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If collateral is taken, what three things are to be recorded on the bond affidavit?

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Final answer:

When collateral is taken, it is essential to record the description, value, and seizure conditions of the collateral on the bond affidavit for the security of the loan agreement.

Step-by-step explanation:

When collateral is taken to secure a loan, several critical details must be recorded on the bond affidavit to ensure the terms of the loan are legally documented and enforceable. These details include:

  1. The description of the collateral, which could include property or equipment details that the bank may seize and sell if the loan is not repaid.
  2. The value of the collateral at the time of the loan agreement to ascertain that it covers the amount borrowed.
  3. The conditions under which the collateral may be seized – for example, after how many missed payments or if certain other terms of the loan agreement are breached.

This documentation process ensures that both the lender and borrower have a clear and common understanding of what is at stake and the conditions under which the borrower is expected to repay the loan.

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