateral already held in the Vault, the Lender must notify Loan Servicing so the Vault Records can be updated with the additional loan information. 

Paid Outs:

There is a 10 business day wait period from the payoff posting date before releasing Collateral and/or Promissory Notes. This timeframe ensures the payoff source will not be returned. The Paid Out Associate will request that the lender send their blue lock bag to Loan Servicing so the negotiable collateral can be returned to the client.

• Stock power(s) and Reg U-1 form will be destroyed.
• The signed Return Receipt will be placed in the paid out file.

Monitoring:

• Loan Servicing performs annual verifications of all collateral in the Negotiable Collateral Vault.  
• If there are any discrepancies, the loan officer of record is notified for correction. 
• Verification reports and any discrepancies are distributed to senior management.