HB182 Alabama 2019 Session

Updated Apr 26, 2021

House Bill

Expired

Current Status

Regular Session 2019

Session

1

Sponsor

Summary

Primary Sponsor: Chris Blackshear Representative
Republican
Session: Regular Session 2019
Title: Future Advance mortgages, provide that future indebtedness secures when mortgage created, Sec. 35-10-120 to 35-10-124, inclusive, added.
Description: Under current law, a future advance mortgage, which is created upon its execution, may secure funds advanced at the time the mortgage is executed as well as funds advanced in the future. A recent Alabama Supreme Court opinion held that a future advance mortgage, although recorded, is not created until the lender advances funds under the loan secured by the mortgage, thus potentially eliminating the priority a future advance mortgage has over subsequently recorded mortgages or liens.
This bill would create the Future Advance Mortgage Protection Act.
This bill would clarify that a mortgage may secure not only existing indebtedness but also future advances to the same extent as if the future advances were made at the same time the mortgage was created.
This bill would also provide that this bill would apply prospectively to mortgages created in the future, as well as retrospectively to existing mortgages.
Subjects: Mortgages

Pending third reading on day 7 Favorable from Financial Services with 1 substitute

Financial Services first Substitute Offered

Read for the second time and placed on the calendar with 1 substitute and

Read for the first time and referred to the House of Representatives committee on Financial Services