Asked and AnsweredI'm about to pay off my co-op loan. What evidence will I have from the bank that the loan has actually been paid off?
When you closed on the purchase of your co-op apartment (actually, when you purchased the cooperative shares allocated to your apartment), the bank retained the original stock certificate evidencing your ownership of your shares as well as your original proprietary lease, which gave you the appurtenant right to occupy your specific apartment. In addition, the bank filed a “UCC-1 Financing Statement” in the county where the apartment is located, letting the world know that the bank had a “security interest" in the said stock and lease, which was created as collateral for the loan the bank made to you at closing. When you pay off the cooperative loan, the bank will return the original stock and lease to you and will also forward a “UCC-3 Termination Statement” that must be filed in order to terminate the bank’s security interest in your cooperative shares. In most cases, the delivery of the collateral documents and UCC-3 Termination Statement takes place at the closing when you sell your apartment. When you pay off the loan prior to the sale of the apartment, the bank will actually forward the collateral documents to you, together with the “UCC-3” that you must file in order to terminate the bank’s security interest. It is probably a good idea to call the customer service department of your bank to let them know that you are about to pay off the loan, to insure that the collateral documents and lien release will be forwarded to the correct address when the final payment is received. If you have paid off your loan, when it’s time to sell your apartment, you will be expected to deliver the stock and lease as well as clear title to your shares. Make sure you obtain the stock and lease and file a UCC-3 Termination Statement as soon as possible after the glorious day that your obligations to your lender cease to exist.