ABSTRACT
Formal security interests in real property are intended to secure repayment of the debt based upon the value of the real property. At the closing of any loan on real property, there are typically many other documents in addition to those described above; however, they do not create a security interest in real property. It is not uncommon to find properties that are subject to second and even third mortgages. The first mortgage has the highest priority, the second is below the first, and so on. As noted in this section on security interest in real property, many of the provisions of the financing statements are the same. Federal law provides two options for states that allow holders of security interests in farm products to preserve those interests in the hands of buyers in the ordinary course of business. A statutory trust is a legal fiction designed to segregate funds generated by selling agricultural products from a company's other assets.
