Realization on Financed Vehicles Clause Samples
The 'Realization on Financed Vehicles' clause defines the process by which a lender may take possession of and sell vehicles that have been financed but are subject to default or non-payment by the borrower. Typically, this clause outlines the conditions under which the lender can repossess the vehicle, the procedures for notifying the borrower, and the methods for selling the vehicle to recover outstanding loan amounts. Its core practical function is to provide a clear legal mechanism for the lender to mitigate losses by reclaiming and liquidating collateral when a borrower fails to meet their financial obligations.
Realization on Financed Vehicles. The Servicer represents, warrants and covenants that in the event that the Servicer realizes upon any Financed Vehicle, the methods utilized by the Servicer to realize upon such Receivable or otherwise enforce any provisions of such Receivable, will be conducted in all material respects in accordance with the provisions of this Agreement, the Credit and Collection Policy, and Applicable Law.
Realization on Financed Vehicles. The Servicer warrants, represents and covenants that in the event that the Servicer or any Subservicer realizes upon any Financed Vehicle, the methods utilized to realize upon such Receivable or otherwise enforce any provisions of the related Contract, will not subject the Servicer, the Borrower, any Secured Party or the Collateral Custodian to liability under any federal, State or local law, and that such enforcement by the Servicer or a Subservicer will be conducted in accordance with the provisions of this Agreement, the Collection Policy and Applicable Law.
Realization on Financed Vehicles. The Servicer shall enforce the provisions of the Receivables in accordance with the applicable provisions of this Agreement, the Credit and Collection Policy and Applicable Law.
Realization on Financed Vehicles. (i) Unless otherwise contemplated by the Servicing Guidelines, in the event a Receivable becomes or is reasonably anticipated to become a Defaulted Receivable, the Servicer, itself or through the use of independent contractors or agents shall, consistent with the standard of care set forth in Section 7.3(a), repossess or otherwise convert the ownership of the Financed Vehicle securing such Receivable. In accordance with the priority of payment set forth in Section 2.7, all costs and expenses incurred by the Servicer in connection with the repossession of the Financed Vehicles securing such Receivables shall be reimbursed to the Servicer from the Collection Account on the Remittance Date relating to the Collection Period in which the Servicer delivered to the Administrative Agent an itemized statement of such costs and expenses. Notwithstanding the foregoing and consistent with the terms of this Agreement, the Servicer shall not be obligated to repossess or take any action with respect to a Defaulted Receivable if, in its reasonable judgment consistent with the servicing standards specified in Section 7.3(a), the Liquidation Proceeds are expected to be less than the costs and expenses of such repossession or action, or it determines either that it would be impracticable to do so or that the proceeds ultimately recoverable with respect to such Receivable would be increased by forbearance.
(ii) The Servicer, itself or through the use of independent contractors or agents to the extent allowed hereunder, shall follow practices consistent with the standard of care set forth in Section 7.3(a), including the Servicing Guidelines, in its servicing of automotive receivables, which may include selling the Financed Vehicle, or requesting a Subservicer to sell the Financed Vehicle, at public or private sale; provided, however, that the Servicer, itself or through the use of independent contractors or agents to the extent allowed hereunder, shall, in accordance with its Servicing Guidelines, maximize the sales proceeds for each repossessed Financed Vehicle. The foregoing shall be subject to the provision that, in any case in which the Financed Vehicle shall have suffered damage, the Servicer shall not expend funds for the repair or the repossession of such Financed Vehicle unless the Servicer shall determine in its discretion that such repair or repossession should increase the Liquidation Proceeds by an amount greater than the amount of such expenses.