the goal of a bank taking collateral is to precisely define which borrower assets are subject and sale and to document for all other creditors to see that the bank has a legal claim to those assets in the event of nonperformance on a loan. when a bank holds a claim against a borrower's assets that stands superior to the claims of other lenders and to the borrower's own claim, we say the bank's claim to collateral has been perfected. bankers have learned that the property differ depending on the nature of the assets reside. for example , a different set of steps is necessary to perfect a claim if the bank has actual possession of the assets pledged as opposed to the case where the borrower retains possession of the pledged assets . yet another procedure must be followed if the property pledged is real estale land and buildings.