# Draft Mortgage And Security Agreement > Guides drafting of a commercial mortgage and security agreement by reconciling the deal terms, title materials, appraisal, operating documents, and renovation materials into a complete security instrument with a companion issues memorandum. - Skill: `finchipaiorg/draft-mortgage-and-security-agreement` (Agent Skill) - Install (CLI): `npx skillmds@latest add finchipaiorg/draft-mortgage-and-security-agreement` - Raw SKILL.md: https://api.skillmd.com/api/skills/finchipaiorg/draft-mortgage-and-security-agreement/raw - Safety review: pending - Works with: Claude Code, Claude.ai, OpenAI Codex - Category: Security - Author: FinchipAIOrg (https://skillmd.com/u/finchipaiorg) - Updated: 2026-09-22 - Page: https://skillmd.com/skills/finchipaiorg/draft-mortgage-and-security-agreement --- # Skill: Draft Mortgage and Security Agreement for Commercial Real Estate Loan ## 1. Subject-matter triage - Determine whether the transaction is a straight mortgage loan, a deed-of-trust transaction, or a mortgage plus separate security agreement structure; draft to the governing state-law form and the lender’s chosen filing mechanics. - Identify whether the loan includes construction or renovation funding, rents/leases collateral, or a fixture filing component, because each requires tailored grant, perfection, and covenant language. - Confirm whether the source set contains a title commitment, survey, organizational authority materials, environmental diligence, rent roll/lease abstracts, and any prior counsel comments; if a source is absent, flag the gap rather than assuming standard language resolves it. ## 2. Failure modes the skill is correcting - Baseline drafts from the term sheet alone and misses prior-counsel revisions, lender side conditions, or title-driven carveouts that must be carried into the final instrument. - Baseline fails to reconcile the mortgage with title exceptions, resulting in a permitted-exception schedule that does not match the commitment or endorsed-over liens. - Baseline omits or under-drafts the security interest in fixtures, personal property, rents, leases, proceeds, and related intangibles, leaving the collateral package incomplete under Article 9 and real-property law. - Baseline treats renovation or draw provisions as boilerplate and omits budget, retainage, inspection, or reserve mechanics that must align with the funding documents. - Baseline overlooks organizational authority and transfer restrictions, risking an execution defect or an unenforceable lien against the borrower. - Baseline produces only the mortgage and skips the companion issues memorandum, leaving open items untracked and unresolved. - Baseline states legal conclusions without tying them to the governing document or authority, which weakens the drafting rationale and the issues analysis. ## 3. Legal frameworks / domain conventions that apply - The mortgage grants a lien on real property; the security-agreement component should separately cover fixtures, equipment, personal property, accounts, contract rights, permits, proceeds, and other collateral categories as appropriate under UCC Article 9. - Fixture filing and real-property recording conventions should be reflected in the draft so the lender can perfect against competing interests in fixtures and related collateral. - Assignment-of-rents and assignment-of-leases language should be drafted to capture current and future leases, subject to applicable local law and any required license-back for ordinary-course collections before default. - Title commitment integration is mandatory: the mortgage’s permitted exceptions must track the commitment’s schedule of exceptions, and any non-permitted matter should be identified for resolution before recording. - Borrower authorization must be supported by the governing organizational documents; execution authority, member/manager consent, and any transfer- or encumbrance-restriction waivers should be reflected or cross-referenced. - Environmental allocation should align with the environmental diligence record and any separate indemnity, recognizing common lender practice under CERCLA and related state environmental statutes. - If the loan funds renovation or construction, the mortgage and related collateral documents should align with the budget, draw conditions, inspection rights, and reserve or retainage mechanics. - Existing leases and the rent roll should be treated as operative collateral and diligence inputs; subordination, non-disturbance, and attornment concepts should be addressed where the deal requires them. - Default and remedies provisions should preserve lender remedies available under the governing mortgage law, the UCC where applicable, and the loan agreement’s cross-default structure. ## 4. Analytical scaffolds - Start by identifying the controlling source documents and the single governing transaction structure; if multiple collateral regimes appear, map each document to the collateral category it governs. - Extract the operative business terms from the term sheet and compare them against any markup notes, title requirements, organizational approvals, environmental findings, and construction materials. - For each collateral class, confirm the draft includes the relevant grant language, perfection language, priority language, and enforcement language. - For each title exception or burden, determine whether it is (i) acceptable as a permitted exception, (ii) subject to endorsement or modification, or (iii) a blocker requiring lender decision. - For each organizational or authority issue, determine whether the borrower can validly execute, whether a consent or amendment is needed, and whether the mortgage should recite the authority facts. - For each environmental item, determine whether the mortgage should incorporate a specific covenant, notice, or cross-reference to the separate indemnity, and whether any condition needs special handling. - For renovation or draw items, align the covenant package with the funding conditions so the mortgage does not promise a mechanism unsupported by the loan documents. - For the issues memorandum, organize each entry by source-document conflict or gap, and state the proposed resolution path in transactional terms. ## 5. Vertical / structural / temporal relationships - Mortgage, note, and loan agreement must be internally consistent on indebtedness, default triggers, cure rights, and remedy sequencing. - Title exceptions, survey items, and recorded burdens should be reconciled against the mortgage’s permitted-exception structure before execution. - Organizational authority should be established before closing and then reflected in execution blocks, recitals, and any closing certificates. - Environmental diligence should inform continuing covenants and indemnity references, not merely a stand-alone disclosure. - Renovation budgets and draw schedules should drive covenants on completion, inspection, retainage, and disbursement timing. - Lease hierarchy should be clear: the mortgage should address priority, subordination, and enforcement rights in a manner consistent with the rent roll and any non-disturbance arrangement. - The issues memorandum should distinguish items that can be cured at drafting from items that require borrower, lender, or title-company action before closing. ## 6. Output structure conventions - Produce the mortgage and security agreement as the primary deliverable first, with all operative clauses and exhibits necessary for execution, recording, and collateral perfection; do not let the memorandum substitute for missing drafting. - Draft in conventional transaction-document form: parties, recitals, grant of lien, security interest grant, permitted exceptions, covenants, insurance, casualty/condemnation, condemnation, leases/rents, environmental covenants, renovation or construction provisions if applicable, events of default, remedies, miscellaneous provisions, and exhibit references. - Use explicit textual drafting conventions for any inserted or revised language so the final document remains intelligible in plain text and document export. - When the source set presents more than one title item, lease issue, environmental item, or authority question, address each one discretely rather than collapsing multiple issues into a single general statement. - In the issues memorandum, assign a clear severity level to each issue using a short ordinal scale defined at the top, and apply that scale consistently. - For each issue entry, include the governing source, the specific conflict or gap, the draft impact, the transaction consequence, and the recommended resolution path. - Every legal proposition in the memorandum or drafting notes should identify the governing authority or governing-document basis that supports the drafting choice, whether drawn from the source materials or from standard mortgage and UCC practice. - End the issues memorandum with a concise Recommended Actions section that assigns next steps to the relevant role and ties each step to the closing timetable or another transactional milestone. - Confirm in the final workflow that `mortgage-and-security-agreement.docx` contains operative drafting and that `drafting-issues-memorandum.docx` contains substantive issue analysis, not just placeholders or summaries.